It is important as a retailer to know your customers’ rights and your duties. Often customers make real claims (which you will need to honour) for the return of items they have purchased, but just as frequently, they may “try it on” and in those circumstances it is important that you and your staff know how to respond.

 

Case Study

Imagine you are a sports retailer of clothing and branded team jerseys. 

 

Just after the Semi-Finals of the FA Cup, a customer comes into your shop and angrily demands their rights to return a brand new football shirt (which as it happens is for the team that has just been knocked out of the Cup). They insist that they want their money back.

 

What are your duties as a retailer, what do you have to do next?

 

Response

Your duties in these circumstances depend on the terms on which you sold the customer the item and the reason for the customer wanting to return it. 

 

Your first step is to look to your store’s own returns policy – if you have one, it should be clearly displayed by the counter before payment is taken.  It should make clear whether the store elects to give refunds, credit notes, or it may simply state that all sales are final and no refunds are given unless the goods do not conform with the contract of sale.

 

You should then find out from the customer why they are returning the item.  To understand whether they are returning the item because they do they not like it, is it too big, it’s faulty or because their reason for buying it has changed.

 

The choice you make about what to do next depends on your establishing these points first and on whether the goods were sold over the counter or via the phone or internet.

 

Store sales

If goods are compliant with the contract of sale, a retailer has no obligation to accept the return of the goods and provide a remedy to the customer. This occasion may arise if the customer has simply changed their mind about the purchase.

 

If in the example above the customer attempts to return his Man United football shirt simply because Man United have been eliminated from the competition, there is no obligation on the retailer to accept the return of the goods and provide a refund to the customer.

 

In these circumstances the customer will only have the right to return the goods if the retailer has provided a returns policy or has agreed for example on the production of a receipt to give a credit note.

 

The customer may, however, have a statutory right to return the goods if the goods do not conform to the contract of sale. This means that if the goods were not as described or not of satisfactory quality, or not fit for a particular purpose made known to the seller, then the customer is fully within his rights to demand that you accept the return of the goods in question.

 

The most common remedy for non-compliant goods is for the consumer to reject them and ask for a refund. A customer can reject the goods within a reasonable time of the purchase. What amounts to a reasonable time period will depend on the nature of the goods sold, as clearly it would not be reasonable for a customer to wait 30 days to complain about a fault in a foodstuffs item that perishes a week after purchase. For example, in the football shirt scenario, if the customer has returned a football shirt with several holes in the fabric he could properly reject the goods and you, as the retailer, would be obliged to refund him the purchase price, unless you could prove that the holes were caused by the customer’s improper use.

 

Whether or not the customer has accepted the goods, he can ask for the goods to be repaired or replaced if they did not conform to the contract of sale at the time of delivery, and they are deemed not to have done so if the request is made up to six months from the date of sale, unless the retailer can show they were not faulty then.  After six months, the customer has to show the goods were faulty at the time of delivery.

 

A retailer can refuse to repair the goods if the cost would be disproportionately higher than the cost of replacing the goods. However, in this case consumers retain the right to reject the goods and require a refund. This continues to apply if the customer is not satisfied with a repair, but any reimbursement can take account of the customer’s use of the goods.

 

Guarantees

Many retailers have a returns policy or customer guarantee in place, not as a requirement by law, but as a gesture of goodwill to their customers. If you have a customer guarantee or returns policy in place it will be legally binding on you and must be accessible by the customer, written in clear and intelligible language and must state that the customer has statutory rights relating to the goods sold which remain unaffected.

 

A retailer cannot use a guarantee to limit liability arising from the sale of faulty goods. The retailer must also be careful with the wording of any guarantee given, as it is a criminal offence to exclude or restrict a consumer’s legal rights, or to mislead a consumer as to their legal rights.

 

You need to be aware that a guarantee or returns policy is additional to, and not a substitute for, the customer’s statutory right to a remedy if the goods do not conform with the sale contract.

 

Selling at a distance

If the goods to customers are sold to customers at a distance (by telephone, e-mail, website, fax, mobile phone or interactive television) then the rights of a consumer are different.  This is because these sales are covered by the Distance Selling Regulations and provide for example, a statutory cooling-off period of seven working days in which customers can return goods and receive a full refund from the seller, even if they are not faulty. This differs materially from the in store sales rights.

 

Retailers need to examine their on line and Distance Selling terms and conditions carefully in order to deal properly with customers and to understand their respective rights.

 

Retailers selling over the counter have no general obligation to return faulty-free goods and are free, subject to statute, to create their own customer guarantee or returns policy.

 

If products are sold at a distance, the customer has additional rights to return goods beyond those they would have over the counter.

 

In the busy Christmas period, retailers should carefully check their in-store and online polices and ensure that all staff fully understand them.

 

Written by Peter Weiss, Davenport Lyons