When the act became effective on April 1, it gave consumers the right to demand quality service and to full disclosure of the price of goods and services, and protection against false, misleading or deceptive representations.
Predictably, the section of the act which is shaking up the marketplace most is Section 56: “Implied warranty of quality”. For decades, many retailers have adopted a “sorry for you” attitude when their customers return problem goods. Either they refuse to accept that the goods were defective in any way, or they begrudgingly take the goods back and issue a credit note, valid for a short period of time. In short, they’ve assumed total power to decide how to respond when problematic goods are returned.
Actually, common law has for many years protected consumers against defective goods – though few realise this – but it doesn’t give consumers the right to decide how they’d like to be compensated, leaving suppliers to decide what to do, if anything. And manufacturer or store warranties limit recourse to repairs, because it’s obviously much cheaper for a company to repair an item than replace it or refund a customer’s money in full.
But the act has turned that status quo on its head, giving the consumer the power to decide on the remedy – and he or she is backed up by a Consumer Commission and Consumer Tribunal which have the power to impose hefty penalties on companies which fail to comply with the terms of the act.
If goods bought by consumers fail in some way, the consumers get to decide which of the three Rs – a refund, replacement or repair – they want. If the consumer opts for a repair, and that repair fails within three months, or “a further failure, defect or unsafe feature is discovered”, the supplier must replace the goods or refund the customer. The only exception to this is when consumers know and accept that they are buying low-quality or defective goods. If a consumer opts to have goods repaired, the statutory warranty on the goods as a whole is extended for a further three months.
But, says Chris Charter, a director in the competition and regulatory practice at Cliffe Dekker Hofmeyer business law firm, if that repair fails during that three-month period, the consumer doesn’t have the right to demand a refund at that point. “It’s then the supplier’s prerogative to replace rather than refund.”
How so? Because the wording of the act gives the supplier the discretion to choose replacement or refunding, he says. “If the repair fails, the remedy is not ‘at the direction of the consumer’ as with the original failure. Taking the wording at face value, it then seems that the supplier can elect to replace or refund where the previous repair does not hold within three months. It may be, however, that the replacement results in the original six-month warranty period starting anew, so that the consumer will have another opportunity to demand a refund if the product proves faulty.”
In other words, if you’re gatvol of the product by that stage, after two failures, you won’t be entitled to demand your money back – you’ll have to accept a replacement if that’s what the supplier opts for. And only if the replacement proves to be defective will you be able to demand a refund. This may lead consumers to conclude that they’re better off asking for a refund the first time a product fails, when they have the right to choose the remedy.
Ina Meiring, director at Werksmans Attorneys, anticipates problems with the practical enforcement of the act’s “refund, repair or return” section. “There will no doubt be disputes over goods returned for refunds well into that six-month period,” Meiring said. “Take a pair of shoes, for example – what the consumer regards as a ‘failure’ of the shoes, the supplier may well regard as normal wear and tear in the course of five months, or accuse the customer of some kind of abuse, such as walking over gravel.” Challenges include getting this act into the heads of both consumers and businesses; dealing with dispute situations which boil down to “he said, she said” with no proof on either side; and, as always, enforcement.
One last, important word about returns: One of those bright young things in that classroom last week had read an e-mail doing the rounds about the act, which mentioned giving consumers the right to return “impulse buys” within a certain number of days. “So if we buy a top and decide we don’t want it, can we return it and ask for our money back?” she asked. That may be true of goods bought via direct marketing – when the “high pressure” sale was instigated by the supplier – but the act certainly doesn’t compel suppliers to take all goods back if they are not defective. Many retailers do accept non-defective goods back within certain time frames in exchange for a voucher, as a customer-friendly service, but it’s not a legal requirement – not now, and not from April when the act comes into force.
Oh, and about those vouchers – the act will spell the end of three-month or six-month limits on pre-paid vouchers or gift cards. Suppliers will be compelled to honour them for at least three years.
Wendy Knowler, Pretoria News
14 March 2011