Can a company charge a restocking fee on returned merchandise?

December 16, 2015 18:09 by Consumer Ed

Dear Consumer Ed: 

I bought a smartphone online.  It didn’t have the functionality I wanted, so I returned it the following week.  The company issued me a refund less a $25 restocking fee.  Can they do that?

Consumer Ed says:  

Short answer:  yes, usually.  In Georgia, retailers may set their own policies regarding refunds and exchanges, including those related to “restocking fees”.  Restocking fees have become increasingly common in today’s market, particularly when a return involves an electronics purchase because the item, once opened, can no longer be sold as new.  However, while the collection of these fees is permissible, there may be circumstances where a retailer should not enforce such a fee, or circumstances where charging it would be unfair or even deceptive.   The fees can only be charged as a cost of business, and to help offset the cost of restocking a returned item.

Generally, the customer must be notified of the store's return policies, and any restocking fees must be disclosed before the purchase is made.  In states that have laws addressing restocking fees, it’s illegal to charge them in the following situations:  in connection with the return of defective merchandise; the retailer delivered the wrong merchandise; the retailer failed to deliver the merchandise within the promised time period; the fees exceed 50% of the purchase price of the merchandise; or, the fees aren’t sufficiently disclosed prior to the customer’s purchase of the merchandise.  Some online merchants charge a percentage of the purchase price to accept a return. Certain electronics retailers charge a 15% restocking fee on items such as opened notebook computers, projectors, camcorders, digital cameras, radar detectors, GPS/navigation and in-car video systems, and a 25% restocking fee on special order products, including appliances, unless the item is defective.

The best way to protect yourself in the future is to ensure you understand the store’s policies prior to purchasing a product.  Make sure to ask questions related to the store’s refund and exchange policy.  Always thoroughly read any posted policies prior to purchasing an item and review the receipt as soon as you complete your purchase.  

If you believe the store failed to adequately disclose restocking fees, you can contest the charge by negotiating with the business. If that does not resolve things to your satisfaction, you can always consult with an attorney.  Additionally, you may submit a complaint to the Federal Trade Commission (www.ftc.gov) and to the Georgia Department of Law’s Consumer Protection Unit by visiting www.consumer.ga.gov or calling 404-651-8600.


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Do stores have to offer a rain check if an advertised item is not available?

September 8, 2015 15:42 by Consumer Ed

Dear Consumer Ed: 

Are businesses required to offer a “rain check” for items advertised but not available within the time frame of the deal?  I understand when they say “while supplies last,” but one store in particular either conveniently runs out of a product early (sometimes the first day) or it tries to switch to either a higher-priced product or a lower-quality product. 

Consumer Ed says:  

It depends on what kind of business it is.  The Federal Trade Commission (“FTC”) requires grocery stores and retailers that sell food products to have the advertised product in stock and available for you to buy during the entire time period of the deal unless the advertisement clearly states that supplies of the product are limited.  If the grocery store doesn’t have a phrase on the ad to the effect of “while supplies last”, but runs out of the advertised product, the store must either be able to prove that it originally ordered enough of the advertised item to meet the anticipated demand, or:

  • Offer you a rain check;
  • Offer you a similar product to the one that was advertised that is either comparable in value or has had its price reduced in a similar way; or
  • Offer you some other form of compensation that is equal to the value of the advertised product that is no longer stock.


If you do receive a rain check from your grocery store, make sure that it includes the following:

  •  Store’s name and address
  • Your name, address, and phone number
  • Date the rain check was issued to you
  • Description of the item you wanted to purchase
  • Quantity you are entitled to purchase
  • Advertised price

 

Once you have the rain check, the store has to provide you with the product within 60 days.  Otherwise, it must allow you to purchase another comparable in-stock item, or work with you to establish when it will have the advertised product ready for you to buy.  If the grocery store’s ad didn’t state that quantities of the advertised item were limited, and you’ve asked them to provide you with a rain check or a comparable product but they refused, the store has engaged in a deceptive or unfair practice, and has violated the Federal Trade Commission Act.  

If the business you are concerned about is not a grocery store or another kind of retailer that sells food products, the business is only required to clearly state in its advertisement that the quantities of the product are limited.  The business has no obligation to provide you with a rain check or with a comparable product, even if the advertisement does not state that supplies are limited.  However, the lack of availability of the advertised product without a disclaimer could be violation of Georgia’s Fair Business Practices Act (“FBPA”), especially if the business tries to pressure you to buy a more expensive product (or if it purposely stocked only two or three units of the merchandise advertised simply to get customers into the store to sell them something else).  According to the FBPA, it is unfair or deceptive if a store advertises goods without intending to sell them or to provide reasonable amounts of the advertised products without providing notice that supplies are limited.  The FTC also prohibits businesses from advertising items solely for the purpose of convincing you to buy more expensive ones.  

You can report any of the violations described above to the FTC at www.ftc.gov and to the Georgia Department of Law’s Consumer Protection Unit at consumer.ga.gov or 404-651-8600.

 

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Pet store sold me a sick puppy

August 20, 2015 20:02 by Consumer Ed

Dear Consumer Ed:  

My mother purchased a puppy from a pet store for $2000.  She signed the store's "no refund" policy during the check-out process without reading the paperwork.  But, during the sale of the dog, the sales clerk referenced several times the store’s 48-hour return policy, which says that they will offer an exchange within 48 hours.  However, it was not at all clear to my mom that they did not offer refunds during this time period.  My mom went back to the store within the 48-hour time period because the puppy was showing signs of illness.  The store personnel directed her to speak to a third party over the phone about what steps to take next, and only after getting home did my mother learn about the store’s no refund policy.  Is there any protection for consumers in this case?  We have since learned that the pet store in question has a very bad reputation for selling sick animals, so offering an exchange is not a great option.  

Consumer Ed says:  

Your mother is in a difficult situation. While the store is certainly obligated to provide consumers with the terms of its return/exchange policies before the consumer completes the purchase, your mother was given those policies and has acknowledged receiving them. 

There is no universal right to cancel purchases. A three-day right to cancel exists for only a limited number of consumer transactions. These transactions are limited to credit or cash transactions of $25 or more that were initiated through face-to face contact, e.g. door-to-door sales, away from the seller’s regular place of business that results in a written agreement.  Georgia does not have any law that requires a business to provide a refund or accept returns; this means that a business may set its own return policy (including setting time limits on accepting returns), and may offer consumers cash, in-store credit, exchanges, or no adjustment at all.  While a retailer isn’t generally required to post its policies, it must honor any refund or return policies it does have.  From what you’ve said about your mother’s case, the store in question actually provided her with a written return/exchange policy, which she then signed (but didn’t read).  Under these circumstances, it’s unlikely the store would be required to do more with regard to giving the appropriate advance notice of its return/exchange policies.

Nevertheless, your mother may still have some recourse.  The papers she signed may have contained written warranties about the condition of the dog, and she should review them carefully to see what they say. However, even if there were no written warranties, there may be warranties that the law will imply in the context of a sale of goods (these warranties do apply to pets). Basically, the law implies that goods must:  (i) pass without objection in the trade; and (ii) be fit for the normal and ordinary purpose for which such goods are used.  It follows that a sickly dog would generally not pass “without objection”, and by selling an animal that is unhealthy, the pet store could be said to have violated this implied warranty.  

To find out if your mother may have some recourse, you should consult an attorney who specializes in these matters.  You can also learn more about consumers’ rights in purchasing pets by visiting the Federal Trade Commission’s website at www.consumer.ftc.gov/blog/and-they-called-it-puppy-love.


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