Refund policies for online merchants

April 11, 2012 18:54 by Consumer Ed

Dear Consumer Ed:

I purchased some merchandise online.  The company shipped the order, which I later returned.  The merchant never posted a credit, so I notified my credit card company and requested a chargeback.  The merchant is now saying, "All refunds are for merchandise only.”  Can they do this?  I'm pretty sure the website did not have this language before, but I can't be sure.

Consumer Ed says: 

It sounds as if the merchant is saying that when an item is returned, they will only give store credit or exchanges rather than a full refund.  In Georgia, merchants are not required to give a refund or credit unless the merchandise is defective, or if the buyer was persuaded to purchase the item based on deceptive or misleading advertising.

Most sellers offer some sort of refund or credit because they want customers to return, not out of any legal obligation.

However, sellers are required to clearly state their return/cancellation policies. If you were sure that the website did not say "all refunds are for merchandise only" at the time of your purchase, then you might be able to claim that it was deceptive of them to misrepresent your refund or cancellation rights. But if the seller did disclose this policy previously, then you are probably out of luck.

If you believe the product you bought was defective, that the advertising was misleading or deceptive, or that the website did not disclose the return policies before you made the purchase, you can submit a complaint to the Better Business Bureau at www.bbb.org; to the Federal Trade Commission at www.ftc.gov; or to the Governor's Office of Consumer Protection at  www.consumer.ga.gov or by calling 404-651-8600 or 1-800-869-1123.

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Handling fee on ticket purchases

March 22, 2012 17:20 by Consumer Ed

Dear Consumer Ed: 

I just spoke with a comedy club and was informed that an $8.99 handling fee is charged on "all" tickets purchased, even on-site at ticket booth/box office.  I thought if a ticket was purchased on-site or at a box office, a handling fee could not be charged. 

Consumer Ed says: 

For tickets purchased on-site or at the box office, Georgia law allows the owner, operator or sponsor of the event to add a service charge in addition to the face value of the ticket.  You can ask the comedy club what the handling charge is for.  If they say that it is for dinner, gratuity, parking or surcharges, which must be paid by the customer in order to see the show, these things fall under the definition of “face value”, and therefore should be included as part of the original ticket price.  Note that additional federal, state, or local tax charges are not included as part of the “face value.”

However, the law does place some limits on ticket brokers (outside agents who resell tickets to events) who charge a premium in excess of the face price of the ticket.  These brokers must be licensed, pay additional taxes, clearly list the face value of the ticket plus the additional fees, and give refunds if warranted.  These limitations do not apply to an owner or operator where the event is held, or the authorized ticket agent of such persons (e.g., Ticketmaster).  Further, regardless of who’s selling the tickets, there are no legal limits on service charge amounts, even for ticket brokers.

Still, if the comedy club fails to disclose the cost of the handling fees, or advertises ticket prices but charges additional fees for items that should have been included in that face price, the club’s advertising could be found to be unfair or deceptive.  If this is the case, you can submit a complaint to the Federal Trade Commission at www.ftc.gov or to the Governor's Office of Consumer Protection at www.consumer.ga.gov or by calling 404-651-8600 or 1-800-869-1123.

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Restocking fees

February 16, 2012 22:43 by Consumer Ed

Dear Consumer Ed: 

I purchased four speakers for my husband and paid $911.60 for them.  At the time of purchase the store owner told me the item was not in stock and that it would be 1-2 weeks before the product would arrive from the manufacturer.  I paid for the product in full.  It has been 3 weeks now and I still have not received the speakers.  The store cannot give me a definitive date as to when they will be in.  I contacted the manufacturer to see if they could tell me when they shipped the items to the store, and they said that the store never placed an order with them for the items.  I asked the store to refund my money so I can purchase the items elsewhere.  The store is willing to give me my money back minus a 20% restocking fee. Is it legal for them to take $182.32 from me for restocking an item even though the company never placed an order for the item? 

Consumer Ed says: 

In Georgia, retailers are allowed to set their own policies regarding refunds and exchanges, including those related to “restocking fees”.  Restocking fees have become increasingly common in today’s market, particularly when a return involves an electronics purchase.  However, while the collection of these fees is permissible, there may be circumstances where a retailer should not enforce such a fee, or circumstances where charging it would be unfair or even deceptive.

First, the retailer should adequately disclose the existence of these charges before the purchase becomes final (this requirement is not met by retailers who print their return policies on the back of their receipts, which are issued after a purchase is made).  Second, with regard to the delay in delivery, if delivery cannot be made within a reasonable time of the promised date, federal law requires the seller to give timely notice of the delay, giving the consumer the option to cancel and receive a full refund.  In states that do have laws addressing re-stocking fees, it’s illegal to charge them in the following situations:  They are being charged in connection with the return of defective merchandise; they are being charged because the retailer delivered the wrong merchandise; they are being charged because the retailer failed to deliver the merchandise within the promised time period; they exceed 50% of the purchase price of the merchandise; or the restocking fees are not adequately disclosed to the customer.

Finally, a “re-stocking” fee implies, by its very name, a fee imposed to cover costs associated with placing merchandise back into the store’s stock.  You don’t say whether you had any advance notice of your retailer’s restocking/cancellation policies.  However, if you can show that the store owner not only failed to deliver your order when initially promised, then failed to give you a specific delivery date, but also never placed an order with the manufacturer, there doesn’t appear to be a reasonable basis for the retailer to have charged you a restocking fee.  A restocking fee in such a situation may violate Georgia’s Fair Business Practices Act.

In a situation where the store owner may be charging unfair restocking fees, there are several options.  First, you should try to get written corroboration from the manufacturer confirming that the store owner never placed the order.  You can then try to dispute the charge with your credit card company, and submit this corroboration with your dispute.  You could also submit a complaint to the Better Business Bureau to see if they can help mediate the situation between you and the retailer.  Finally, you can submit a complaint to the Federal Trade Commission at www.ftc.gov or to the Governor’s Office of Consumer Protection at www.consumer.ga.gov or by calling 404-651-8600 or 1-800-869-1123.

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