A returns policy (or refund policy) is the easiest way of dealing with your customer’s complaints before they arise. Many businesses have asked us what their rights and duties are under the law when it comes to customers returning goods or asking for refunds for services. Customers often believe that the law allows them to return goods for any reason, but this isn’t always true. For many businesses, this becomes a difficult balancing act between the law, your reputation, and your cash flow.

What is the problem?

The law says that there are certain circumstances in which you have to accept a consumer’s returns, like returning goods under the Consumer Protection Act (CPA) or the Electronic Communications and Transactions Act (ECT Act). Some businesses go over and above this, allowing consumers many more rights than the law requires. Unfortunately, this leads many consumers to think these rights are standard: Big Business (Pty) Ltd lets me return goods for any reason within 30 days, so Small Business CC should allow the same. Smaller businesses often can’t afford to do this, for various reasons, but they still want to comply with the law.

How your returns policy fits in

Whether your business is big or small, your returns policy will help prevent returns becoming a major problem. In our experience, 80% of complaints about returns occur because the business either doesn’t have a returns policy, has a returns policy that isn’t clear or doesn’t look like it’s in line with the law. This is especially dangerous online, where the ECT Act says that businesses must inform consumers of their rights under the Act. This type of situation makes customers feel like the business hasn’t even considered their rights, and leads to you receiving email complaints with quotes from the CPA.

As with most things, however, the majority of the answer lies in communication. Customers are more likely to follow a clear and legal route, which makes them feel comfortable that their rights are being honoured than they will be to challenge that route.

How can we help you?

We can draft a returns policy for you that caters to your specific business, whether for goods or services, online or offline. Our returns policy:

  • is a short document in plain language that you can make available to your customers in-store or on your website;
  • describes sets out what your customer’s rights are regarding returns;
  • describes how, when and under what circumstances your customers can return goods;
  • describes what goods (if any) you do not accept returns on; and
  • includes a template returns form that your customers can fill in when they return goods.