Top 3 Refund Policy Mistakes

Guess who is back on her Consumer Contracts Regulations fun!

Me, it’s me…with common mistakes business make with the Consumer Contracts Regulations

Consumer Contracts Regulations cover UK businesses selling goods online. I know not many business owners find CCRs that fun but they are one of my favourite topics (along with the properties of silk and erm, crocodiles?) As a disclaimer, I am not legally trained; I just have a strong interest in consumer laws!

Summer is a good time to review your return policies ready for the festive selling period and it’s always useful to know your rights when you are shopping online too so here are 3 of the top mistakes I commonly see.

Not refunding the original outgoing postage for returns

Yep, businesses need to refund the original postage costs even for change of mind returns and even though that is a sunk cost that the business will not see back. For change of mind returns, you can ask the customer to cover the return postage but only if this is made clear in your policies.

For example, if I sell an item for £10 with £1.75 postage and the customer wants to return it as the colour doesn’t suit them. They spend £1 on the return postage and I refund them £11.75

You don’t need to refund the difference for shipping upgrades though.

For example, if I sell an item for £10 with £6.50 a next day delivery postage upgrade and the customer wants to return it as the colour doesn’t suit them. They spend £1 on the return postage and I refund them £11.75 which includes the cost of what standard, not upgraded postage would have been to them.

Charging a restocking fee

Sorry but this is not allowed. The only fee you can charge for returns is the return postage cost if you offer return postage labels or pick ups for your customers. Again, this is only if you make it clear to your customers that this will incur a cost and will be deducted from their refund amount.

For example, you allow customers to enter their return details into a return portal which generates a Royal Mail return label which your customer can use to drop their return to the post office. The customer paid £40 plus £4 postage for their order and you have let them know that the return portal postage fee is £4. You would refund them £40 in this instance as the return postage fee has been deducted from the original order cost of £44.

Not accepting returns on reduced or sale items

It can be frustrating to have stock returned after your sale period, but consumers have the right to change their mind so long as they inform you within 14 days of their order and arriving and then return their order within another 14 days.

You know I love talking about consumer rights and return policies so if you want me to cover any specific part, just let me know :)