Return and Refund policy

RETURNS POLICY AND THE CONSUMER PROTECTION ACT Introduction A supplier of goods usually dictates the terms and conditions of sale and includes the returns policy applicable. When constructing these terms and conditions, it is important to keep the provisions of the Consumer Protection Act1 (the CPA) in mind, as they apply irrespective of the store refund policy. There are a number of sections in the CPA that allow goods to be returned by a customer, but it is important to note that there is no general right of return. Implied Warranty of Quality Section 56 of the CPA imposes a built-in or automatic warranty that all goods sold should comply with the requirements listed in Section 55, namely: • that they are reasonably suitable for the purposes for which they are generally intended; • that they are of good quality, in good working order and free of any defects; • that they will be useable and durable (i.e. will last) for a reasonable period of time; • that they comply with the Standards Act No. 24 of 1945 or other applicable public regulations; and • that they are reasonably suitable for the specific purpose that the consumer wants to use them for. If the goods do not meet the requirements set out in Section 55, the customer can return them at the supplier’s risk and expense and without penalty. Further, the customer can elect to have the goods repaired, replaced or get a full refund of the original price paid. The consumer must return the goods within 6 months of being delivered. Where the goods were not reasonably suitable for the specific purpose intended, or are not what the consumer ordered, then they have 10 days to return the goods2 . These rules do not apply if the consumer was specifically 1 Act 68 of 2008 2 Section 20(2)(b) and (d) t +27 (0) 21 425 5604 f +27 (0) 21 421 8913 e enquiries@schoemanlaw.co.za w www.schoemanlaw.co.za © Sixolile Timothy | SchoemanLaw Inc 2017 told that the particular goods were offered in a specific condition or if they have been altered contrary to instruction or after leaving the control of the supplier3 . However, a consumer will not be able to return the goods because they were defective or not suitable for the purpose if the consumer was made aware of the specific defects, and the consumer agreed to receive the goods in that condition. A general ‘voetstoots’ clause will be insufficient to get out of the Section 56 warranty, because the supplier has to mention the specific defects. The direct marketing “cooling-off” period If a consumer has bought goods as a result of direct marketing, in terms of Section 16, they may cancel the transaction without reason or penalty if they give written notice to the supplier within 5 days of delivery of the goods. The supplier then has to give a consumer a full refund within 20 days of receiving the notice. The consumer will have to pay the costs to return the goods. Goods are returned at the risk and expense of the consumer. Goods which have not been seen before purchase In terms of Section 20 (read with section 19) of the CPA, if a consumer has not had the opportunity to examine or inspect the actual goods received before purchase, they are entitled to inspect the goods on delivery. If, on initial inspection, they find that the goods do not meet the ‘type’ or ‘quality’ they could reasonably expect from the agreement; or if the goods were made in terms of a special or ‘custom’ order, and the goods do not reasonably conform to the specifications of the order, then the consumer can refuse delivery, receive a full refund, and the consumer can cancel without penalty. In this case, the supplier will have to pay the costs to return the goods. Goods do not meet a particular purpose In terms of Section 55(3) (read with section 20) of the CPA, if a consumer informs a supplier that the goods are being bought to fulfil a particular purpose, and the supplier advises that the goods will meet this particular purpose, if they do not, the consumer can return the goods and cancel without penalty within 10 days after receiving the goods. The supplier will have to pay the costs to return the goods. 3 Section 55(1) and (6) t +27 (0) 21 425 5604 f +27 (0) 21 421 8913 e enquiries@schoemanlaw.co.za w www.schoemanlaw.co.za © Sixolile Timothy | SchoemanLaw Inc 2017 It is important to note that, despite the above, the consumer is not entitled to return goods for any of the above reasons if regulation prohibits the return of those goods to a supplier once they have been supplied to a consumer (for reasons of public health), or after having been supplied to a consumer, the goods have been partially or entirely disassembled, altered, added or combined with other goods or property. A consumer cannot return a product for just any defect. The defect must be a material imperfection in the manufacture of the product which makes it less acceptable than a person would reasonably be entitled to expect. A defect can also be any characteristic of the product which renders it less useful, practicable or safe than a person would reasonably be entitled to expect. The Electronic Communications and Transactions Act4 (ECT Act) and returns The ECT Act has its own consumer protection provisions, some of which will trump the regulations of the CPA. If you sell or buy goods online, there are some extra considerations. Specifically, the reasons for returns listed above do not apply if the ECT Act’s provisions apply to the transaction. Instead of these rights of return, consumers have a general right to return (a “cooling off period”), for 7 days after delivery, for any reason, without penalty, but the consumer must pay the costs to return the goods. If you have an online store, your returns policies should already be in line with these provisions. Conclusion If you are a supplier of goods, one of the most important things you can do is to ensure that your returns or refund policy is in line with the CPA (and ECTA where applicable). A good returns policy coupled with excellent customer services will be essential to avoid complaints to the National Consumer Commissioner. Suppliers may not exclude the warranties mentioned above. As such, a supplier’s returns policy may not limit the right that consumers have under the CPA. Contact an expert at SchoemanLaw for assistance on drafting your business’s returns policy.