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Can Retailers Charge a Restocking or Admin Fee for Consumers Returning Goods?

Table of Contents

In Short

  • Retailers may apply restocking or admin fees on returned items to cover operational costs.
  • Clear refund and return policies, including any potential fees, must be communicated to customers upfront.
  • Transparent policies help manage customer expectations and reduce disputes related to returns.

Tips for Businesses

Clearly outline your return and refund policies on your website, including any restocking or admin fees. Ensure customers are aware of these policies before purchasing to prevent misunderstandings. Regularly review and update your policies to remain competitive and compliant with current consumer regulations. Transparent communication fosters trust and loyalty.

In the current UK retail landscape, returning unwanted purchases has become a common occurrence for consumers, particularly with the rise of e-commerce and the increased accessibility it offers to consumers. However, businesses may find it complex to navigate the rules governing returns and fees, as these can vary significantly depending on factors such as whether the consumer makes the return within or outside their statutory rights. This complexity has left many consumers uncertain about their rights and retailers unclear about their obligations. This article outlines the regulations governing returns, restocking, and admin fees under UK consumer protection laws, with a particular focus on the Consumer Rights Act 2015 and the Consumer Contracts Regulations 2013.

In the UK, two key pieces of legislation primarily govern consumer rights related to returns, working together to create a comprehensive framework for consumer rights.

Returns Within Statutory Rights

When consumers return goods within their statutory rights, the law provides strong protections against additional fees.

Right to Cancel

Under the CCRs, consumers have a 14-day ‘cooling off’ period for goods bought online, by phone, or by mail order. This period starts the day after the consumer receives the goods. The consumer then has a further 14 days to actually return the goods after informing the retailer of their decision to cancel. There are some exceptions to the right to cancel, including in circumstances involving customised goods and unsealed goods which are not suitable for return due to hygiene reasons.

Prohibited Fees

Where a customer returns the goods within the 14-day statutory window, Regulation 34(1) of the CCRs states that the trader must reimburse all payments received from the consumer, including any standard delivery charges. This effectively prohibits retailers from charging any:

  • restocking fees;
  • administration fees;
  • handling fees; and
  • other charges beyond the direct cost of return shipping.

Permitted Costs for Consumers

While the law prohibits most fees, consumers may still face some costs when returning goods within their statutory 14-day period. Retailers can charge the following fees related to returns:

  • Return Shipping: The retailer is not required to cover the cost of return shipping, although they may choose to do so. The retailer would have to pay for return shipping if it has agreed to bear them or has failed to inform the consumer that they must pay return shipping costs before they made the purchase; and
  • Diminished Value: A retailer can deduct the value that has diminished due to the consumer handling the goods. It cannot deduct costs where the damage is caused by handling that is necessary to establish the nature, characteristics, and functioning of the goods.
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Retailer Obligations

For returns within statutory rights, retailers have several important obligations:

  • Full Refund: Retailers must reimburse all payments received from the consumer, including the costs of standard delivery. If a consumer paid for a premium delivery, the retailer can retain the price difference between standard delivery and premium delivery costs;
  • Timely Reimbursement: The refund must be made without undue delay and in any event not later than 14 days from the day on which the trader is informed of the consumer’s decision to cancel the contract; and
  • Same Payment Method: The trader must carry out the reimbursement using the same means of payment as the consumer used for the initial transaction, unless the consumer has expressly agreed otherwise.

Returns Outside Statutory Rights

When consumers return goods outside their statutory rights (i.e., after the 14-day cancellation period for distance sales or for in-store purchases without a statutory right to return), the retailer’s obligations are slightly different. Outside of statutory rights, return policies are generally at the retailer’s discretion. This means that retailers may:

  • refuse returns altogether;
  • impose time limits on returns;
  • charge restocking fees; and
  • offer only store credit instead of a refund.

However, businesses must clearly communicate these policies to consumers before purchase to make them enforceable. This is in line with the requirement for transparency under the CRA 2015.

Consumer Protections

Even outside statutory rights, consumers maintain some protections:

  • Faulty Goods: Under the CRA 2015, consumers have the right to reject goods that are of unsatisfactory quality, unfit for purpose, or not as described within 30 days of purchase. After 30 days, they are entitled to a repair or replacement; and
  • Unfair Contract Terms: The CRA 2015 prohibits unfair terms in consumer contracts. Any return policy that is deemed unfair (including if it does not align with consumer law) could be unenforceable.

Best Practices for Retailers

While retailers have more flexibility outside statutory rights, many choose to offer generous return policies to maintain customer satisfaction. It is essential that retailers clearly state return policies, including any fees, at the point of sale. When charging restocking fees, ensure they are reasonable and accurately reflect the actual costs incurred.

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Key Takeaways

Within statutory rights (a 14-day cancellation period applies to online sales or sales made outside a retailer’s shop), retailers in the UK cannot charge restocking or administrative fees, only return shipping costs (if the customer is not arranging the return shipping themselves). Outside the statutory returns period, retailers have more discretion but must clearly communicate any fees in advance. Consumers always maintain rights regarding faulty goods under the CRA 2015, regardless of the return period. You cannot charge a restocking fee if a customer is returning goods because they are in breach of the obligations under the CRA. Retailers should strive for clear, fair, and consistent return policies to maintain customer satisfaction and comply with regulations.

If you require assistance with your online business, our experienced eCommerce lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to solicitors to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

Frequently Asked Questions

Can a store in the UK charge a restocking fee when I return an item purchased online within 14 days of delivery?

No, under the CCR 2013, retailers cannot charge restocking fees or any other administrative fees for processing returns from consumers for online purchases within the 14-day cancellation period. The only cost consumers may incur is return shipping, unless the retailer has agreed to cover this expense.

What fees can a retailer in the UK charge if I return an item after the statutory cancellation period?

After the statutory cancellation period, return policies are typically at the retailer’s discretion. They may charge restocking fees, limit refunds to store credit, or even refuse returns altogether. However, businesses must clearly communicate these policies to the consumer before purchase and ensure they are not unfair under the CRA 2015.

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Humna Ahmad

Humna Ahmad

Trainee Solicitor | View profile

Humna is a Trainee Solicitor at LegalVision within the Corporate and Commercial team.

Qualifications: Humna graduated from the City, University of London with a Bachelor of Laws (Hons) and then completed the Legal Practice Course and Masters in 2023. Prior to joining LegalVision, Humna worked at a high-street firm, gaining experience in a variety of areas such as Property, Corporate and Commercial.

Read all articles by Humna

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