Right to a refund under threat

6 November 2009

Our right to receive a refund for faulty goods is under threat from a European directive, the Law Commission has warned.

Currently, shoppers are entitled to reject faulty goods and obtain a refund if they act “within reasonable time”. This is usually considered to be one month, although some cases have seen refunds after seven months. Shoppers can also return faulty items to be replaced or repaired within six years of purchase.

However, European rules put these rights at risk, because they state that shops should offer to repair or replace faulty items, rather than hand over refunds. The directive also excludes minor defects, meaning consumers aren't entitled to rescind a contract for minor defects, such as a scratched iPod screen.

Although this directive has not yet been adopted in the UK, if it is then our rights as shoppers would be severely diminished.

The Law Commission says the ‘right to reject’ should be retained in the UK: “Consumers know that they can get their money back if the product is not as promised, provided they act quickly. This makes them more prepared to try unknown brands and new retailers.”

It also warns that allowing the exclusion of minor defects could lead to retailers arguing that many faults are minor.

Research by the Law Commission found “strong support” for keeping the right to reject among both consumers and businesses; 94% of people asked said they valued the right to reject faulty goods very highly.

However, the Commission believes there needs to be more clarity over how long shoppers have to return an item and receive a refund. 

“We recommend that in normal circumstances, a consumer should have 30 days to return faulty goods and receive a refund, with flexibility built in for special circumstances such as perishable goods, or goods which both parties know will not be used for some time,” says David Hertzell, the commissioner leading the project for the Law Commission in England and Wales.  

The research also found that consumers believe they should have a month to reject a faulty item and receive a refund.

Joanna Lezemore, a senior solicitor at Which? legal services, is concerned about the impact the European directive might have if adopted. “Imagine you’ve just spent thousands of pounds on a new car, only for the engine to blow within a week. You might have lost faith in the model, but under these new rules you wouldn’t have the right for a refund. Worse, the retailer might repair the car, which could have repercussions on its re-sale value.”

Your rights under the Sale of Goods Act 1979

•    Items for sale in shops or online must be "as described" and "of satisfactory quality"

•    If an item is faulty, or wrongly described, you have the right to a refund, replacement or repair

•    To receive a refund, you should reject an item "within a reasonable time"

•    For the first six months after you buy an item, the ‘burden of truth’ is on the retailer – this means it must prove the fault it down to you if you want a replacement or repair

•    After that time the ‘burden of truth’ falls on the consumer

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