Managing Returned Goods

How Can Retailers Manage Returned Goods?

Whenever a consumer purchases goods from a retailer there is an automatic and implied set of requirements placed on the retailer. These are different to the requirements when selling business to business, primarily due to the fact that consumers are seen to have less bargaining power when it comes to negotiating the terms of the sale contract with the retailer and therefore there needs to be statutory protection afforded to these individuals.

Legal Right to Return Goods

Legal rights exist the moment a consumer enters into a purchasing contract with a retailer. These differ depending on where the purchase takes place, for example if goods are bought on the high street there is no legal right to return goods simply because the purchaser has changed their mind whereas a purchaser online can return goods even if they have merely changed their minds.

Most legal rights exist when the goods being sold are simply not meeting the required standard or are deemed as faulty; therefore the main focus on returning goods is on determining when goods are deemed to be faulty.

Dealing with Gifts and Changes of Mind

It’s not only faulty goods that have to be considered when it comes to returns. Sometimes goods are given as a gift and are simply unwanted or the person purchasing the goods no longer wants them and wishes to return them. This is clearly a different situation to where the goods are faulty. When looking to return goods in these circumstance the purchaser needs to a certain whether or not the store had a returns policy. It is not a legal requirement to have a returns policy but where one does exist it must be followed as it has, by its existence become part of the contractual relationship between purchaser and retailer.

Similarly with gifts it is common for retailers to allow a period for return provided the goods have not been tampered with at all and are in pristine condition. Typically retailers will offer options such as credit notes or exchanges rather than a full refund although again this is discretionary.

Faulty Goods an Overview

The main legislation relating to the return of goods is the Sales of Goods Act 1979 although the exact definition of faulty remains somewhat open to interpretation primarily due to the fact that different goods will naturally have different expectations attached to them. A plastic toy from a £1 is, for example not expected to show the same shelf life as an expensive laptop although it should be noted that price does not in itself indicate quality (or conversely lack of quality) from a legal point of view.

With this in mind a range of different criteria are laid out in terms of what is expected from certain goods and with reference to the selling process and prior communications between the parties.

The Sales of Goods Act 1979

Fit for Purpose

As stated previously the issue of determining when goods are deemed faulty in accordance with the statutory requirements and therefore when there is an ability to return the goods. The Sales of Goods Act 1979 puts in implied terms into the contract therefore where the goods do not meet with these terms the contract is breached and the purchaser can return the goods.

Fit for purpose will naturally mean different things depending on the nature of the goods. It covers not only the everyday use of these goods that the reasonable purchaser would expect the goods to be able to be used for but also any specific uses that the purchaser agrees with the customer at the time of purchase. This applies even if it is out of the normal expectations for the products. One of the difficulties here is proving that the discussion took place as it is often part of the sales process and not in writing.

Meets with Quality and Description

All goods sold are required to meet with the description given to them which may be a description stated by the seller or may be something printed in a brochure that is more widely produced. Any description could potentially be considered to be part of the contractual terms and therefore if the goods do not meet with the description this could give the customer an option to return the goods based on breach of contract.

In a similar way the goods are also expected to meet with the level of quality that would be reasonable given the context of the goods or services. All goods should be free form any material defects regardless of their price although there is clearly likely to be a shift of expectation depending on the price of the goods and whether or not they are brand new or second hand. Any failures to meet with these requirements would allow the consumer to return the goods.

Examples of issues when returning goods:

  • Goods that are less than 6 months old are presumed to not be fit for purpose if they have broken

  • The contract is between the consumer and the retailer although commonly the retailer will need to go back to the manufacturer

  • If the goods are faulty for any reason the customer is entitled to a monetary refund

  • It is not necessary to have a receipt but there must be a proof of purchase for example a bank statement

  • Any items bought in a sale are still covered by the Sales of Goods Act 1979

  • Defects in items that are specifically brought to the attention of the purchaser will not give grounds for a return

  • Defects that should have been obvious to the purchaser on reasonable inspection will not give grounds for a return

  • Services are broadly treated in the same way but it is expected that the services are undertaken with reasonable skill and diligence

  • Services must also be undertaken within a reasonable timeframe and for a reasonable charge