Upon returning goods to a shop, consumers often feel confused about the type of remedy they should be offered by the seller. This confusion often stems from lack of information about what consumers are legally entitled to when they return a product. Should consumers accept a credit note in such a situation or should they insist on money refund?
What is a credit note?
A credit note is a document issued by a seller to a customer instead of a refund. Similar to a voucher, a credit note can usually only be redeemed from a particular shop or chain of shops that issued the credit note.
There are various types of credit notes with different terms and conditions of use. For instance, most credit notes have a use-by date, and unless it is observed, the value of the credit note will be lost. This time limit varies from one seller to another. One can also be given a credit note without an expiry date.
Credit notes may also have conditions concerning how or on what products they can be used on. For instance, there may be a clause stating that the credit note cannot be used on ‘sale’ items or during promotional offers. It is important that all the applicable terms and conditions are written on the credit note and these cannot be changed after the consumer accepts the credit note.
Is it legal for a seller to offer a credit note instead of a refund?
Whether or not a credit note should be offered instead of a refund depends on the reason why consumers are returning the goods.
If the goods are defective, then consumers have specific rights as stipulated in the Consumer Affairs Act. In the first instance, the faulty goods should be either repaired or replaced free of charge. If these remedies are not possible, or if opted for, may cause a significant inconvenience to consumers, then the latter have the right to claim a part or full refund of the money paid.
If in such situations, consumers are only offered a credit note, then consumers would be getting less than what they are legally entitled to. Hence, consumers should not accept the offered credit note and instead insist on a refund.
Another situation where consumers may be offered a credit note is when they change their mind about the product purchased and return it to the seller. In such cases, sellers have no legal obligations towards their customers. Fortunately, however, most retailers adopt return policies that allow consumers to return unwanted products and exchange them with something else. These sellers often also offer credit notes which their customers can use on a future purchase.
Consumers’ responsibilities when given a credit note.
In the first instance, consumers are responsible to carefully read and observe all the terms and conditions written on the credit note. Consumers should check if the credit note has an expiry date and make sure to use it before it expires.
Any other instructions on how and where the credit note can be used must also be followed. Care should also be taken to not lose the credit note because if this happens, sellers are not obliged to re-issue the credit note and consumers may end up empty-handed.
Any difficulties concerning consumer rights and responsibilities about the use of credit notes may be addressed to the Office for Consumer Affairs through the ‘Contact Us’ form on the MCCAA website below, or by calling on: 8007 4400 or 2395 2000.
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