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Who Pays the Return Costs When a Customer Cancels a Contract?

23.06.2016, 2m

the return cost of a contract cancellation

Returns are one of the issues that many retailers are struggling with, yet it is the core of the consumer protection rights. Regulation 35 (5) of the CCRs allows the return costs to be imposed on the consumer. In the first place, retailers selling goods need to decide whether they want to offer free returns to consumers or whether the consumer shall pay for the goods that they return when cancelling an order.

Consumers shall pay for returns

If you want your consumers to bear the costs of returning, make sure that you inform your customers about the fact that they will need to pay for the return before they are bound by the contract, e.g. by placing appropriate information into your terms and conditions. Otherwise, you will have to bear the return costs yourself.

For returns, the Consumer Contracts Regulations distinguish three cases:

  1. The goods can be returned by post
  2. The goods by their nature cannot be returned by post
  3. The retailer collects the goods

Case 1: It is sufficient to inform the consumer that they have to pay the return costs. As stated above, a simple term will do.

Case 2: In this case the regulations demand more transparency. It is not enough to merely inform the consumer that they have to bear the cost of returning, but you will have to inform the consumer at the same time about what the cost of returning the goods will be.

In many cases, this will be quite difficult, especially where a retailer sells large and heavy items that need to be returned with the help of courier companies. If the exact return costs cannot reasonably be calculated in advance, you'll need to provide the estimated maximum cost. This means that in practice, retailers might need to provide quite high estimated maximum costs to cover the range of products in their shop.

Case 3: Consumers will, in this case, only have to pay you the costs of collecting the goods if they had previously agreed to do so.  Therefore it is very important that you clearly state this in your terms and conditions

Free returns

Offering your customers free returns might be a competitive advantage for your shop. However, make sure that you clearly state the delivery areas where you will bear the return costs. Otherwise, you might end up paying for a return from abroad when you had actually just calculated the costs of a UK return.

Contact Trusted Shops for info