0370 270 6000

No refunds policy - whats new

27 June 2008

Readers may recall from our bulletin on 15 May 2008, "New Laws to Regulate Sharp Trading Practices - the Consumer Protection from Unfair Trading Regulations 2008" that new consumer protection legislation came into force on 26 May 2008.

The broad principle of this legislation is that retailers and manufacturers should deal with consumers fairly. The Regulations protect consumers by outlawing a host of deceptive and intimidating sales practices which are unfair but had not all been deemed illegal until now.

Under the Regulations, companies are prohibited from misleading consumers about their legal rights. This throws up some interesting examples. Thus, the well known use of a notice or receipt stating "No refunds" is now likely to be deemed in breach of the Regulations.

Although there is no requirement for you to display a returns policy, if you do not have one, if you do offer consumers more than their legal rights (for example, you accept returns where the consumer simply changes their mind about their purchase), then you must display a policy clearly on a notice. However, you must ensure that this notice does not cause any confusion about the consumers legal rights.

We all know that should goods fall short of certain standards in any way, then under the Sale of Goods Act, consumers may be entitled to do one or more of the following:

  • Reject the goods
  • Claim a refund and /or compensation
  • Claim a repair / replacement

If instead of leaving customers to rely on their statutory rights you also decide to display a notice setting out your individual returns policy, the way to do this is to explain what you will do, in addition to the consumers rights, rather than what you will not do. This way, there is much less chance of inadvertently misleading your customers as to their rights. Such a notice will also have a positive message about the added value offered by your business, which must be good for customer relations and the brand.

In addition, you may decide to set out, in broader terms, what the consumers main legal rights are when buying from any retailer.

Businesses should be aware that a notice that is illegal cannot be made compliant simply by stating that "your statutory rights are not affected". This phrase is considered not to be well understood by consumers and as a result could potentially mislead.

The maximum penalty for a misleading statement about consumers rights is an unlimited fine and/or two years imprisonment. This is a strong imperative to get it right! An enforcement authority can also apply for a court order preventing further breaches.

Focus on...

Blogs

Cameras in convenience stores: a potential hornet’s nest..?

A convenience retailer has opted to install cameras (the “Facewatch” system) at a limited number of its English stores to reduce crime and protect its staff.

View

Blogs

Covid-19 rent arrears – the questions that remain

The Government appears set to announce plans on ‘living with Covid to restore freedom’. With the success of the retail and hospitality sector key to recovery, what protections will be on offer to tenants to deal with Covid-19 rent arrears?

View

Press releases

Browne Jacobson advise Sephora on its acquisition of Feelunique

Browne Jacobson’s corporate finance lawyers have advised omnichannel prestige beauty retailer Sephora on its acquisition of Feelunique.

View

Published articles

What are the implications of the recent Tesco equal pay ruling?

All of the ‘big four’ supermarkets have seen equal pay claims submitted. The majority of these cases involve workers arguing that they have not been paid equally compared to distribution centres of the business.

View

The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

Mailing list sign up

Select which mailings you would like to receive from us.

Sign up