When are retailers legally obliged to process customer returns?

Following the Christmas period, many retailers encounter high volumes of returned goods. In this post I look at the Consumer Rights Act 2015 and the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 which oblige retailers to process customer returns in certain scenarios. Of course, many retailers accept returns in other scenarios too, even though they are not legally obliged to do so (although see here for the perils of doing so).

Returns under the Consumer Rights Act 2015
The Act requires goods which are sold to consumers to meet certain minimum requirements. These include that goods will be as described, be of satisfactory quality and match any sample or model provided. If goods fail to meet these standards, the Act gives the consumer various remedies, including the right to reject (i.e. return the goods and get a refund). This right to reject applies within the first 30 days, and also after 30 days in certain conditions (for example, where a repair or replacement is impossible). Retailers should bear in mind the following when dealing with refund claims under the Act:

Is there a breach?
Consider whether the standards set out in the Act have actually been breached. For example, where the customer claims that goods are is not of satisfactory quality, the customer may actually have unreasonable expectations or have damaged the goods after receipt. In the event of a dispute, retailers should consider getting an expert opinion to identify the nature of the defect – perhaps an internal expert (such as a fabric technician or product engineer) or an independent expert.

Can an alternative remedy be offered, instead of a refund?
Absolutely – for example retailers could offer a repair or replacement which a customer may be willing to accept. However, if the customer is insisting on a refund, retailers should allow the refund where required to do so by the Act.

Who is responsible for returning the goods?
The customer must either make the goods available for collection, or if agreed (such as in the T&Cs), return the goods to the retailer. In both cases the retailer must bear the reasonable costs of return.

Can any deductions be made from the refund?
The general rule is that all amounts paid by the customer for the goods must be refunded. Retailers cannot charge admin or restocking fees for processing the return. However, it is possible to make a deduction to reflect the customer’s use of the goods. Generally this can only be done if the customer has had the goods for 6 months. BIS has advised traders to consider all relevant information such as the type of goods, their intended use and expected lifespan when calculating the deduction, and also to have a policy or objective criteria in place so that the calculation can be justified. However, retailers should consider whether it’s appropriate to make deductions – a customer is likely to be annoyed if they have to go and buy a replacement item with less money due to no fault of their own.

Does the customer have a further claim?
Potentially. The consumer’s remedies under the Act are in addition to their rights at law. So for example, if a faulty washing machine damages clothes, the customer could get a refund for the washing machine under the Act and make a separate claim in respect of the damaged clothes.

Returns under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013
These Regulations give consumers a cancellation right in respect of goods which have been purchased off premises or at a distance (for example online or over the phone) for any reason. There are certain exceptions to this right (for example, clearly personalised goods). To cancel, customers must notify the retailer, and normally within 14 days of receiving the goods. Customers then have a further 14 days to actually return the goods.

Like the Act, all amounts paid by the customer for the cancelled goods needs to be refunded. This includes the outbound postage costs, up to the amount of the standard delivery option offered. However, the customer must pay the return postage costs, unless the retailer has agreed to do so (for example in the T&Cs).

Retailers can make a deduction from the refund if the value of goods is diminished as a result of handling goods beyond what is necessary to establish their nature, characteristics and functioning. To assess this, BIS guidance states that a retailer should consider whether handling has gone beyond what might be reasonably allowed in a shop. For example, removing manufacturers’ tags would not be allowed in a shop and therefore a deduction could be made in respect of such removal.

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