The consumer’s right to a refund

Since the commencement of the Consumer Protection Act, there have been some businesses who have stubbornly resisted compliance with its provisions, for example declaring as a shop policy that no refunds or returns will be allowed under any circumstances. There have also been many consumers who have misconceived their rights under the Act, believing that they have an unfettered entitlement to return goods and insist upon a refund, for any reason or no reason at all.

There are a number of respected businesses who allow consumers to return goods purchased from them – for a full refund, with no questions asked – within a specific number of days. These businesses have such a policy because they realise that it is such an attitude to business which produces happy, loyal customers. They are under no legal obligation to accept returns and make refunds in all cases.

For example, you might buy a book from a local store but later change your mind and wish to return it the following week (undamaged) without having read it. The shop may agree to take it back from you and refund you. They do this to keep you as the customer happy, and not because they are under any legal duty to do so.

The Consumer Protection Act provides that, where goods are found to be defective in quality within six months of their purchase, the customer may insist upon a refund, or may allow the seller the chance to repair or replace the goods. Thus, if you buy a coffee machine which stops working, after three months’ normal use, you can return it to the seller with your proof of purchase and require a refund.

In cases where the goods are not defective, however, there are only limited instances in which the consumer is legally entitled to return the goods. Such instances include, amongst others, during the cooling-off period after a sale through direct marketing, and when a specific purpose for the goods was made clear to a specialist seller but the goods were found unsuitable for the purpose after delivery. In such cases, the refund payable might be less than the amount paid by the customer, if the goods were used or consumed before return (more than was necessary to determine a problem), or if the goods require unnecessary repackaging before they can be resold.

For example, I receive a telemarketing call offering me a bronze bird bath for my garden. I accept the offer and it is delivered to me the following day. I soon realise that it is an utter eyesore and I do not want it after all. I cancel the sale within the cooling-off period and am entitled to a full refund.

Or, I order petfood pellets from a specialist store. I explain to them that I need them for my many pet rabbits. When the goods arrive, I discover that they are for feeding sheep, not rabbits. I return the pellets for a full refund, as they are not suitable for the agreed purpose of my order.

Or, after discovering that the petfood pellets are not for rabbits but for sheep, I give a bagful to my friend who has a sheep on her property, and I return the rest. I receive a partial refund only, because I used more of the product than was necessary to discover the problem.

Or, after discovering that the pellets are not suitable for my pet rabbits, I wait for a few weeks and then contact the seller and demand a refund. I am not entitled to one because I waited too long to exercise my right. The Act requires me to act within ten business days.

Whilst there are only limited instances in which a consumer can insist upon a refund, when one such instance applies, the business may not insist on providing a credit note instead. The consumer is entitled to the return of his or her cash.

Where the return is not one provided for by law, but is merely the shop’s policy in a bid to provide better customer service than the legal minimum, then it is the business’s prerogative to provide a cash refund or a credit note.



Making sense of legalese: the “whole agreement” clause

Almost any agreement you sign will conclude with a number of paragraphs,¬†written in dense legalese, and¬†often printed in very small letters. These concluding paragraphs are not only scarcely legible – they are scarcely comprehensible to most laypeople. Lawyers refer to these clauses as the “boilerplate” clauses, as they tend to appear at the end of most contracts and to be fairly standardised.

One such paragraph which one finds in most agreements is the “whole agreement” clause. This clause specifies that “This agreement constitutes the whole agreement between you and us on the subject-matter thereof” – or something similar.

This clause may seem fairly innocuous – but it is extremely important.

In the course of reaching an agreement, many things may be said. One party may make claims about the performance or quality of its product or service. The other party may share information about its needs and requirements. Having seemingly reached agreement on what is needed and whether the product or service offered is suitable, the parties often then sign a standard agreement which records little or nothing that was discussed by them. Owing to the “whole agreement” clause, however, it is assumed that anything of importance to the parties has been recorded in the written agreement – and that anything not recorded is not material and should not be relied upon.

For example, I may visit a cell phone service provider, and explain that I need a mobile service with consistent, quality connectivity to Italy, as I have many clients there. The consultant who assists me assures me that I will never have any problems with my line to Italy with their service. I agree to sign up for a mobile contract, and am provided with a standard form agreement which mentions nothing about connectivity to Italy, and likely limits what the service provider is required to make available to me, and excuses it from liability for my losses due to any connectivity issues that might arise on their side. Should I later discover that I am receiving terrible call quality to Italy, I will be limited to enforcing what is recorded in the contract, owing to the “whole agreement” clause.

While the Consumer Protection Act prohibits the making of false or misleading claims to consumers, it places the onus on me to seek a court order addressing the consequences of any such claim should a dispute later arise. This involves a considerable expenditure of time and money which is best avoided.

It is therefore of the utmost importance that any matters which are important to you and which you wish to be able to rely upon, must be recorded in writing in your agreement.

Should you be provided with a standard form agreement, you have every right to cross out clauses which you do not agree with, or to add clauses which you wish to include. However, the other party must initial these changes to indicate acceptance of them. Merely crossing out or adding clauses alone does not mean that the other party is bound by these changes.

A service provider who makes promises or claims in good faith should have no difficulty in recording these promises or claims in your agreement. If they balk at doing so, then their words should be approached with a great deal of caution.