Both consumers and retailers can use sales to their advantage, so it can be useful to review the law around sales, returns and refunds.
Boxing Day bargain-hunting followed by a month of markdowns in January is a long-standing tradition, but it’s far from the only time of year that shoppers will find items reduced. Those looking for school equipment are more likely to find a deal in the summer holidays, for example, while outdoor furniture might be marked down once summer has come to an end. As the growth of e-commerce continues, faster product cycles and mobile-driven flash sales as short as an hour or two are growing in popularity. In this fast-changing climate, it’s as important as ever for both retailers and consumers to know their rights.
There are various laws governing this area, the most important of which is the Consumer Protection from Unfair Trading Regulations 2008, which introduced a general duty on traders not to trade unfairly. The Price Marking Order 2004 is also important, along with guidance issued by the Chartered Trading Standards Institute and the Advertising Standards Authority.
The crucial thing for traders to remember is that “all sales must be genuine”, says Adam Grimwood, a solicitor at Markel Law specialising in business and commercial advice for small and medium-sized businesses. “If an item is marked as ‘in the sale’, it must genuinely be so, and it is unlawful to suggest otherwise.”
If referring to an earlier price as well as the new, reduced one, the item must have been on sale for the previous price for a significant period. Notably, the law no longer specifically defines how long this period must be. However, “to suggest that, for example, an item is now in the sale when in fact it had only ever been on sale at the higher price for 24 hours would ultimately be unfair and misleading to the customer”, Grimwood says.
If a retailer advertises a one-day ‘flash sale’, for example, holding the sale for longer than a day would put undue pressure on the customer to buy on that day. On a similar note, an item should not be on sale for materially longer than it was offered at its original price. “At that point, the sale price becomes as much the ‘usual’ price’ as the original one,” says Grimwood.
Use of the phrase ‘up to…’ – popular when advertising sale events – must also be genuine: in an ‘up to 80% off’ sale, a significant proportion of the items for sale must actually be reduced by 80%. “Clearly it wouldn’t be right to have hundreds of items in an up to ‘80% off’ sale only reduced by 10%,” adds Grimwood.
Because contravening these rules is a criminal offence, retailers should ensure they can always produce evidence of their compliance.
When it comes to returns, different rules apply depending on whether a purchase was made online or in person. In person, customers are automatically entitled to return only items which are faulty – that is, not of satisfactory quality, fit for purpose, or as described. When it comes to ‘non-faulty’ items, retailers can impose their own policies relating to refunds or exchanges. However, they must clearly articulate these to the customer at or before the point of sale and cannot change them afterwards. These rules also apply to items that have been reduced.
Distance selling – when an item is purchased online, over the phone or by mail order – is governed by the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations, which came into force in 2014. Under this set of rules, the customer is entitled to a ‘cooling-off period’ (starting from moment the order is placed, and ending 14 days after the goods are received) in which they can cancel their order without providing a reason. The customer then has another 14 days from that point to return the goods. The retailer can require the customer to bear the cost of return postage, but must stipulate this in their terms and conditions or bear the cost itself.
If an item is faulty, customers can claim a full refund for up to 30 days after purchasing, whether the purchase was made online or in person. In this initial period, it is technically for the customer to prove, on the balance of probabilities, that the item is defective. If more than 30 days have passed, the retailer is allowed one opportunity to repair the item or offer a replacement, but can be required to offer a refund if they are unsuccessful. In the initial six months after purchase there should not be any deduction from the refund, unless the item is a motor vehicle.
After six months, the customer must prove that the item was faulty at the time they took ownership of it to be entitled to a repair, replacement, and again, if unsuccessful, at refund. However, when the item is rejected in these circumstances, because of the amount of time that has passed, the retailer is entitled to make a reasonable deduction from the amount to be returned, to take into account the customer’s usage.
Ultimately, says Grimwood, honesty and transparency are key. “If as a retailer you’re always putting yourselves in the shoes of the customer and thinking ‘is this genuine? Is this clear? Does this seem fair?’ then you can’t go far wrong.”