New Business - Refunds for Sale of Goods

  ajm 09:19 02 Mar 2003

This is quite a long thread:
Soon I am hoping to open my own business in partnership with a friend. The business would be selling IT-related goods, like components, peripherals, etc.
In my current employment with a retailer I have come across many times that a customer has asked me if he is NOT HAPPY with the goods he is buying can they bring it back. My only answer to that was that the company policy is to give a refund/exchange only if the goods are faulty.
This usually helps them make up their mind

"Trading Standards assert that a consumer, who has received goods that are not of satisfactory quality, should be entitled to a refund of the purchase price without considering whether the consumer has accepted the goods or not."

As i am starting my new business and need to keep costs/refund as low as possible legally, where does the business stand where the customer purchases items, like a printer, and just because they did not like the quality offered by the printer and demand a refund, where do I stand. could i offer them a refund less a charge liek 20% as i may have to sell the printer for 20% less as it has been opened, or i can refuse them the refund, saying that the printer works fine. Also what is my position when gods bought do not work on the custiomer's PC but work fine at my place of business where we test the "faulty" goods.

  -pops- 10:19 02 Mar 2003

click here

You will have to be very au fait with all the legalities of operating a retail business BEFORE you open up. Consult your Trading Standards Department and remember they can be your friend as well as adversary.


  Forum Editor 11:50 02 Mar 2003

whether the business will be trading as a standard retail outlet from fixed shop premises, or will be an online/mail-order business, or a mixture of all three.

If you trade from shop premises - with no mail order or online aspects - you'll be like any other retail outlet, and subject to the same consumer legislation. If you sell via mail order or online you'll need to comply with the Distance Selling regulations as well.

-pops- advice is good - make sure you are well acquainted with the regulations before you sell a single item. There isn't space to explain things in full here in the forum, and to be frank I wouldn't want to think that anyone had launched a business based solely on our advice.

Try talking to The Trading Standards Office - they are there to assist retailers as well as consumers, and in my experience they can be extremely helpful. They are also very busy, so don't leave yourselves short of time - talk to them well in advance.

In answer to your question - if a customer buys a new item in a shop, and subseqently returns it because he/she doesn't like it the retailer is not obliged to make a refund, or an exchange UNLESS the customer is making the return on the basis that the goods are not as described, or are not fit for their purpose, or have a manufacturing fault. The "not as described" clause is very important, and you should be careful when talking to potential purchasers. Don't make claims for a product unless you are absolutely certain about them. If you say that a printer will produce "photo-quality" prints and it doesn't you have made a false claim in respect of it, and the customer can bring it back. It's best to point the customer to the manufacturers' descriptions and leave it at that - caveat emptor applies.

  ajm 11:57 02 Mar 2003

Many thanks for your replies

In reply to the Forum Editor's question, the business would be run from a premise, with the possibility of web-ordering in the future.

We are still in the process of researching all the legal aspects before making the jump.

  oresome 14:23 02 Mar 2003

Remember that many retailers go way beyond what is strictly necessary in law.

They don't do this because they're big hearted. It can make good business sense. Look how many retailers have copied M&S's returns policy.

You'll suffer some losses that will have to be built into the asking price, but retaining customers and gaining a reputation for very fair trading can be worth more.

  bfoc 14:43 02 Mar 2003

Good advice from all!

Just would add that going a bit further than bare legal minimum can also be worth it financially. Not just in 'keeping customers happy' but also in legal/admin fees. If you 'only' offer the minimum it is more possible to, inadvertantly, breach one aspect. If you do a little above base then you should never fall foul of the law with all the costs that involves.

Good luck!

  spuds 14:48 02 Mar 2003

Having owned two companies in the past, I can only suggest that you consult one of the many business advisory outlets. Many of these are sponsered by government funding, either local or national.Some of these outlets have weekly run new business training courses, dealing in most aspects of business, and they are usually free or heavily discounted.You should find the courses very worthwhile in a new business venture, which as a new venture can have many 'hidden' pitfalls.Libraries,Councils and the local Chamber of Commerce will have details of these courses.

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