No return, no exchange?

No
deal!
By
Dean Nilo Divina
The holidays are fast approaching! Have you prepared your Christmas shopping list?
And have you scouted where the bazaars are? In this season of giving, shopping
centers,marketplaces, retail outlets, bazaars, flea markets and fairs, abound. And
being the typical Filipinos that we are, we cannot but resist purchasing presents or
groceries and other goodies in time for the yuletide festivities.

“Note that a “No Return, No Exchange” policy is prohibited because this is considered deceptive.

Suppose that after the hustle and bustle of Christmas shopping you discover that the
shelf life of the canned goods you purchased had already expired, or other bought
items are defective, can you have them returned or your money refunded instead?
What if the source business establishment posted a “No Return, No Exchange”
policy?

By all means, you can have your defective purchases returned or money refunded. A
No Return, No Exchange policy is expressly prohibited under the law. Under
Republic Act 7394, otherwise known as the Consumer Act of the Philippines, as well
as its implementing rules and regulations, it is specifically mandated that the words
“No Return, No Exchange” or words to such effect shall not be written into the
contract of sale, receipt in a sales transaction, in any document evidencing such sale
or anywhere in a store or business establishment.

Note that a “No Return, No Exchange” policy is prohibited because this is considered
deceptive. Under the Consumer Act, in conjunction with the New Civil Code of the
Philippines, sellers are obliged to honor their warranties and grant corresponding
remedies to consumers.
As such, consumers should be allowed to return or exchange the goods, or avail
themselves of other remedies, in case of hidden faults or defects, or any charge the
buyer was not aware of at the time of purchase.

By warranties, we mean the assurances or representations of a seller to a buyer

with regard to the product or good sold. These warranties may either be express or
implied.

Express warranties are those explicitly made known to the buyer, usually contained
in a warranty card which specifies the guarantees to the buyer in clear and
understandable language.

These express warranties must, at the very least, contain the name of the warrantor
and the warrantee, the specific parts or services warranted, the extent of the
warranty (full or limited), duration, procedure for claiming against the warranty
and the remedies of the buyer in cases of malfunctions or defects.

Implied warranties, on the other hand, refer to those which are inherent in a sale
transaction.

“Consumers should be allowed to return or exchange the goods, or avail themselves of other
remedies, in case of hidden faults or defects.

Under our New Civil Code, a seller shall be responsible for warranty against hidden
defects, which the thing sold may have, should the defect render it unfit for its
intended use, or if the defect diminishes its fitness for such use to such an extent
that, had the buyer been aware thereof, he would have bought the thing sold for a
lower price, or simply withheld the purchase.

In fact, the seller shall be liable for this implied warranty notwithstanding that he
himself is unaware of the hidden defect(s). On the other hand, should the defect be
so patent or obvious, the buyer cannot be allowed to make the seller answerable for
the same on the ground of fairness.

In general, in cases of breach of the seller’s warranties, the Consumer Act entitles
the buyer to choose any of the following alternative remedies: repair of the product,
in whole or in part; replacement of the product with a like or equivalent product;
refund of the purchase price of the product less a reasonable allowance for use or
payment of reasonable damage.
In enforcing these remedies, however, bear in mind that you must at least prove the
sale transaction. Obviously, the official receipt is the best proof of the transaction. In
cases where the official receipt is not available, the buyer may resort to any other
alternative proof.

This “No Return, No Exchange” policy only refers to those goods which, at the time
of the sale, had hidden defects or imperfections. Hence, it cannot be availed of where
the defect of the goods was due to the mishandling of the buyer, or in cases of “as-is-
where-is” transactions, or in sale of second-hand articles. Much less, the buyer
cannot demand return or refund because he had a change of heart.

As a final note, while the laws provide remedies in cases of sale deceptions or
deficiencies or irregularities, the best protection is almost always prevention.

Hence, a word of caution this season — Christmas shopper, beware! Examine your
purchases.

Check the expiration date of the product, test it and physically examine for defects.
Check the warranties, if any. Always ask for an official receipt and more importantly,
keep it. Ask for the allowable period for the return or exchange or refund of the item
bought. And finally, know your consumer rights and keep them handy.

So without further ado, go forth and have a merry and worry-free holiday shopping!
The return and
exchange policy
A retailer can build a good selling reputation by having a sound return and exchange
policy in place.
By | Jun 13, 2013

Retailers sell manufactured goods straight to the consumers. This role makes the retail
business vital to both manufacturers – who are given a wider network to distribute and
sell their products – and the consumers – who need access to these products.

Retailers face consumers directly and this places a great responsibility for them to ensure
that the products they sell are of good quality, reliable, and safe. To thrive in the business,
a retail store must develop a reputation for selling quality products. After all, consumers
look for value for money these days, and no one would patronize a store notorious for
selling defective wares.

One way to build a good selling reputation is to have a return and exchange policy in
place. Undersecretary Zenaida Cuison Maglaya of the Department of Trade and
Industry’s Consumer Welfare and Trade Regulation Group says a sound return and
exchange policy reflects a retailer’s genuine concern for customer satisfaction as he
consciously upholds the quality and reliability of the products he offers for sale.
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Maglaya says taking care of the customers is one crucial strategy many retailers overlook
or take for granted. Fully aware of the direct effect a satisfied clientele has on a
business’s bottom line, the DTI had embarked on a campaign to convince retailers that
“consumer welfare is business welfare.” Offshoots of this campaign were the
establishment of Consumer Welfare Desks in retail stores and recently, the search for the
DTI Certified (consumer-friendly) Establishments.
“On its face, the return and exchange policy is meant only to protect consumers against
hidden defects, but this policy also effectively builds goodwill between the retailer and
his clients. The store benefits in the long run because when he satisfies a customer, that
customer will return,” says Maglaya.

So how does a retailer formulate a good return and exchange policy? He or she must set
the conditions under which he is willing to accept a return or an exchange of goods. He
can choose to accept only those products with factory defects, which the Consumer Act
mandates, or he can choose to do more, such as accept returns or exchanges even if the
products passed muster.
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The Consumer Act places the responsibility on the seller to act on the buyer’s behalf
whenever a consumer product is found to be defective. If a warranty covers a product, the
retailer should present the warranty claim to the manufacturer or distributor at no cost to
the buyer. The retailer should also shoulder the costs of honoring the warranty if the
manufacturer or distributor fails to do so. In these cases however, the retailer can proceed
against the manufacturer or the distributor. The retailer must also bear the cost of
replacing, repairing, or refunding a defective item when the manufacturer cannot be
identified or when the retailer did nothing to preserve perishable goods.

<>The second consideration is the period that elapsed from the date of purchase to the
time the non-defective product is returned. The retailer must decide on a reasonable time
frame depending on the item he’s selling. Most establishments set a seven-day period.
This condition does not apply to products with hidden defects, since some can appear
perfectly fine at the start and then suddenly malfunction after a while.

To guard against possible consumer abuse of this policy, the law mandates businesses to
repair, replace, or refund only products with hidden defects. Replacing items in good
condition is completely voluntary, and retailers may do so if they think it will build good
customer relations.
But how does a storeowner prevent fraudulent consumer claims? For instance, defective
products bought from another establishment, or those who would demand a replacement
when it was they who damaged the product but will not admit doing so?

No return, no exchange? No such

thing
Posted on January 07, 2015
Amicus
FOR MOST of us, the recently concluded holidays meant enduring Curiae
crowded malls and waiting in long lines to shop for gifts for our Eleanor N.
loved ones. Christmas is, after all, the season of giving, and many of Balaquiao
us go through great lengths to make the experience of gift-giving
special. In the hustle and bustle of Christmas shopping, however,
some of us would purchase the wrong items or buy defective
products. Hence, it is always important to be aware not only of
what gifts our loved ones wished for but also of what we can do when confronted
with the hazards of gift shopping.

The Consumer Act of the Philippines and its Implementing Rules and Regulations extend protection to
consumers against unfair commercial practices. Regrettably however, there are still many business
entities that refuse to comply. There are, for example, a number of stores that still implement a “no
return, no exchange” policy. Worse, a majority of buyers are unaware of the remedies granted by this
law. The week after the holidays is perhaps the best time to acquaint ourselves with our rights as
consumers.

Under the law, consumers are entitled to certain warranties from the seller. Warranties are essentially
affirmations or assurances made by the seller to the buyer as to his products. Warranties, for
example, can refer to representations by the seller that his product is fit for the purpose for which the
consumer intends to use it. These warranties are important, as they grant consumers certain remedies
in case the product they purchased malfunctions or is defective.

The Consumer Act provides for specific requirements if a seller intends to make express warranties for
his goods. For ordinary consumers, these requirements guide us in what we must look for in order to
ensure that the products we are purchasing are properly covered by a warranty. An express warranty
must set the terms in clear and understandable language. The seller or manufacturer must also clearly
identify himself as the warrantor. Consumers must also make sure that they are identified as the party
to whom the warranty is extended. Its terms must also specify which parts of the product are covered
by a warranty. Further, consumers must check if the warranty provides for the procedure that they
must comply with if the product malfunctions or turns out to be defective. This procedure must also
include the period within which the warrantor undertakes to remedy the defect.

This law also guides consumers as to what they must do to make a warranty claim. A consumer, in
claiming a warranty, must present either the warranty card or the official receipt. Note that the law
expressly states that the warrantor cannot demand that a consumer present any other document
other than these. A warranty claim may be presented directly to the manufacturer or distributor who
must immediately honor the warranty. The warranty claim may also be made to a retailer who must
undertake to present the claim to the distributor on behalf of the consumer, without any cost to the
latter. A seller cannot refuse to fix a defective product with the excuse that he is implementing a “no
return, no exchange” policy. Such a policy is prohibited by the Consumer Act.

Once a warranty claim has been presented, the warrantor must then fix or repair the consumer
product within a reasonable period. This service is without cost to the consumer if the consumer
product malfunctioned or failed to conform to the written warranty or turns out to be defective.
However, if after a reasonable number of attempts to fix the product, the defect still remains, the
warrantor must allow the consumer to choose between asking for a refund or a replacement. If the
consumer chooses to ask for a refund, the amount which may be attributed to the consumer’s use of
the product before the discovery of the defect will be deducted. However, not every defect or
malfunction is protected by a seller’s warranty. The warrantor may be absolved of his obligations
under his warranty if the defect, malfunction or failure to conform to the warranty was caused by the
consumer’s unreasonable use of the product.

These obligations are not mere reminders. A seller who violates the warranty obligations stated under
the Consumer Act can be fined with not less than P1,000 but not more than P50,000, or imprisonment
for one year but not more than five years, or both.

If the seller does not comply with his obligations, consumers can also go directly to the Department of
Trade and Industry (DTI), the government agency tasked to implement the Consumer Act’s provisions
on warranty. Consumers can file a petition or letter-complaint with the DTI. In addition to the
penalties of imprisonment and fine under the Consumer Act, the DTI can impose administrative fines,
issue cease and desist orders, accept a voluntary assurance of compliance from the seller, require a
restitution or rescission of the contract without damages, and order the condemnation of the product if
it is hazardous to health and safety.

In a just-concluded season when buying products becomes symbolic of our appreciation for loved ones
who will receive them as gifts, buying goods that turn out to be defective or malfunctioning can be
stressful. Thus, it is valuable to take note of how we, as ordinary consumers, can remedy these
problems by invoking our rights under the law. This knowledge allows us to ensure not only that we
get value for our money but also that the gifts we give truly reflect the gratefulness that we have for
the people who receive them. In this sense, a working knowledge of our rights and remedies is a gift
in itself.

Eleanor N. Balaquiao is a junior associate of the Litigation and Dispute Resolution Department of the
Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).