As we head into the silly season, this month’s consumer chat is aimed at Midlands Meander merchants. While no retailer is too small to be exempt from the Consumer Protection Act (CPA), if your turnover is less than R2-million a year, you qualify as a consumer in your dealings with your suppliers.
Here are some of the bits of the CPA that apply to your business…
Shopkeepers: When it come to returns, you are not legally obliged to take back any purchase unless it’s defective and returned within six months of purchase, with a receipt. That includes unwanted gifts.
Of course, it would a lovely customer service if you did accept such returns, provided the item is in a saleable condition. It’s considered extremely fair to offer an exchange or credit rather than a refund.
But if a customer comes back to you within six months with a product which is not fit for purpose or defective in any way, they have the legal right to choose the remedy – refund, replacement or refund. That’s provided they didn’t cause the problem themselves.
So if you put up a returns notice in your store, do differentiate between defective and non-defective (change-of-heart) returns. “No cash refunds” can only apply to non-defective returns. Gift vouchers must be valid for at least three years.
Accommodation venues: The CPA makes blanket “non-refundable deposit” policies illegal.
Consumers can cancel an advance booking of any kind and get a refund of what they’ve paid, minus a “reasonable” cancellation fee.
Given that “reasonable” is open to interpretation, you should spell out your cancellation policy in detail to your prospective customers – in writing, in the form of a sliding scale of refunds, from 100% if they cancel very soon after making the booking, to zero if they cancel at the “last minute”. And vendors such as wedding venues must prove monetary loss for missed opportunity, according to the Consumer Goods and Services Ombud (CGSO).
In other words, it can’t be a thumb-suck. You must show how you calculated what you are charging for your losses.
Essentially, the greater the likelihood of you being able to find a booking to replace the cancelled one, the bigger the refund should be.
To put it in legal-speak, there needs to be a fair balance between the competing interests of the venue and of the booking party.