Consumer Protection 4/4

The consumer’s right to return products is probably the portion of the Consumer Protection Act (CPA) that caught most people’s attention. For consumers it was a celebration and for suppliers something of great concern.

Upon closer inspection, as with most of the CPA, it is all about being “reasonable” and perhaps there is not as much for business owners to fear as initially expected.

The fear experienced by business owners (and elation by consumers) was that for up to a period of six months a consumer will be able to return any product for any whimsical reason without any questions being asked and get a full cash refund in return.

The CPA, however, lays out more clearly the grounds upon which a consumer may return a product and these reasons fall generally with in the following categories:

Goods bought through direct marketing

Direct Marketing is defined by the CPA as approaching a consumer, either in person or by mail or electronic communication, for the direct or indirect purpose of promoting or offering to supply any goods or services or requesting them to make donations. This will most likely take the form of Email and SMS communications.

Under the conditions of purchasing in response to direct marketing the consumer has the right to return goods within five days of either the transaction taking place or the goods in question being delivered to the consumer (whichever happens later). The consumer does not have to give a reason for the return as it is within the “cooling off period”.

Therefore if a client responds to your direct marketing and you conclude a transaction but have to wait for their order to arrive from your own supplier then client has up until five days after you eventually supply them with the goods in which they can cancel and request a refund.

The refund to the client will need to be made within fifteen business days of receiving notice of cancellation (if the goods have not been supplied to them yet) or fifteen business days after receiving the goods back from the client (if they have been supplied to the client already).

Note that if you sell products online the Electronic Communications and Transactions Act overrules the CPA as it has its own legislation that will apply.

Goods not previously examined

If a consumer has not had a chance to examine goods upon making a purchase and receive the goods later they are entitled to return the goods upon examination if the goods are not the type or quality as expected or agreed at the time of their purchase. The expectation created at the time of purchase can either be from a sample provided or from a description provided. Both the expectation from the sample and the description must be satisfied when the actual goods are supplied. It is not good enough, for example, for the sample criteria to be met but not the description criteria.

Goods that do not meet the intended purpose

If goods are intended to satisfy a specific purpose as expressed by the consumer to the supplier and do not do so then the consumer can return the goods within ten business days after delivery.

Note that if a particular purpose has been communicated by the consumer to the supplier, even it is not the originally intended purpose for the product then the consumers rights still stand. For example, if a client says to you that they wish to use a particular shampoo to wash their dishes with and you agree that the shampoo you supply them with will work for this purpose and does not then they can still return the product, even though it may say differently in the instructions that accompany the shampoo.

Goods under the implied warranty of quality

This section is perhaps the most daunting section of the entire refunding section of the CPA as it has the dreaded six month refund period linked to it.

Under this section a consumer has the right to safe, good quality products which meet the purposes for which they were intended.

If a product does not meet the intended purpose or is faulty it can be returned up to six months after being purchased.

This does not give the consumer the freedom to simply return it because a better product is available on the market that does a better job or because they don’t want the product anymore. There has to be something specifically wrong with the product that limits it from doing what it is advertised and intended to do.

Note that this implied warrantee cannot be overruled by another agreement in place with the consumer.

If a product is supplied to a consumer with a known limitation or reduction in quality then it must be expressly stated to the consumer and they must accept the goods on these terms. This does away with the old “voetstoets” clause as it is not specific on what the limitation or condition of the product is.

Note that other warrantees or undertakings by the supplier in terms of goods supplied are not voided by the CPA rather the CPA provides the minimum requirements. Therefore if a warrantee of 12 months is offered then this does not fall away because of the CPA.

Note on Services

Services definitely make things a little trickier as they are entirely different to goods in many ways. For example, if a client comes in to the salon and asks for their hair to be cut short and in six months they return to say that their hair is long again it would seem just a little unreasonable to ask for their money back.

Section 56 of the CPA, which deals with the implied warrantee of quality refers to goods and not services so it appears to apply to tangible products that are taken home with the purpose of being put use with a particular intention in mind.

What section 54 of the CPA says is that the consumer has the right to a good quality service according to what they are generally “entitled to expect”. They also have the right to the use of good quality products that are free of defect if these products are used in performing a service for them.

If quality of the serviced provided or the products used to perform the service are not of reasonably acceptable quality then they consumer has the right to request a remedy or a refund.

In my experience most salons are very accommodating if their clients are not happy with their service. It does get a little hazy, however, when it comes to things like extensions or how long the client now has in order to complain and request a refund. It appears that the word “reasonable” comes into play again as it would not be reasonable to expect a refund for a haircut after six months.

The refund process

If a client returns the product within six months of purchasing it you can repair it, replace it or refund them the money. Note that it is not your choice but the client’s choice.

If you repair or replace the product the clients warrantee extends for a further three months from the date of receiving the repaired or replaced product. If they still experience problems and return the product again the product must either be replaced (warrantee extends again) or the client refunded.

For a refund you may offer clients a gift voucher or some other form of credit note for your store in the case that they return products to you. However, the client has the right to demand a cash refund. Therefore as a standard practise it won’t hurt to first offer the clients a voucher for your store BUT make sure that they are aware that they are entitled to a full refund so that you do not disgruntle them further.

Charging clients in the case of refunds

If the goods are returned in their original and unopened packaging you cannot charge the client any fees. However, if the goods are repackaged in their original packaging then you can charge a reasonable fee for the use of the goods while in their possession, unless they are goods that are ordinarily depleted by normal use and no depletion took place (i.e. they didn’t actually use the product). But, you can’t charge for depletion of the product if the quantity of depletion is what is required to determine whether the goods were acceptable or not (i.e. they opened the product, tried it and found it did not work as was intended).