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Refunds and ReturnsYou have rights as a consumer. Understand them. Enforce them.

© Department of Trade and Industry, July 2010.Images are courtesy of Stock.xchng (www.sxc.hu).

Physical Addressthe dti Campus77 Meintjies StreetSunnysidePretoria0002

Postal Addressthe dti Private Bag X84Pretoria0001

the dti Customer Contact Centre: 0861 843 384the dti Website: www.thedti.gov.za

Disclaimer:

This information brochure is designed as a general reference tool on refunds and returns, as defined in the Consumer Protection Act, No. 68 of 2008 and may not be used as an exhaustive legal reference or substitute for the Act.

Contents

Purpose .................................................................. 4Refunds .................................................................. 4Warrantees ............................................................. 6What Consumers Should Know about Returning Goods ..................................................................... 6Strict Liability ....................................................... 10Common Excuses Told to Consumers ..................11Complaints Process...............................................11The Consumer Protection Act and National Consumer Oversight Bodies................................. 12Contact Information .............................................. 13Other Useful Contacts .......................................... 14

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Purpose

The purpose of this booklet is to educate consumers about their rights with regard to refunds and returns, as stipulated in the Consumer Protection Act, No. 68 of 2008. Issues concerning the return of goods, redress for unsatisfactory goods, as well as redress for unsatisfactory services and refunds, are detailed in the Consumer Protection Act and relate to the consumer’s right to choose, fair value, good quality and safety.

This means that consumers enjoy the following refunds and returns-related rights:

• The right to cancel or renew a fixed-term agreement;

• The right to request pre-authorisation for repairs or maintenance services;

• The right to cancel direct marketing contracts within the ‘cooling-off’ period (generally within five business days after concluding the agreement/delivery of the goods);

• The right to choose or examine goods, even after purchase and delivery;

• The right to return goods and seek redress for unsatisfactory services; and

• The right to retain and not pay for unsolicited goods or services.

Refunds

A refund entails a full or partial reimbursement, or the return of money, for goods or purchases that do not meet a consumer’s requirements. When making a purchase, consumers should be aware that they are entering into a contract with the seller.

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Consumers should ensure the following when buying goods for personal or household use:

• The goods should be fit for their intended purpose, which means that the goods should be able to function according to the customer’s expectation and as explained to the consumer by the salesperson, during the time of purchase.

Example: If the colour or size of an item is stipulated in the labelling of the product, and was explained as such by the salesperson, then the goods inside must be of that colour or size.

• If the goods were purchased for a specific purpose, the reason for which was made known to the salesperson or the seller during the purchase, then the goods must be suitable for that purpose.

Example: If a salesperson or seller says a particular paint is suitable for outdoor use, then it should be.

According to the Consumer Protection Act, con-sumers are entitled to refunds if:

• The goods do not perform according to the standards that the customers were made to believe they would;

• The goods are faulty and the customers were not aware or advised of the fault/s during the time of purchase;

• The goods are not the same as those shown to the customers prior to delivery of the goods; and

• If the goods are not as described.

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Warrantees

A warranty or guarantee is granted to the purchaser by a product manufacturer or provider of a service, with the understanding that the manufacturer or retailer shall replace or repair a defective product, or make good an ineffective service, within a predetermined time period, should goods become damaged within a certain period.

Suppliers also provide warranties and guarantees to fix or replace goods when faulty, however they often set conditions in terms of the duration of the warranties or guarantees and how consumers may redeem such.

NB: Statutory warranties take precedence over manufacturer/supplier warranties, unless the latter are more beneficial to the consumer.

What Consumers Should Know about Returning Goods

Different types of in-store purchases or repairs carry different conditions. There are two types of returns and refunds, viz. those imposed by statute and those known as ‘change of mind/goodwill’ refunds.

‘Change of Mind’ Returns and Refunds

In the event of consumers returning goods because they have changed their minds, suppliers are not obliged by law to accept returns and refund monies.

Suppliers can honour these returns and refunds out of goodwill/courtesy. It should be noted that the onus is placed on the consumer to understand the

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store’s policy about returns and refunds. However, the supplier must ensure that the store’s policy is clearly displayed and that the consumer is made aware of it.

Statutory Returns and Refunds

The Consumer Protection Act makes it compulsory for businesses to accept returned goods and refund consumers their monies, in specific circumstances;

◊ Direct Marketing

When goods and services are marketed, either in person or through the mail or electronic communication, and are not as described to the consumer, the goods may be returned at cost to the supplier. In the event of the goods being returned, such returns shall be done without penalty to the consumer, but at the risk of and cost to the supplier.

The conditions are as follows:

• The consumer has cancelled the agreement within the cooling-off period;

• The consumer has rejected goods because:

○ they were mixed with items that were not ordered;

○ they do not meet specifications in terms of quality;

○ they do not conform to material specifications, as per special order; or

○ they do not satisfy the purpose for which they were intended.

• The goods were unsolicited/not requested by the consumer.

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◊ In-Store Purchases

The implied warranty on goods supplied places an obligation on suppliers to accept returned goods within six months of delivery, in the event of the goods not complying with requirements and standards in terms of safety and quality. In such an event, the supplier must, at the discretion of the consumer, either refund all the monies paid, replace or repair the goods.

◊ Repaired Goods

There is an implied warranty on repaired goods, which places an obligation on suppliers to warrant all new and reconditioned parts installed, for three months, in all repair work undertaken after the date of installation or longer, as the supplier may specify.

If, within three months after goods have been repaired, the defect persists or the unsafe component has not been remedied, or a further failure or defect is discovered, then the supplier must either replace the goods or refund the consumer the full price of the item, for example a vehicle that keeps breaking down.

When are suppliers not entitled/forced to refund consumers?

A supplier is not obliged to accept returned goods and refund consumers their monies where:

• In respect of direct marketing:

○ the consumer cancels the agreement long after the cooling-off period has expired.

• In respect of retail stores:

○ the consumer was afforded an opportunity to inspect the goods prior to their purchase and subsequently changed his/her mind about the goods;

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○ the goods have been damaged, due to negligence;

○ the goods have been disassembled, physically altered, permanently installed or combined with other goods or property; or

○ a public regulation prohibits such returns for public health reasons, such as the return of under-garments and medicines.

• In respect of repairs:

○ the consumer did not adhere to the manufacturer instructions; or

○ did not keep proof of repair.

When may a supplier impose a penalty on refunds?

A supplier may impose a penalty if the goods are not returned in their original packaging and/or if they have been used while in the consumer’s possession. Such a penalty may not be imposed if the use was reasonable to determine whether the goods were acceptable to the consumer.

Can businesses display ‘No Returns and No Refunds’ signs?

Signs that simply state ‘NO RETURNS AND NO REFUNDS’ are misleading and could lead consumers to believe that this policy covers all product return situations. They are also against the spirit of the Consumer Protection Act. Consumers are therefore encouraged to know their rights and question such signs.

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Below is a recommended example of how a reasonable returns/refunds sign should be phrased:

Our Refund Policy

Please choose carefully. We do not normally give

refunds if you simply change your mind or make the

wrong decision.

You can choose between a refund, exchange or

your money back, where goods are faulty, wrongly

described, different from the sample shown to you or

do not perform as they are intended. Please retain your

receipt as proof of purchase.

Strict Liability

Strict liability is the legal responsibility for damages caused by goods, such as injuries caused by defective or dangerous products, or due to negligence by the seller.

According to the Act, the producer/importer/distributor/retailer of any goods is liable for any harm, caused wholly or partly, as a consequence of:

• supplying any unsafe goods;

• product failure, defects or hazards in any goods; or

• inadequate instructions or warnings given to the consumer, pertaining to any hazards arising from or associated with the use of any goods, irrespective of whether the harm resulted from any negligence on the part of the producer, importer, distributor, or retailer, as the case may be.

NB: Consumers should ensure that they purchase high-quality products, from credible retailers.

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Common Excuses Told to Consumers

It is the manufacturer’s fault.

You may seek redress against the manufacturer under a guarantee but this does not remove the obligation on the seller to deal with your complaint. It may be reasonable to allow the seller to seek an opinion from the manufacturer.

The goods were reduced.

This means that some of the items contained in the original packaging are missing or you no longer have the original packaging.

You do not have a receipt.

You have the same rights against the supplier, even if you lose your receipt, although you will still have to provide some proof of purchase. However, even without a receipt or proof of purchase, you may still be able to make a claim under a guarantee.

Complaints Process

Complaints can be lodged in person, by telephone or in writing. Remember the following tips before lodg-ing a complaint:

• Be clear about the fault/s in the goods you have bought.

• It is important to contact the seller as soon as possible with some form of proof of purchase, explaining the problem and telling the seller what should be done about it and by when (set a fixed deadline).

• Complaining in person can be more effective.

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Ask to speak to the person in charge to discuss any concerns. Always keep in mind that there is no point in losing your temper or getting angry, especially if the person is not in a position to authorise a refund. Rather be assertive, without being aggressive and be clear about what is wanted, while remaining polite.

• When complaining telephonically, create a complaint diary and use it to list what happened, when it happened and with whom you spoke, as this will help as a reminder when discussing the complaint. Always follow up your call with a letter.

• Written complaints should be directed to the manager or customer services, confirming your visit and any promise or response made.

• Keep records of communication with the seller, including copies of all receipts, letters, e-mails and notes from telephone conversations (including the dates, times and what was discussed).Never send original documents – send photocopies.

• If you are unsure about where you stand, enquire about your legal rights before confronting the seller/business.

The Consumer Protection Act and National Consumer Oversight Bodies

The Consumer Protection Act makes provision for the establishment of the National Consumer Commission (NCC), as well as the National Consumer Tribunal (NCT). The NCC is a body assigned to investigate consumer complaints. The NCT was created by the National Credit Act, in September 2006, and is responsible for the adjudication of violations and transgressions of the National Credit and Consumer Protection Acts.

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If a desirable response is not forthcoming from a seller/business when complaining about goods purchased from, or services rendered by the seller/business, such complaints can be escalated to the National Consumer Commission (NCC), via the dti Consumer Help Line. Consumers should contact the NCC with proof of all correspondence with the seller, during which attempts were made to resolve the complaint. This proof should include copies of all receipts, letters, e-mails and telephone conversation notes.

Contact Information

the dti Consumer Help Line

the dti Customer Contact Centre:0861 843 384

the dti Postal Address:Education and Compliance DivisionPrivate Bag X84Pretoria, 0001

the dti E-mail Address: Contactus@thedti.gov.za

Other services available include workshops, presen-tations, sessions or meetings, written clarifications and non-binding advisory opinions.

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the dti Provincial Offices

Gauteng Tel.: 011 355 8648Fax: 011 355 8019

MpumalangaTel.: 013 752 3761Fax: 013 752 3729

Northern CapeTel.: 053 830 4835/00Fax: 053 831 3668

North WestTel.: 018 387 7700/7866Fax: 018 392 5660

Western CapeTel.: 021 483 5133Fax: 021 483 5872

LimpopoTel.: 015 293 8559/8300Fax: 015 295 3426

Eastern CapeTel.: 040 609 3050Fax: 040 609 3201

KwaZulu-NatalTel.: 031 310 5315Fax: 031 310 5416

Free StateTel.: 051 403 3575Fax: 051 403 3237

Other Useful Contacts

National Credit Regulator (NCR)Tel.: 0860 627 627

Debt Collectors CouncilTel.: 012 804 9808Fax: 012 841 6238

Financial Services Board (FSB)Tel.: 0800 110 443Fax: 0800 202 087

Credit Information OmbudsmanShared tel.: 0861 662 837

South African Fraud Prevention Services (SAFPS)Tel.: 0860 101 248 Fax form (on demand): 011 869 6466

National Consumer Tribunal (NCT)Tel.: 012 663 5615Fax: 012 663 5693E-mail: Registry@thenct.org.za

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the dti Customer Contact Centre0861 843 384

the dti Postal AddressEducation and Compliance DivisionPrivate Bag X84Pretoria0001

the dti E-mail AddressContactus@thedti.gov.za