Who pays for unwanted presents to be returned and what rights do consumers and traders have?

Unwanted Christmas gifts

The Royal Mail estimated that last year in the UK in the region of £150m worth of unwanted Christmas gifts were returned by over four million people. Who picks up the tab?

We look here at consumer cancellation rights for goods and the rules on who bears the cost of returns, as set out in the Consumer Contract Regulations 2013.

Statutory cancellation rights for consumers

Consumers have statutory rights to cancel certain ‘distance’ or ‘off-premises’ contracts within 14 days. This is commonly known as the ‘cooling-off period’. There are no specific cancellation rights for ‘on-premises’ contracts which can only be ended where both parties agree, the trader has a returns policy, or goods are provided in breach of contract.

Following cancellation, the trader must refund the price of the goods to the consumer plus any sums charged for delivery. Where a range of delivery methods is offered, this may be limited to the cost of the least expensive delivery option, provided it is a common and generally acceptable method of delivery.

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Costs of returning goods following cancellation

The Regulations set out limited circumstances where it is the trader’s responsibility to collect cancelled goods. This is essentially where the trader has offered to do so or the goods cannot, by their nature, normally be returned by post. The second of these points applies only where the contract is an ‘off-premises’ one and goods were delivered to the consumer’s home when the contract was entered into.

If the trader’s obligation to collect the cancelled goods does not apply, under the Regulations it will be the consumer’s responsibility to return them. The consumer may do this by sending the goods back to the trader or by handing them over to the trader (or any third party authorised by the trader to receive them, such as a courier or carrier).

The Regulations provide that the consumer must bear the direct costs of returning cancelled goods unless the trader has agreed to pay those costs, or has failed to provide the consumer with information about the consumer bearing those costs.

The second point is key for traders. As part of the ‘pre-contract information’ a trader must provide to a consumer, the trader must be clear if the consumer is to bear the costs of returning cancelled goods. Where the trader fails to do so, a term is implied in the contract requiring the trader to bear those costs.

The trader should also make clear where the goods are to be returned to. If it fails to do so, the consumer can return the goods to the trader’s contact address. If no return or contact address has been provided, the consumer can return the goods to any of the trader’s places of business. This has the potential to cause significant operational issues for traders who do not have processes and procedures in place to deal with returns at all of their places of business.

Summary

Regulations are a complex piece of legislation. There are many exemptions and exceptions to consumer cancellation rights and subtle differences depending on whether contracts are classified as ‘distance’ or ‘off-premises’.

We can help you understand consumer rights so that you can ensure your business is compliant and we can help you avoid enforcement action by making sure your consumer terms are fair.

If you have any questions relating to this article or any business-to-consumer contract issue please contact Kevin Mahoney at [email protected] or on 01242 246 426.