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If you run an electronics shop, you should draft a clear and efficient return or refund policy. Because of the nature of the industry, faults and glitches are common occurrences in technology, so you should be prepared when customers come back to you complaining of that fact. Ensure that your return policy is fair and does not undermine any of your consumer law obligations. This article will: 

  • explain how consumer law applies to selling electronics; and 
  • suggest some key points for your electronics return policy to cover.

Selling Consumer Electronics

In most cases, the electronic goods you sell will be consumer products, which means that consumers buy them for personal or household use. When you provide these kinds of products, you have to uphold certain guarantees that consumer law imposes on you. The electronic goods you sell must be:

  • fit for their intended purpose;
  • of acceptable quality (i.e. safe to use, and free from small faults);
  • the same as any demonstrations or descriptions you give;
  • sold at a reasonable price, if you did not agree on a price beforehand;
  • delivered within a reasonable time frame and in good condition; and 
  • sold legally.

As an electronics store, customers would expect that you have some way of making small repairs to your electronics, such as fixing a broken screen monitor. You can fulfil this guarantee by:

  • having the skills to repair the product yourself; or
  • having a contract with your manufacturer or other trusted repairer to fix these products.

Commercial Electronic Goods

In some cases, the electronic products you sell may not be ‘consumer products’. Consumer guarantees do not cover these commercial products, so you do not have to uphold them. These could be products that:

  • you sell to another business, and you have contracted out of the Consumer Guarantees Act; or
  • a consumer would not buy for their personal use.

For example, if you sell PA systems, that may not be a consumer product. 

However, there are other assurances in place, such as contract terms and fair trading law, that govern these kinds of transactions.

Providing Remedies For Customers In Your Electronics Return Policy

If you break one of your consumer guarantees, the law requires that you give the customer some kind of remedy. This would be a:

  • repair;
  • replacement; or 
  • refund.

As long as you meet this minimum requirement, you can tailor your return policy to suit your business’ needs. Facilitating returns can be costly for your business, but a fair and efficient return policy can help customer retention and satisfaction. Your in-store policy is only in addition to what the law provides, and cannot override your customers’ consumer rights.

Make sure your return policy is easy to understand and easily accessible. You should display it somewhere that customers can easily find it. This could be:

  • on a clearly marked page on your website;
  • included with your sales agreement and any other transaction documentation;
  • next to the till in your physical store;
  • included with product packaging; or
  • on customer receipts.

In your policy, be sure to cover the following:

Refund or Return Eligibility

You do not have to give customers a remedy in all situations, such as if a customer:

  • changed their mind about the purchase;
  • damaged the product themselves (for example, by not following usage instructions);
  • knew about any faults in the product when they bought it; or
  • went to a third party to repair the item before coming to you.

For example, say a customer goes to an independent phone repair shop to fix a smartphone they purchased from you. If the product is still broken and they then come to you to fix it, you do not have to provide a remedy.

However, you may decide to provide remedies outside of the situations that the law requires. So if a customer changes their mind about the colour of the speaker they bought, you may allow them to swap for a different colour. Whatever you decide, outline it clearly in your return policy so that customers are aware of these situations.

Applying and Returning Products

The next key point to cover is to let your customers know how they can apply to return their product for a refund or other remedy. This means:

  • letting them know how they can contact you for this purchase, such as through your website or in-store;
  • explaining what kind of investigation or inspection process will occur;
  • informing them of what they need to provide, such as proof of purchase or other important details;
  • how customers can get the product itself back to you, whether that be for delivery or dropping it off instore; 
  • what condition the products need to be in when they return it; 
  • outlining any legal disclaimers relating to any potential damage during product return delivery; and
  • any delivery costs involved (for example, whether you or the customer will cover paying for postage).

For example, you may allow customers to return products with a postage-paid return label they can print out from your website. Outline in your return policy how they can access this label, and in what packaging they should send the product back.

Key Takeaways

Take care to ensure your return policy for your electronics store is fair and efficient. Ensure you are meeting your legal obligations and providing the kind of service you want customers to know your business for. If you would like more information or help with your electronics shop return policy, contact LegalVision’s regulatory and compliance lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

Do I have to repair faulty products?

You do not necessarily need to have the ability to repair faulty products yourself, but you should have some way to repair them. This could mean having a repair contract with your supplier, or an independent repair person.

What is a return policy?

A return policy, also called a refund policy, outlines when customers can return products they purchased from your business. This will outline your consumer guarantees and your own store policies.

When do I have to give a refund?

You have to give customers a refund, or some other appropriate remedy (such as a replacement or repair), when you break your consumer guarantees. You do not have to give a refund if a customer changes their mind.

Do I have to give a refund if a customer damages a product?

If a customer damages a product and asks you for a refund, in most cases you do not have to give them one. If the product was damaged before they received it, you do.

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