According to the Consumer Protection Act, all products sold are sold with an implied warranty. And if you’re a business owner, you’ll know that returns can be a nightmare! So to simplify all this, we’re covering:
- When the Consumer Protection Act applies;
- The four different scenarios where a consumer is entitled to a return;
- And what a refund should look like.
Need help drafting your Return Policy or general Terms and Conditions?
The Consumer Protection Act
The Consumer Protection Act, or “CPA”, does what it says; it protects the consumer when buying a product or paying for a service. Now, this might seem scary to the business owner supplying that product, but in fact, the CPA aims to promote fair and reasonable trade between these parties.
So even if you just have a basic understanding of your individual rights, the Consumer Protection Act can clear up many arguments. But before we delve into that, we need to understand that the CPA does not apply to every sale or supply of goods or services.
Transactions That Are Exempt From the Consumer Protection Act
Although the Consumer Protection Act applies to most transactions, there are some which are exempt:
- When the consumer is the state;
- When the agreement was entered into outside of South Africa;
- When the consumer is a larger business with an annual turnover of more than R2 million, or owns properties of more than R2 million;
- When the agreement relates to labour;
- When the agreement is in the form of a credit agreement, such as a loan;
- When the agreement deals with things that are not in the ordinary course of the supplier’s business.
As an example, IP Braai provides legal services. That’s our business. So if we were to sell a house or a car, that would not be our ordinary business. In that case, the CPA would not apply.
4 Scenarios Under the Consumer Protection Act Where Consumers are Entitled to Return Goods
So for the following scenarios, we’re assuming that the Consumer Protection Act does apply. We are talking about when a consumer, a natural person or a small business, buys a product from a supplier. Now in that picture, there is the common argument about the return of that product.
Firstly, according to the Consumer Protection Act, there is no general right of return. For example, a consumer does not have a legal right to return goods simply because the consumer changed their mind. However, there are four specific scenarios under the CPA where consumers are entitled to return goods.
1. Direct Marketing Cooling-off Period
This is a very common term. For example, you would come across it when buying property. When you buy a product due to direct marketing, then within five days, you may return the product. However, the consumer is responsible for the cost of that return.
2. When the Consumer Hasn’t Seen the Goods Before Making the Purchase
In this scenario, the consumer has a legal right to inspect the goods upon delivery. And if the goods do not meet the expected quality or type, the consumer can return the goods. Plus the supplier will have to pay for the return costs.
A classic example of this is when ordering something from Takealot. In our experience, Takealot really takes its return policy seriously!
3. If the Goods Do Not Meet a Particular Purpose
When a consumer has a particular need or a problem, and the supplier recommends something to solve this problem or meet this need, then the consumer can return the product if it does not fit that particular purpose. Although, this return will have to be done within 10 days. And the supplier will have to pay for the return costs.
4. Implied Warranty in the Consumer Protection Act
According to the Consumer Protection Act, all products sold are sold with an implied warranty:
- That the goods are fit for their intended use;
- That they are in good order and free of defects;
- And that they are durable and usable for a reasonable period of time.
If this is not the case, the consumer can return the goods for up to six months. And again, the supplier will have to pay for the return costs.
However, there’s a catch. The consumer cannot return the goods if he or she was made aware of the specific defects and if he or she agreed to accept the product in that condition.
This means a general voetstoots clause in your return policy would not get you out of this implied warranty. This is because a general clause would not mention the specific defects.
Can a Supplier Dictate the Type of Refund?
What happens in the case where a consumer is entitled to a return? Can the supplier decide what that refund looks like?
Not necessarily. According to the CPA, the consumer has the right to decide how they would like their refund. So refunds in the form of a voucher or in-store credit are not illegal per se. However, if the consumer would like that refund in cash, then the supplier has to give it to them.
When it comes down to how you, as a business owner, manage your return policy, it just needs to be fair and reasonable. And of course, that policy needs to be clearly written and available to your customers. In fact, certain online platforms do not allow you to set up your online shop without a return policy.
Remember, the Consumer Protection Act is aimed at promoting fair and reasonable trade between consumers and suppliers. Although, you need to ensure that you have a clear Return Policy and Terms and Conditions to protect your business.