{"id":4892,"date":"2016-01-28T16:15:01","date_gmt":"2016-01-28T16:15:01","guid":{"rendered":"https:\/\/www.qualityformations.co.uk\/blog\/?p=4892"},"modified":"2022-03-07T12:50:21","modified_gmt":"2022-03-07T12:50:21","slug":"guidance-on-customer-returns-and-refunds-for-small-business","status":"publish","type":"post","link":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/guidance-on-customer-returns-and-refunds-for-small-business\/","title":{"rendered":"Guidance on customer returns and refunds for small business"},"content":{"rendered":"
UK consumers have significant rights when it comes to product returns, so you need to be aware of your legal duties and responsibilities as a small business. Consumers have rights when the goods they purchase are faulty or not as described by the seller. As a retailer, your customer returns and refunds policy can add to these statutory rights, but it may not take away from them.<\/p>\n
The Consumer Rights Act 2015 came into force on 1st October 2015. Prior to this date, consumers were protected under the Sale of Goods Act 1979. The legal rights of consumers who purchased goods before the new Act came into effect are protected under provisions in the old Act.<\/p>\n
Under the Consumer Rights Act 2015, your consumers may be entitled to a refund, replacement, repair, and\/or compensation if the goods they purchase from you are faulty, not as described, or don’t do what they are supposed to do. The same rules apply, whether the goods are purchased at full price, in a sale, or with a discount voucher.<\/p>\n
Furthermore, your customers are entitled to a full refund and\/or compensation if you had no legal right to sell the goods. Therefore, if you sell or supply any goods, you must understand your obligations under the Consumer Rights Act 2015<\/a>.<\/p>\n There are different rules for other situations. For goods bought in-store, there is usually no automatic right to return goods if the consumer purchased the wrong size of garment, or they simply changed their mind. However, there are exceptions for distance selling<\/a> and off-premises sales, i.e., goods that are bought by mail order or online, and certain goods sold to a consumer whilst visiting them at their private residence.<\/p>\n Customers who buy goods online, by mail order or telephone, by text or fax, or through digital TV, have the right to cancel their order for a limited time for any reason, even if the item is not faulty. These types of sales categorised as \u2018distance selling\u2019 and the seller must adhere to the following rules:<\/p>\n The introduction of the Consumer Rights Act 2015<\/a> brought about a number of changes that affect both businesses and consumers.<\/p>\n A consumer rights summary has been produced to give a general overview of the key consumer rights. It focuses on the most common issues for goods bought in-store or at home (i.e., online, by phone, off-premises sales).<\/p>\n Goods must be as described, fit for purpose, and of satisfactory quality. During the expected lifespan of the item, the consumer is entitled to the following:<\/p>\n Customers who purchase goods in-store do not have a legal right to a refund or replacement just because they change their mind, but most businesses offer refunds in such circumstances.<\/p>\n The Consumer Rights Act 2015 says goods must be as described, fit for purpose, and of satisfactory quality. During the expected lifespan of the product, the customer is entitled to the following:<\/p>\n As per the Consumer Contracts Regulations 2013, a consumer who purchases goods online has up to 14 days after receiving their goods (in most cases) to change their mind and be offered a full refund.<\/p>\n As per the Consumer Contracts Regulations 2013, the customer can cancel a service within 14 days. If they have agreed that the service will start within this timeframe, the customer can be charged for what they have used during that period.<\/p>\n Digital content must be as described, fit for purpose and of satisfactory quality.<\/p>\n As per the Consumer Contracts Regulations 2013, the customer has 14 days to change their mind and get a full refund on digital content. They do not have this right to cancel after a download has started if they have been told this and the have acknowledged it.<\/p>\n You do not have to offer refunds to customers in the following circumstances:<\/p>\n You have to offer a refund for certain items only if they are faulty, such as:<\/p>\n If a customer discovers a fault with an item after they have \u2018accepted\u2019 it, the seller may still have to repair or replace the item. Goods are \u2018accepted\u2019 if the customer tells you they have accepted or altered the item. The customer is under no obligation to accept the goods after replacement or repair – they can still reject the item.<\/p>\n Sellers are legally required to repair or replace a product if the customer returns it within 6 months of purchase unless the seller can prove that the item was not faulty when it was purchased. A seller has the right to ask the customer to prove that the goods were faulty at the time of purchase if a repair or replacement is requested after 6 months.<\/p>\n You cannot remove or restrict consumers’ legal rights to return goods or services or refuse to provide a refund, replacement or repair that contravenes their statutory rights. It is also a criminal offence under the Consumer Protection from Unfair Trading Regulations 2008 to mislead consumers about their statutory rights. For example, you cannot state the following:<\/p>\n The above types of statements are prohibited, even if you included a disclaimer such as ‘Your statutory rights remain unaffected’. This would be misleading so just don\u2019t do it!<\/p>\n Sellers have no legal requirement to state or display information about their customer returns and refunds policy unless they provide the consumer with more than the law requires. If you do offer more than the legal entitlement, you can add your own conditions, such as:<\/p>\n Do remember that these conditions must not affect the consumer\u2019s statutory rights to return goods. It is a good idea to add a statement like ‘This policy is offered in addition to your legal rights\u2019 to avoid misleading the consumer.<\/p>\n Distance selling<\/h3>\n
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Summary of Consumer Rights<\/h3>\n
Goods bought in a shop:<\/h4>\n
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Services paid for in a shop<\/h4>\n
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Goods ordered at home<\/h3>\n
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Services ordered at home<\/h4>\n
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Digital content ordered at home<\/h4>\n
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When you do not have to offer a refund<\/h3>\n
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Repairing and replacing goods or services<\/h3>\n
Customer returns and refunds statements you cannot make<\/h3>\n
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Creating a returns policy for your business<\/h3>\n
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