AS a consumer, a restocking fee may be something you’ve never heard of, yet it lurks in the fine print of many store policies and receipts.
If you’re lucky, you may never encounter it. But if you try to return an item you don’t want anymore, you might just get caught in its dark net.
What is a restocking fee? It’s a deduction made by a store when you return one of its products. Generally, you are refunded the price you paid for the item, less a percentage (usually 10% – 20%) representing the restocking fee.
To demonstrate how it works, let’s say you bought a brand new 55-inch smart TV from your favourite store for $5,000. You take it home, open the box, then receive the same item as a gift from your mother. You don’t need two smart TV’s, so you take the one you bought back to the store the next day for a full refund. The store has a 10% restocking fee, and only refunds you $4,500. You’re now $500 out of pocket.
In principle, a restocking fee is meant to compensate the store for its actual cost in receiving the returned item and processing the item back into its inventory. In actuality, many restocking fees bear little resemblance to the actual cost of restock a returned item.
They more resemble a gross penalty for choosing to return an item. Policies on this fee are not standard and do differ from store to store.
The big question is: Must you accept that restocking fee? In Trinidad and Tobago, there are no laws specifically governing that issue of restocking fees. The legality of restocking fees therefore resides within the realm of contract law. What then does contract law say about it? I explain below…
To be bound by the restocking fee, in general, you must be notified of the fee before you purchase the item. It can be a large sign somewhere in the store before you reach the cashier, it can be a box that you tick in an online store showing you agreed to the terms of purchase (including the restocking fee) before you click the “pay” button.
Generally, in contract law, you cannot be bound by a term unless you knew of it before you entered into the contract. If you did not know about the restocking fee before you made the purchase, you cannot be bound by it. Unless the store can prove you are aware of the store policy beforehand, a restocking fee policy printed on a receipt may not be sufficient to bind you to this charge. This is because you weren’t notified of the charge before the contract was concluded.
General principles of contract law, however, have many exceptions and their application depends of the facts of each case. So, what are your choices if you do not want to accept the restocking fee?
If you see it printed on the receipt before you leave the store, you can try to immediately return the item as a precaution and buy it elsewhere where there are no such disincentives against purchases. Most stores don’t charge restocking fees on unopened items, so you may be successful at getting a full refund.
Other than that, you can try to negotiate in person with the store. If this doesn’t work, you have the option of seeking the assistance of an experienced lawyer specialising in contract law. In a worst-case scenario, you can sue in the Magistrate’s Court Petty Civil Division for the deducted restocking fee.
Pending government regulation of this growing practice, one can hope for an enlightened world of commerce in TT, where store owners recognise that restocking fees, while representing an actual (minor) cost to the company, ought to be absorbed and not passed on to the customer. And that building customer loyalty and making customers feel at ease when making purchases, is much more important to achieving higher sales.
Disclaimer:The contents of this article are for general informative purposes only. It does not provide legal advice and does not create an attorney-client relationship with any reader. For legal advice on your specific situation, please contact an Attorney-at-Law of your choosing directly. Liability for any loss or damage of any kind whatsoever allegedly incurred a consequence of using content in this article is thus hereby excluded to the fullest extent permitted by law.
Must You Accept that Restocking Fee?
AS a consumer, a restocking fee may be something you’ve never heard of, yet it lurks in the fine print of many store policies and receipts.
If you’re lucky, you may never encounter it. But if you try to return an item you don’t want anymore, you might just get caught in its dark net.
What is a restocking fee? It’s a deduction made by a store when you return one of its products. Generally, you are refunded the price you paid for the item, less a percentage (usually 10% – 20%) representing the restocking fee.
To demonstrate how it works, let’s say you bought a brand new 55-inch smart TV from your favourite store for $5,000. You take it home, open the box, then receive the same item as a gift from your mother. You don’t need two smart TV’s, so you take the one you bought back to the store the next day for a full refund. The store has a 10% restocking fee, and only refunds you $4,500. You’re now $500 out of pocket.
In principle, a restocking fee is meant to compensate the store for its actual cost in receiving the returned item and processing the item back into its inventory. In actuality, many restocking fees bear little resemblance to the actual cost of restock a returned item.
They more resemble a gross penalty for choosing to return an item. Policies on this fee are not standard and do differ from store to store.
The big question is: Must you accept that restocking fee? In Trinidad and Tobago, there are no laws specifically governing that issue of restocking fees. The legality of restocking fees therefore resides within the realm of contract law. What then does contract law say about it? I explain below…
To be bound by the restocking fee, in general, you must be notified of the fee before you purchase the item. It can be a large sign somewhere in the store before you reach the cashier, it can be a box that you tick in an online store showing you agreed to the terms of purchase (including the restocking fee) before you click the “pay” button.
Generally, in contract law, you cannot be bound by a term unless you knew of it before you entered into the contract. If you did not know about the restocking fee before you made the purchase, you cannot be bound by it. Unless the store can prove you are aware of the store policy beforehand, a restocking fee policy printed on a receipt may not be sufficient to bind you to this charge. This is because you weren’t notified of the charge before the contract was concluded.
General principles of contract law, however, have many exceptions and their application depends of the facts of each case. So, what are your choices if you do not want to accept the restocking fee?
If you see it printed on the receipt before you leave the store, you can try to immediately return the item as a precaution and buy it elsewhere where there are no such disincentives against purchases. Most stores don’t charge restocking fees on unopened items, so you may be successful at getting a full refund.
Other than that, you can try to negotiate in person with the store. If this doesn’t work, you have the option of seeking the assistance of an experienced lawyer specialising in contract law. In a worst-case scenario, you can sue in the Magistrate’s Court Petty Civil Division for the deducted restocking fee.
Pending government regulation of this growing practice, one can hope for an enlightened world of commerce in TT, where store owners recognise that restocking fees, while representing an actual (minor) cost to the company, ought to be absorbed and not passed on to the customer. And that building customer loyalty and making customers feel at ease when making purchases, is much more important to achieving higher sales.
Copyright © 2020 Neela Ramsundar, LL.B (HONS), L.E.C Civil Litigation Attorney at Law & Certified Mediator.
Disclaimer: The contents of this article are for general informative purposes only. It does not provide legal advice and does not create an attorney-client relationship with any reader. For legal advice on your specific situation, please contact an Attorney-at-Law of your choosing directly. Liability for any loss or damage of any kind whatsoever allegedly incurred a consequence of using content in this article is thus hereby excluded to the fullest extent permitted by law.
Other articles by Neela Ramsundar: