Returns and refunds, warranties and complaints
Customers' legal rights to return goods, receive refunds for goods, complain about unsatisfactory goods and make claims under guarantees and warranties.
Even the best businesses are sometimes faced with a customer who isn't satisfied with the goods they've bought or who simply want their money back.
Alongside improved consumer-protection legislation, awareness of consumer rights has increased dramatically over the last 30 years. This has led to an increase in people's expectations of the sort of redress they can expect when goods aren't up to scratch. It's therefore essential to know what you're required to do when a customer complains.
But it's not only retailers that should be aware of the legislation that protects dissatisfied consumers. Anyone in business who provides goods should be aware of their obligations to customers.
This guide explains a customer's rights to return goods and the differences between warranties and guarantees.
Customers' rights to return goods
What you must do when selling to customers and their rights to redress for goods that aren鈥檛 as described, are unfit for purpose or are unsatisfactory.
When customers purchase goods from you they're legally entitled to expect certain things. Under the Consumer Rights Act goods must:
- Match the description you give of them - in writing, as an illustration or in speech.
- Be 'fit for their purpose'. If people buy a pen, for instance, it must be capable of writing. But this requirement also means that if a customer tells you they want an item for a particular purpose, you should tell them if you have doubts about its suitability.
- Be of 'satisfactory quality' - they must be durable, safe and free from minor, as well as major defects.
If, when they are supplied, they do not meet the requirements above, there is a short period during which the consumer is entitled to reject them.
This short-term right to reject goods lasts for 30 days unless the expected life of the goods is shorter, eg highly perishable goods.
If the consumer asks for repair or replacement during this initial 30-day period, the period is paused during the time it takes for this to happen. This means the consumer will have the remainder of the 30-day period, or seven days (whichever is longer) to check whether the repair or replacement has been successful and to decide whether to reject the goods.
All customers have up to six years to claim compensation. The exact amount of time depends on the product, though it's for your customer to prove it was faulty when sold. But if your customer is a consumer and asks for a repair or replacement during the first six months after the sale, it's up to you to prove the goods weren't faulty.
What is a warranty?
How warranties work and what you must do if you offer one.
A warranty is a legal contract promising that faulty goods will be rectified by the seller or manufacturer beyond what is required by consumer protection laws. You are not obliged to offer warranties with products you sell. However, offering them can add value for the consumer.
Warranties - also known as 'extended warranties' - have a similar effect to insurance policies. Some are issued and underwritten by insurance companies. They are sold on the basis that they will provide the customer with 'peace of mind' over the first few years of ownership.
Remember that as a supplier, any warranty you offer is in addition to your statutory responsibilities under the Consumer Rights Act. A supplier cannot, for instance, refuse to deal with a customer's complaint about a faulty product simply on the grounds that the warranty on the product has expired. In law, a supplier is still liable for any breach of contract - for example, if the goods are not fit for their purpose, or of satisfactory quality - for a period of up to six years.
Warranty or guarantee?
Warranties are similar to guarantees, in that they provide a legally-binding assurance that any problems caused by manufacturing defects during a set period will be remedied.
However, unlike guarantees, the customer normally pays for this extra protection. For example, electrical retailers often offer to sell a warranty on their products which covers accidental damage, the cost of repairs and replacement parts.
Extended warranties for domestic electrical goods
Your responsibilities if you provide extended warranties on domestic electrical goods, including the information you must supply to customers on price and statutory rights.
Retailers who supply extended warranties on domestic electrical goods must comply with specific requirements.
You must display the price of the extended warranty next to the price of the goods. You must also make it clear that the purchase of the warranty is optional.
Other information you must provide includes:
- explaining consumers' statutory rights
- that warranties can be obtained elsewhere and that customers' household insurance may be relevant
- that the warranty does not have to be bought at the same time as the goods
- details of any cancellation rights
- what protection the consumer will have if the warranty provider goes out of business
- whether the warranty will come to an end if a claim is made
If you offer a warranty costing more than 拢20 to an in-store customer, you must provide a written price quote including similar details.
For warranties lasting over a year, consumers have the right to cancel within 45 days. Consumers who cancel after more than 45 days are entitled to a pro rata refund.
What is a guarantee?
How guarantees work and what you must do to honour them to your customers, including how the Consumer Rights Act applies in relation to guarantees.
Generally speaking, guarantees are offered by manufacturers of products. They are free of charge but legally binding under the Consumer Rights Act 2015.
In law, a guarantee is considered to be "an agreement to provide some benefit for a set period of time in the event of the goods or services being defective". For example, a vacuum-cleaner manufacturer will usually offer a guarantee with their products that, for a year or more, they will carry out free repairs for problems caused by a manufacturing defect.
It's important to remember that manufacturers' guarantees are in addition to your statutory responsibilities as a supplier under the Consumer Rights Act. A supplier cannot, for instance, refuse to deal with a customer's complaint about a faulty product simply on the grounds that the product is outside its guarantee period.
In law, a supplier is still liable for any breach of contract - for example, if the goods are not fit for their purpose, or of satisfactory quality - for a period of up to six years.
Returns and the law
How to deal with requests for refunds and returns, what your legal obligations are to offer or refuse a return and consumer鈥檚 rights when goods are faulty.
When a customer approaches you as a supplier and asks for either a refund or some other solution to their concerns, it is important to know where you stand as far as the law is concerned. However, it's also worth considering how you should respond with a view to retaining their custom.
Legal obligations for returns
If you sell goods or services online, by telephone, by mail order or away from your normal trading premises, consumers may have a right to cancel a contract within a 14 day cooling off period and make a return.
Legislation - in the form of the Consumer Rights Act - gives all consumers (but not other businesses) a right to a repair or replacement where goods turn out to be faulty.
First, you should establish your position and your customer's rights.
If the goods are faulty, the customer is a consumer (rather than another trader) and has complained within six months of purchase, it's up to you to prove there was no fault at the time of sale. If you can't do that, you'll have to offer a refund or replacement. Even after six months, the consumer may still be entitled to ask for a repair or replacement.
If your customer is another business, you may still want to offer a refund, repair or replacement. Otherwise you may face a claim for compensation.
Check if the goods come with a guarantee or are covered by a warranty meaning that a repair can be carried out free of charge.
Goodwill gestures
You may consider offering returns even when you do not legally have to, eg when a customer changes their mind. You can create a returns policy that outlines your business' rules for this type of return.
Remember that if you respond helpfully and professionally to a customer's complaint they'll be far more likely to deal with you in the future.