Restocking fees?!? Are the legal

oldoakey

In my trade retailers normally charge a 25% restocking fee which I think is reasonable, don't forget your losing the element of profit too so it does add up. This fee can be waived at your discretion but if its in your terms then its your decision to treat each case on its merits.

somethingcorporate

oldoakey wrote: »

In my trade retailers normally charge a 25% restocking fee which I think is reasonable, don't forget your losing the element of profit too so it does add up. This fee can be waived at your discretion but if its in your terms then its your decision to treat each case on its merits.

Restocking fee cannot cover lost profit because the company still have the item to make the profit on.

25% is completely arbitrary and would not stand up in court unless it is based on a true pre-estimate of loss (of which profit is not one ).

oldoakey

[/QUOTE]25% is completely arbitrary and would not stand up in court unless it is based on a true pre-estimate of loss (of which profit is not one ).[/QUOTE]

Why should it be based on any loss, if the customer in my case does not measure up the door ways to allow us to deliver the large 4 seater sofa they ordered and we cannot get it into the house because of the size then they forfeit a charge which is clearly stated in the terms they signed up for on ordering.

This is normal in my trade and why shouldn't it be, we have the expense of restocking, failed delivery costs, warehouse costs, loss of profit etc. Seems reasonable to me and there are many very large retailers who do use this charge on a regular basis.

oldoakey

I suppose given that the product is later than the 7 days allowed you could just say we charge 25% restocking fee and if that does not go down well you could just say well keep the item then - job done.

somethingcorporate

Because you cannot have financial penalties in a contract. They are an unfair term regardless of what you have put in your contract.

Any that are based on reasonable costs (known as a genuine pre-estimate of loss) but not including profit is fine. Anything dressed up as a % is completely arbitrary and would not stand up in court.

If it went to court a judge would not allow your penalty - simple as. There is no such thing as punitive damages under UK law.

Anywhere you see it in huge corporate contracts, the ones I have been involved in for instance, any "penalty" i.e. late delivery clauses etc with a "penalty" payable would certainly be based on an estimate of costs incurred as a late running of the project.

Even if it is common in your industry does not make it a) right or b) legal and any reasonably savvy consumer will challenge it.

Wywth

somethingcorporate wrote: »

Because you cannot have financial penalties in a contract. They are an unfair term regardless of what you have put in your contract.

Any that are based on reasonable costs (known as a genuine pre-estimate of loss) but not including profit is fine. Anything dressed up as a % is completely arbitrary and would not stand up in court.

If it went to court a judge would not allow your penalty - simple as. There is no such thing as punitive damages under UK law.

Anywhere you see it in huge corporate contracts, the ones I have been involved in for instance, any "penalty" i.e. late delivery clauses etc with a "penalty" payable would certainly be based on an estimate of costs incurred as a late running of the project.

Even if it is common in your industry does not make it a) right or b) legal and any reasonably savvy consumer will challenge it.

It isn't a financial penalty. It's a term over and above the suppliers legal obligations under which they are prepared to accept returns.

Only a fool would waste time & money attempting to challenge such a term they had previously agreed to.

somethingcorporate

Wywth wrote: »

It isn't a financial penalty. It's a term over and above the suppliers legal obligations under which they are prepared to accept returns.

Only a fool would waste time & money attempting to challenge such a term they had previously agreed to.

If it's not under DSR this is correct - I was under the assumption that it was referring to returning under DSRs when it would be an unfair term under UCTA (Unfair Contract Terms Act).

More info here: Section 5 about financial penalties in contracts:
http://www.oft.gov.uk/shared_oft/reports/unfair_contract_terms/oft311.pdf