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Consumer refund laws

Updated April 17, 2017

Businesses are free to design their own refund and exchange policies, but they are required by law to post the details of these policies conspicuously, so that consumers can assess them before making a purchase. If a company does not properly post the specifics of its refund policy, the policy cannot legally be enforced.

Posted Notices

Laws for the posting of refund and exchange policies vary from state to state, but most laws require the policy to be posted conspicuously at all registers. Other acceptable ways of posting the return policy include tags on the merchandise, and signs near each entrance of the store.

The notice must specify the time limit for a refund; whether the refund will take the form of cash or store credit; any restrictions on exchanging items; whether the consumer must provide proof of purchase; and any specifications relating to "as is" items, sale items and gift cards. Many companies print this information on the customer's receipt, but this practice does not constitute compliance with consumer refund law.

State Law

In the event that a customer demands a refund from a noncompliant company, the company is required by law to abide by the refund policy set by the state. For example, state law might stipulate that the customer is entitled to a cash refund if she returns the merchandise within seven days of purchase, in unopened or new condition, with proof of purchase. Alternatively, the law may require the store to exchange the unwanted item for an item of equal or lesser value.

Consumer refund laws are in place to appease consumers who have grown accustomed to continuity of return and exchange policies between stores, and would be shocked to find a business enforcing drastically different policies.

Exceptions

Exceptions to these posting requirements mainly concern the sale of perishable goods, which stores can legally refuse to refund or exchange. Stores can also legally refuse to exchange or refund damaged merchandise and items no longer in their original packaging, whether or not they've posted this policy. Also, if a business customises goods in order to conform with the customer's wishes, it can refuse to refund or exchange those goods without facing legal repercussions.

Some retailers retain the personal information of customers who return merchandise, and submit it to a tracking service called the Return Exchange. Based on these statistics, they may deny service to customers who return merchandise too frequently.

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About the Author

PaTreshena Thompson has been writing since 2006. Her articles have been printed in Saige Woman magazine as well as Courage By 8 magazine. Thompson achieved a Master of business administration at the University of Houston and completed a Bachelor of Arts in journalism at Sam Houston State.