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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Online merchant insisting on additional ID

February 4, 2012 00:42 by Consumer Ed

Dear Consumer Ed:

We recently ordered $800 worth of merchandise from an online store that we have purchased from in the past. A few days after placing the order, the company sent me an email stating that in order to complete the transaction, we had to email them photocopies of both front and back of the credit card used and a government-issued ID, and if we didn't they would cancel our order.  I called VISA, and they told me that the only companies allowed to request that additional information are hotels, airlines, car rental companies and cruise lines.  I did not send the company the information they requested, so they refused to send me my order. Can they do that?

Consumer Ed says: 

Many states have laws that dictate what kind of information merchants can and cannot ask for when a consumer pays with a credit card.  However, all merchants are subject to the rules and regulations outlined in their contract with the credit card company.  For example, your card company, VISA, has International Operating Regulations that state merchants cannot require a cardholder to provide any supplementary information as a condition for honoring a VISA Card, subject to some exceptions.  Supplementary cardholder information can include social security numbers, fingerprints, home or business addresses or telephone numbers, driver’s license numbers, photocopies of driver’s licenses, photocopies of the VISA Card, and other credit cards. As you stated, hotels, airlines, car rental companies, and cruise lines do fall within the exception to the rule. 

So, while a merchant may ask a consumer for identification, he generally may not deny a VISA credit card transaction because the consumer refuses to show identification.  Generally, a signed credit card is all you should need to present in order to avoid showing identification.  Be aware that identification may be required for other purposes, such as purchasing alcohol, tobacco products, or certain medications. 

Paying online or by phone can sometimes create an exception for the merchant, and they may ask for some identifying information, such as a zip code.  This varies a bit by credit card company:  MasterCard’s rule for merchants regarding supplemental identification is similar to VISA’s; American Express doesn't ban merchants from requiring customer identification, though it discourages the practice; Discover’s policy allows merchants to request identification if desired.  You should always contact your credit card company and ask about its policy regarding supplemental identification. Often, you will find that many merchants ignore or are unaware of this identification rule.  If you’re shopping in a store rather than online, and you don’t want to show identification, simply sign your card and refuse to provide ID if asked.  If you feel strongly about not showing identification, you may wish to print out a copy of the relevant merchant rule and ask to speak to a store manager. 

In your particular case, you can email the merchant a copy of Visa’s International Operation Regulations.  If the merchant still demands to see your identification, and then refuses you service if you fail to comply, you should contact your credit card company to open an incident report.  This will initiate an investigation, which can result in a warning or even a fine to the business for violating their merchant contract.

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Store refuses to give refund on mattress

January 19, 2012 23:16 by Consumer Ed

Dear Consumer Ed: 

My husband and I purchased a latex mattress largely based on the recommendation of the store manager. I had never heard of the brand, but the next morning I read some very disturbing reviews about the mattress breaking down in six months. I called the store manager that same day and told him we wanted to cancel the order. Even though the mattress had not even left the warehouse yet, the manager flat out said, “No. All sales are final.”  My husband and I did not notice that policy written on the sales order or on the charge slip. Do you think a credit card chargeback would go through on something like this? 

Consumer Ed says: 

If you can provide documentation that the retailer was deceptive in some manner about the mattresses or that the retailer failed to honor its own explicit return policies, you may be able to successfully waive the charge through a credit card chargeback.  Unfortunately, in the circumstances you describe, you may not have a valid claim against the retailer, especially if its no-return policies were written on the sales order/charge slip.  In any case, you should check with your credit card provider to see what is needed to support a claim and request for chargeback.

When a retail sale is made at the retailer’s regular place of business, Georgia law does not require the retailer to provide a refund or accept returns or exchanges.  A business may set its own return policy and may offer consumers cash, in-store credit, exchanges or no adjustment at all.  While businesses are not required to post their policies, they must honor any posted refund or return policy.  Except in very limited circumstances, the law generally does not guarantee you the right to a refund or a three-day cancellation.

Prior to making any major purchases, you should ask questions, compare prices, and read ads, product reviews and the manufacturer’s warranty.  Whenever you purchase big-ticket items (especially things like mattresses), you should always get everything in writing, including all warranties, promises and return policies.  Always keep copies of contracts, receipts and warranties.  A manufacturer’s warranty may provide you with recourse if the mattress turns out to be defective. 

Finally, if the retailer misrepresented the quality of the mattress, or stated that the mattress was new when in fact it was actually used (or made with used materials), the retailer may be in violation of the Fair Business Practices Act.  In these circumstances, you can file a complaint with the Governor’s Office of Consumer Protection by calling 404-651-8600 or visiting www.consumer.ga.gov.

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