A customer has peeled the clingfilm off my stationary pack that they have bought and has creased the envelopes putting them back into the pack but have now cancelled the contract under the 14 day cooling off period. Do I have to refund them for the entire amount as I can’t resell this pack now.
Under the Consumer Contracts (Information, Cancellation and Additional Chargers) Regulations 2013, the position regarding handling of goods is as follows:
“If (in the case of a sales contract) the value of the goods is diminished by any amount as a result of handling of the goods by the consumer beyond what is necessary to establish the nature, characteristics and functioning of the goods, the trader may recover that amount from the consumer, up to the contract price.”
But what does this actually mean?
A trader cannot usually deduct for removal of packaging to inspect the item, but can deduct for damage or wear and tear where the item has not just been checked but used.
So in this example, if the clingfilm had been removed, but the envelopes weren’t creased, it would not usually be possible to deduct an amount from any refund for handling. However, as the corners of the envelope are all creased, this is likely to enable you to refuse a refund for the entire pack.
Where goods are returned without their original packaging (for example, the box containing an electronic device), it may be possible to justify a deduction for use if the packaging was designed for that product as part of its presentation (not just to protect it during transit).
The BIS CCRs Guidance gives the following examples:
- A toaster returned with crumbs in it is an item in respect of which the trader can make a deduction for use. The consumer does not need to test the toaster since, if the toaster proves to be faulty the consumer has rights under other legislation
- A large toy model kit for assembly is returned without the original bubble wrap and brown box used for delivery and with the model's box with photo and description torn, and the plastic packets containing the plastic bricks inside opened. The trader cannot deduct for the bubble wrap and brown box since it would have been reasonable for the customer to remove these to see the item in the way they would in a shop. However, it would not have been necessary to go further and open the box nor especially to open the sealed packets. The trader is able to reduce the refund to reflect the diminished value.
Recital 47 to the CRD states that:
- The consumer should only handle and inspect the goods in the same manner as they would be allowed to do in a shop and gives the example that a consumer should only try on a garment and should not be allowed to wear it.
- Even where consumers have used the goods in an unacceptable way the consumer should not lose their right to withdraw; the trader's remedy is to make a deduction.
A trader cannot usually deduct for damage caused solely from opening the packaging to access the item, if similar goods are normally displayed in shops in an unpacked condition. However, any protective films applied to the goods should only be removed where strictly necessary to test it. It also adds the following examples as to how the “shop handling” test could be applied:
- Before purchasing audio/video and recording equipment, the consumer would normally be able to test the image or sound quality.
- Trying on a garment in a shop would not involve the removal of the manufacturer's tags.
- The consumer would not normally be able to practically test household appliances, such as kitchen appliances, the actual use of which unavoidably leaves traces.
- The consumer would not be able to configure software on a computer; hence reasonable costs for any resetting of such equipment would also constitute diminished value.
However, the Commission CRD guidance does indicate that returning goods without their original packaging (for example, the box containing an electronic device) could justify a deduction for use if the packaging was designed for that product as part of its presentation (not just to protect it during transit). Deductions for use can also be made for cleaning mattresses that have had their protective films removed and which have to be resold at a (significantly) lower price (as “used”).
NOTE however that you cannot make any deduction for use if you have failed to provide the consumer with information on their right to cancel, so make sure you have the right wording in your consumer contracts! If you don’t have that, then look at getting hold of my e-commerce terms that contain all of the right wording to protect you in this regard. Email us at [email protected].
If you're interested to know more and to ask your own questions to top business lawyer Suzanne Dibble and learn from the experience of lots of other small business owners, then click here to apply to join our thriving membership for just £1 for your first month!
© Suzanne Dibble 2013-2022
The information contained above is provided for information purposes only. The contents of this article are not intended to amount to advice and you should not rely on any of the contents of this article. Professional advice should be obtained before taking or refraining from taking any action as a result of the contents of this article. We disclaim all liability and responsibility arising from any reliance placed on any of the contents of this article.