Restocking fees?!? Are the legal

andie_303

Hi

I'm a small business who keep a fairly small inventory on the store premises and replenish when items sell.

We sell items via the Internet and of course use DSR allowing our customers to return products if they are unwanted for 7 days from the date of receipt.

However increasingly customers are returning the products after this time and expecting a refund - terms and conditions are clearly stated on our website saying refunds are accepted for 7 days and exchange or credit note for a further 21 days.

After the 7 days have passed we tend to order replacement stock so when people return outside of the specified time it not only leaves us with overstock but having spent money on the replacement stock and then on a customers refund.

I'm thinking of implementing a restocking fee of perhaps 15-20% if someone returns outside the DSR 7 days and does not want an exchange or credit note.

What I'm wondering is is this legal? I see other small businesses doing it but would prefer to be sure of my facts before doing so.

Savvy_Sue

There will almost certainly be a link to the DSR on the Consumer Rights board, plus this question gets asked there from the buyer's POV at regular intervals.

But I would recommend getting your T&C checked by a commercial solicitor (ie one who specialises in this kind of thing) if you haven't already done so.

Mistral001

One general point. You need to break down this "restocking fee" Is the percentage that you are coming up with the actual cost to you that you are passing on to the customer?. It cannot be arbitary, or else it will be a penalty or a fine. If the actual additional cost to you is mostly administration then perhaps all that you can charge is an administration fee, which is unlikely to be justifiable as a %.

paddyrg

They need to inform you within 7 working days, but the actual return needn't be within 7 days.

Restocking fee is legal, maybe something that reflects the cost of postage , packaging, 30 mins of admin and reshelving plus a component for having extra inventory storage costs or whatever. I assume the goods are still in saleable condition when people send them back? Or are you dealing with bottomfeeder idiots who use you as a free rental service?

I'd be inclined to refuse the future business of anyone I thought was taking the mickey and squealing 'i no my ritez u hav 2 giv me compo' (you see them all the time on the Consumer Rights board).

ciderboy2009

I was under the impression that charging restocking fees to consumers was made illegal some years ago - a quick google seems to back this up although I've not been able to locate the relevant legislation.

InsideInsurance

Restocking fees wouldnt be acceptable for anything returned as per the DSR, but as has been pointed out, only the cancellation of the order must be made within 7 days not the return of the goods themselves.

If you were notified outside of the DSR window then you can charge a restocking fee (assuming you want to accept returns at all) but to avoid unfair contract issues then the fee must be proportional to the true cost to the business itself.

andie_303

Thanks all I'll give a recent example which may help clarify

We sold product A which retailed at £99 + p&p it was sent on a Friday Special Delivery and signed for at the destination the next day.

13 days later we receive them item back as "unwanted" still in a saleable condition. Buyer did not notify us before sending back. They stated they want a refund. In the meantime we have restocked said item at trade price of £39.

Therefore in this instance a restocking fee of 15 or 20% of their purchase price would not cover the item we have bought into cover it.

If its a day late or we have some sort of contact I would have no problem with this but it's when customers send things back after the time with absolutely no contact and expect it to be ok.

I guess of course I could just send their over due returns back to them.

Just as a side bar if they only have to notify you within 7 days is there no cut off for when the item should arrive with you?

Wywth

andie_303 wrote: »

Hi

I'm a small business who keep a fairly small inventory on the store premises and replenish when items sell.

We sell items via the Internet and of course use DSR allowing our customers to return products if they are unwanted for 7 days from the date of receipt.

However increasingly customers are returning the products after this time and expecting a refund - terms and conditions are clearly stated on our website saying refunds are accepted for 7 days and exchange or credit note for a further 21 days.

After the 7 days have passed we tend to order replacement stock so when people return outside of the specified time it not only leaves us with overstock but having spent money on the replacement stock and then on a customers refund.

I'm thinking of implementing a restocking fee of perhaps 15-20% if someone returns outside the DSR 7 days and does not want an exchange or credit note.

What I'm wondering is is this legal? I see other small businesses doing it but would prefer to be sure of my facts before doing so.

As long as you meet the statutorey requirements a cxonsumer has under the DSR (where the application of a re-stocking fee would not be permissible) then you can decide whatever terms you want for taking back unwanted stock. You don't have to take it back at all if you'd rather not.
Make sure any terms for taking back stock (particularly outside of the DSR) are documented in your terms and conditions.

Wywth

andie_303 wrote: »

...I guess of course I could just send their over due returns back to them...

You don't even have to send the item back, although you can't actually keep the item either.

What many suppliers may do is charge the customer the return postage, and if that is not forthcoming, perhaps include a storage fee until the item is collected or paid for re-delivery (with a cut off date when it may be disposed of).

How about a no returns policy without prior notification (and you issuing a returns number)? Anything coming back without the returns number is not accepted. Simples :cool:

andie_303

Wywth wrote: »

How about a no returns policy without prior notification (and you issuing a returns number)? Anything coming back without the returns number is not accepted. Simples :cool:

Thanks I thought about this too but when deliveries come in we do not necessarily know who they may come from to which to accept and which to refuse.

real1314

andie_303 wrote: »

Thanks I thought about this too but when deliveries come in we do not necessarily know who they may come from to which to accept and which to refuse.

Accepting a delivery doesn't mean that you accept any right of return, any more than an ordinary householder accepting delivery of unsolicited goods means that they have to pay for them.

You should just stick with DSRs and no more, unless you really want the hassle, imho.
Unsolicited returns should be held against a storage fee, and returned if the custoter pays the return postage cost/collects.

Incidentally, your example of the 15 or 20% re-stocking fee vs £39 replacement stock cost doesn't really stack up - you now have 2 products to sell rather than 1. A reasonable fee would be based on the cost of handling, plus any lost value due to either price changes or spoilage rates in storage.
Probably better just sticking to DSR though (to which you cannot charge re-stocking):cool: