Distance Selling: Refunds |
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| Introduction |
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| The Consumer Protection (Distance Selling) Regulations 2000 (the "Regulations") came into force in the UK on 31st October 2000. This article explains the refunds procedure and provides guidance on how best to comply. |
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| Note: we provide four articles on distance selling. |
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| The others are linked on the right: |
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- The Distance Selling Regulations;
- Distance Selling: an overview;
- Distance selling: financial services;
- Distance selling: refunds.
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| When do I have to refund a consumer’s money if they cancel an order? |
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| Regulation 14 requires that you make the refund as soon as possible after the consumer cancels, and at most within 30 days. You must refund the consumer’s money even if you have not yet collected the goods or had they returned to you by the consumer. You cannot insist on the goods being received by you before you make the refund. |
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| Can I withhold a refund if a consumer fails to take reasonable care of the goods? |
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| No. The Regulations give consumers an unconditional right to cancel a contract and oblige you to refund all monies. However, you may have a right of action against the consumer for breach of the statutory duty to take reasonable care. |
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| What specifically do I have to refund to the consumer if they cancel? |
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| You must refund any money paid by or on behalf of the consumer in relation to the contract to the person who made the payment. This means the full price of the goods, or deposit or prepayment made, including the cost of delivery. This is because when a consumer buys from home, delivery of the goods is an essential part of the contract. |
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| If you provided additional services such as gift wrapping or express delivery that a consumer specifically requested, then you may withhold the additional charges incurred by the consumer for these services only if: |
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- The additional services were provided under a separate contract;
- You had the consumer’s agreement to start the additional services before the end of the cancellation period; and
You provided the consumer with the required written information before you started the additional services, including information that the cancellation rights
- would end as soon as you started to carry out the additional services.
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| I sometimes provide gifts with the goods or services I sell. If a consumer cancels the contract where I have provided such gifts. |
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| Am I entitled to recover them? |
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| This depends on the terms of the contract. If the gift was supplied with goods the consumer purchased and they expected to receive the gift when they placed an order, they may be under a contractual duty to return that gift on cancellation. |
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| However, if the gift is not a condition of the contract, consumers can treat the gift as unsolicited and can keep it as though it were an unconditional gift. |
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| I sell goods by accepting goods from the consumer in part exchange. |
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| In the event of a cancellation what happens to the part exchanged goods I have accepted as part of the contract? |
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| You must return the part exchanged goods within ten days of the consumer cancelling. The part exchanged goods must be returned in as good a condition as when you received them. If you cannot do this, you must pay to the consumer a sum equal to the value you allowed for the goods. |
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| What happens on cancellation to related credit agreements that a consumer has used to finance a purchase? |
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| If the loan is from you or from a lender associated with you, that loan agreement is automatically cancelled when the consumer cancels the order. Any money paid to you by the consumer or by the lender on the consumer’s behalf in relation to the agreement with you will need to be refunded to the person who made the payment. |
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| Where a consumer uses a credit, debit or store card to buy the goods or service, the consumer’s agreement with the card issuer is not cancelled. |
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