Introduction to Sales of Goods Act & Consumer Rights Act 2015
In United Kingdom, consumers are guarded by several rights ensuring the safe purchase and return of the products. The only thing to avail all those rights is just to be very conscious and aware about the policies framed in terms of exchange and refunds for the purchased item. It is too the core legal and ethical responsibility of the businesses. All the consumers have the right to return the product and ask for the refund if they do not find the product up to mark in features as mentioned.
Since, the British consumer law was a big misalliance in different parliamentary acts and European regulations that created a blurred image to the common people to understand it clearly. Even the experts were unable to understand and then to elaborate it correctly with its all sense.
To overcome this vagueness and also to bring the clear vision and frame of this law, a precise law and directives had been issued to protect the rights of consumers. Previously, Sales of Goods Act 1979 protected the rights of consumers for the return and refund of goods. Since the then law grip the retailer accountable for up to six years of the purchase of any item if it’s not settle the mentioned standards. This brought a messy situation in the business practices and the book keeping too. This misguiding and confusing policy was further rectified and then the two-year guarantee introduced in 1999 in European Directives and incorporated into UK law in 2002. The two year guarantee system was further proved a failure in the sustainability of the business scenario in the market. In the lieu of this, The Consumer Rights Act 2015 came into existence on October 1, 2015. This law further reframed with new and clear directives mentioning the rights of the consumers in the exchange and refund of the goods with all possible aspects and limitations too.
Return and Refund Laws in EU – A Review
The EU and its member states seriously work on the protection of consumer rights. Here the Return and Refund policy not only a legal submission but it used in practices thoroughly, informing and educating people about their rights about the exchange and refund practices. Hence, one need to go through and must aware about the policy guidelines and possible conditions. EU has thus ensured the protective approach to the consumers in terms of their purchase from the specified markets.
- If one sells in EU then the business will surely benefit by having the Refund and Exchange Policy, that will not only inform the customers but will mark the business as in agreement with the laws also. This will benefit the business to sustain its goodwill among the customers. Since the policy indicates the stress-free process of return or refund thus will also be advantageous for the shop if follows. The policy generally comprised of provisions regarding return time frame, steps for marking flaws in the product, order cancellation process and any other product exceptions or conditions. The process can be step up either online or offline as per the guidelines mentioned in Terms and Conditions Agreement.
- As per EU guidelines, the particular item should be included in the exchange and refund policy by the retailers to keep the consumers informed. For this another regulation has been proposed viz., The Consumer Rights Directives, ensuring the protection of consumers. This was passed on June 14, 2014, particularly applied to all cross border transactions in the member states of EU, focusing to create a complete transparency between the retailers and the consumers. The highlighted guidelines of this directive is;
- Elimination of the hidden cost which usually mark in promotion.
- Retailers are constrained to reveal the total cost of the product or service.
- Consumers must be pre-informed about the Right of Withdrawal, which allows consumer to return the product after 14 days of purchase. In case of non-informal, the period can extend to 1 year.
- Consumers have the right to get full refund on cancelling the purchase within 14 days.
- On such cancellation no extra charge can be forced on the costumer against the credit or online payments.
- The exchange and refund policy is an assurance of being candid towards the consumers regarding the products or services or practices. Many state and even international companies have transformed their Exchange and Refund policies being affected by the Consumer Rights Directive.
- EU rules also execute a two year guarantee for all goods purchased either by mails, online or in shops. If the product not works or appear as advertise then can be exchanged, repaired or refunded. However the refund option place as the last one when the product either cannot be repaired or exchanged.
- EU has set some provisions for the retailers as well where the consumers have to mark the compliant for flawed goods within the prescribed time depending upon the country. On receiving the complaint, retailer must provide an optimum solution if finds defect in the product. Generally, they have such included alterations in their Return and Refund Policies. Further, if the seller has no fault then the refund or exchange is not obligatory.
- Since incase of online purchase, the quality of the product cannot be judged, thus this aspect of purchase are kept in exceptions of this rule in most of the offered products.
- Overall, UK also set the Consumer Protection from Unfair Trading Regulations 2008, which fenced the retailers to misguide the consumers about the products, as it could be result in criminal penalties if detected. The retailers are also prohibited from twisting and self-amendments in the consumer’s rights.
Exchange and Refund Policies for Consumers – Know Your Rights
- The consumers are authorized to ask for a repair, exchange or refund if not satisfied by the features and quality of the product. The Law Commission has proposed a time period of 30 days to the consumer claiming for the refund. It is to be noted here that the one can only claim a refund after the first one or two weeks of the purchase, after which the user can accept the received product by one’s own choice.
- If the buyer is satisfied by the exchange of repair of the product in the first six months then if the retailer could also mark the product immaculate at the time of purchase, one has the time of six years (as prescribed) to revert with the relevant proofs. However, the time period of six years also diminished as per the durability of the product also depending upon the goods cost, its initial description and its usage tenure.
- Once if the retailer proves the inability to repair or replace the product then the user is entitled to receive compensation. This amount is the deducted value which would be calculated as the difference between the product’s purchase price and the consumed value of the goods. This amount of the product consumption is then giving the worth of the use.
- In case of online or mail purchases, the user may have a seven day conserving period within which refund can be demanded. Further, as per The European Rights Directives this time limit has been extended to 14 days.
- If the buyer has not kept the original packaging of the product or the invoice receipt then the bank statement will also be considered as the purchase proof in the refund claim.
- If the product was purchased with a credit card costing £100 or more then the refund claim could also be marked from the card issuer. On the other side, £100 or minimum costing goods can be claimed for Visa Debit card holders.
- Since the return and exchange policies are flexible in many aspects and the consumer has to accept and follow the terms and conditions set by the retailers on the specific product. In such cases one has to keep the original packaging of the item with its receipt. Sometimes a credit note or an exchange is also offered with the product, then that also has to be kept along with. Furthermore, the directives also facilitate the user with a time span of six years to complain for the exchange or refund if observes the product unfit or unsatisfactory quality after use.
- The Consumer Rights Act 2015 brought numbered modifications affecting sellers and buyers both. This act precisely focused on the commonly observed issues about the online or mail purchases:
- In-shop purchase– The product must be described with features. In case of any flaw an immediate refund could asked up to 30days; full refund is entitled up to 6 months if the goods cannot be repaired or exchanged; some amount can be refunded in the time span of 6 years if the product not lasts to the prescribed life limit.
- Goods ordered at home– As per The Consumer Rights Act 2015, if the goods are not find appropriate or match the assured quality then the refund can be claimed on that product too, segmented in the time duration of 30 days, 6 months and 6 years. However if the goods is ordered at home then after 14 days of receive a full refund can be sued.
- Services ordered at home -In such cases consumers can ask the servicer to replace or fix the service if dissatisfied; on finding a confront price the user may ask for the replacement; if the service time does not match with the offered time then the reasonable time can be asked by the customer or in can a full refund can also be demanded.
- Distance Selling- customers who purchase items through mails, telephone or online have the right to withdraw the order for a partial time for any reason. A full refund must be offered in the cancellation of the purchase within 14 days of product receiving; if the product is received even then the customer is entitled for a full refund; the customer must be informed after the order placement and prior the dispatch of the product so that the cancellation could be made accordingly if the customer don’t want to take the product for any reason.
Dos and Don’ts for the Businesses
- Sellers do not require to display their Exchange and Refund Policy, until they offers more than the prescribed law.
- In case if the seller is offering more than the legal privileges then he/she can also add some own conditions for refund or exchange in terms of – showing original till receipt; the return of fallow product; product with its original packaging; deadline for return and the seller can also offer to exchange or a credit note against the refund.
- The retailer must remember that such self-implied conditions must not affect the consumer’s legislative rights in the return and refund process.
- The seller should avoid any misleading and disguising statements, however it is good and an upfront attitude to mentioning the involvement of the offered policy along with the consumer’s legal rights with the products.
- The Sale of Goods Act 1979 is undoubtedly fenced the intractable retailers. Hence it is too kept in mind not to advertise the product above its features and sustainability. Exceedingly flowery words about the products may also cause to pay more than the earning. In doing so the retailer may also be penalized in misguiding the consumers and pilfering their rights.
Conclusion
EU laws make the Exchange and Refund Policy a core requirement. Since this policy is a supportive application making consumers aware about their rights in purchase, securing them from any forgery, thus there is no reason to avoid or not to consider this policy. The consumer protection regulation indeed increased the awareness of rights and so increased the people’s expectations in finding more suitable, sustainable and highly featured products and services. Which not only increase the level of choices but too promoted the competition in the market.
On the same side, retailers should also be aware about the regulations and directives to serve the customers with the great deeds. Besides this, the businesses also get to know clearly that how to resolve the customer’s complaint in the most suitable way.
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About the author
Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.