Creating a returns policy

While it can be a nice thing to do and good for recommendations et al, under UK law retailers are obligated to have a returns policy that notify the consumer of what their rights are and how they can return goods and under what circumstances.

So how do you create a returns policy? Here are some questions you need to ask yourself when creating such a policy that should make sure you have all the bases covered under the the Sale of Goods Act 1979.

Do I have to accept returns?


Under the Sale of Goods Act 1979, a consumer may be entitled to a refund, replacement, repair and/or compensation where goods are faulty or not as described. They are also entitled to a refund and/or compensation where the seller had no legal right to sell the goods.

But it isn’t always that straightforward. For example, where the consumer has bought clothes or shoes in the wrong size, or they have changed their mind or an item is an unwanted gift there is normally no automatic right to return goods (except where the goods were sold by mail order or over the internet and some goods sold to a consumer during a visit to their home).

In the case of consumer changing their mind or getting the wrong size it is often expedient to allow changes and refunds as this is often expected by the customer and is good for reputation. But you have to look at the costs and economics.

What should I put in my returns policy?


According to the Trading Standards Office “It can be difficult to draft a returns policy that provides the consumer with useful information, protects your interests and also meets the requirements of the law.

“For this reason, it is often said that ‘the best notice is no notice’, and you should not need to state a returns policy at all unless your policy is more than the law requires.”

Where you do offer the consumer more than the law requires, you can impose conditions, for example:

• a requirement to produce the original till receipt
• a requirement to return the goods unused and in unopened packaging
• a deadline for returns
• an offer to exchange or offer a credit note, but not to refund

You cannot impose these conditions where the customer has a legal right to return goods. So Trading Standards recommends the following would be an acceptable returns policy:

“Returns policy – If you change your mind about your purchase, please return the unused goods to us with the original till receipt within 14 days and we will offer you an exchange or a credit note.

“This does not affect your usual consumer rights, including your right to claim a refund, replacement, repair and/or compensation where the goods are faulty or misdescribed.”

Can I limit my liability to a customer?


Consumers’ legal rights cannot be taken away or restricted, and any attempt by a trader to do so by reference to an exclusion clause or similar notice will be void and therefore unenforceable.

Under the Consumer Protection from Unfair Trading Regulations 2008 it is also a criminal offence to mislead a consumer about his or her legal rights.

The following are examples of statements that are likely to mislead consumers about their rights:

• no refunds given
• goods can only be exchanged
• only credit notes will be given against faulty goods sold as seen

Even the statement ‘No refunds except where goods are faulty’ would be illegal, as there are a number of cases where a consumer can claim a refund on non-faulty goods (such as misdescribed goods), says Trading Standards

Can I disclaim the notice to make it correct?


It is a common misconception that statements such as those described above can be used if they are accompanied by a statement such as ‘Your statutory rights remain unaffected’.

However, where two contradictory statements are used together they are still likely to mislead consumers about their rights and the notice is likely to be illegal.

Consumer guarantees


The Sale and Supply of Goods to Consumers Regulations 2002 set out rules which apply when you give a guarantee on goods without extra charge. Any such guarantee must include the following particulars:

• the name and address of the person giving the guarantee
• the contents of the guarantee (that is, what it covers, which countries it applies in, and what you will do when a claim is made)
• the duration of the guarantee
• how to make a claim
• a statement that the consumer has statutory rights that are not affected by the guarantee

You cannot use the duration of a guarantee to limit consumers’ rights. Consumers are entitled to expect goods to remain of satisfactory quality throughout their reasonable life expectancy, so long as they are maintained correctly and not misused.

If you offer a guarantee, consumers can require you to provide a copy in writing.

Can I enhance customer rights?


Yes, you can give the consumer more rights than are required by law. You can do this on a notice, on business documents (for example, a till receipt) or on the goods themselves.

Where you state anything about your returns policy or guarantee, you must also state that the consumer has statutory rights that are not affected by the policy or guarantee.