New research from ParcelHero has revealed at least 200 retail businesses don’t expect to survive the year because of the huge increase in returned items. Exacerbating the problem is the fact half of all shoppers believe retailers should foot the bill for all returns, even if they have simply changed their minds about the purchase.
Free returns mean businesses operating on tight margins lose all profit on a product – and may even be left out of pocket on the sale.
More than 80% of consumers say they consider the returns policy prior to making a purchase, with more than half of them stating “it will make or break the purchase”. Only 6.9% of consumers said they never checked return options before buying.
And the worst news for hard-pressed business is that 8% of shoppers admit to returning items several times a month.
UK consumer law has grown increasingly complex in recent years as it had adapted to incorporate European Union regulations as well as evolving UK legislation. What are the full rules surrounding returns and how they impact on businesses?
Everyone involved in commerce needs to know exactly what are the differences between the Consumer Contracts Regulation’s 14 day ‘cooling off period’ and the 30-day faulty goods Consumer Rights Act:
Consumer Contracts Regulations – 14 day ‘cooling off’ for online purchases
The Consumer Contracts Regulations replaced the Distance Selling regulations in 2014. These rights apply to online and mail order only. Key to these regulations is that people have a 14 day ‘cooling off period’ to think again about their purchase of goods or services. The cooling-off period starts the day after the purchaser receives their order, and there doesn’t need to be anything wrong with the item for them to get a refund.
Anyone with an unwanted gift must either return the item within 14 days or notify the seller in writing or email – in which case the customer has a further 14- day grace period to return it.
The buyer is responsible for returning the items within 14 days of cancelling and the seller’s refund must be paid within 14 calendar days after returning the goods, or receiving evidence that they were returned.
What retailers can refuse:
There are some notable exceptions to this rule, however. Businesses can refuse returns if the products are:
- something that deteriorates quickly – like flowers or food
- an item that was personalised or custom-made
- anything from a private individual rather than a business
- a CD, DVD or software, if the seal is broken
- Pierced earrings and other items that are unhygienic to resell
Delivery options
Perhaps the most fraught area is unwanted gifts. To return these items the customer will need proof of purchase and the date ordered.
Admittedly it can be uncomfortable for the receiver to confess to relatives and loved ones that they would like to return their gift, but in the long run it’s better than having to wear that novelty sweater every time the buyer visits!
What retailers can refuse:
If a customer paid for standard delivery when they bought an item, the seller must refund this if the item is returned. If the shopper chose a more expensive delivery option, the purchaser will have to swallow the difference.
High Street stores
What retailers can refuse:
High Street stores have no legal obligation to accept unwanted return goods that are undamaged – unless their terms and conditions say they will do so.
But it is important to note that any returns offer a store makes – such as free refunds on any December purchases until the end of January – becomes a legal requirement once it is made public.
Non-original packaging
What retailers can refuse:
Businesses can expect returns to be in a satisfactory condition and original packaging. A retailer can refuse a refund – or at least offer only a partial refund – if an item is so badly presented it is not salvageable. The Chartered Trading Standards Institute (CTSI) told ParcelHero retailers: ‘are allowed to refund less than the full amount – but only if the item has seen “unreasonable usage”. That means tags removed on clothes, or items returned without their original packaging, for example.’
