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Selling goods – getting it right under the new Consumer Rights Act

With less than a month to go before the Consumer Rights Act comes into force, we take a look at the changes that traders should be aware of when selling goods.

Selling goods – Getting customer service journeys right under the new Consumer Rights Act

The Act, which comes into force on 1 October 2015, has been created to consolidate the current landscape of consumer legislation and create a clearer, more user-friendly set of rights and obligations.

Although it primarily brings consumer law under one roof, there are still some important upgrades to consumer rights, which will impact traders, especially those with significant post sale customer interactions.

Those with systems designed to routinely replace or refund will now have to allow for a customer demanding a repair (perhaps in relation to an item no longer available for sale).

Those companies who more routinely expect to repair goods will need to be aware of the new “two strikes and you’re out” rule. If the repaired product still doesn’t comply with the contract after the first attempt (including if another minor defect occurs), the customer may be able to demand their money back.

We take a look at those changes in more detail below.

Statutory rights under goods contracts

Most of the requirements regarding goods (e.g. to be of satisfactory quality and fit for purpose) have been imported from the Sale of Goods Act, with the following additional consumer rights:

  1. Goods must match any model seen / examined by the consumer (e.g. furniture to match model seen in showroom) – variances need to be brought to the consumer’s attention (e.g. wooden products: “there may be natural variations in appearance of wood”).
  2. Where the goods are to be installed by the trader, such goods will not conform to the contract if installed incorrectly – installation will not be classed as a service so get it wrong and the remedies for goods are triggered.
  3. Non-conforming digital content included with goods will mean the goods themselves are considered defective.
  4. Consumers will not be bound to accept delivery by instalments unless agreed – if you deliver in instalments, this needs to be in your T&Cs.

Remedies for defective goods

Here there are important changes. Customers no longer have a reasonable time to return and get a refund for non-conforming goods – they now have a flat 30 days (or prior to the Best Before date for perishable goods). Alternatively, they can also ask for a repair or replacement in that time, if preferred. Doing so will suspend the 30 day period, with the greater of the remainder of the 30 days or a further 7 days after the item is repaired / the replacement is given to still be entitled to a refund. Strictly speaking the customer is required to show that the problem was present at the time of delivery to get the refund.

Once the 30 days is up, the right to a remedy (repair/replace in the first instance and return for a refund or price deduction as a second tier remedy) remains for up to 6 years, but it is significantly qualified. In the first 6 months there is a presumption that the problem was present at the time of supply – but the trader can dispute that. After 6 months and up to 6 years, the onus shifts back to the customer to prove it.

The trader now only has a single chance to attempt a repair or replacement in a reasonable time (presuming the trader hasn’t used up that right during the suspended 30 day short term right to reject). If the goods fail again afterwards, even if it is for a different reason, the customer has the option to keep the item and demand a partial refund or reject the product for a full refund. If the customer rejects the product the trader can make a cash deduction for fair usage (but not depreciation).
 
A case study:

  • Hannah buys a designer handbag and uses it for two months before the clasp breaks. Her 30 day right to reject has passed but she would like a replacement bag. As the fault has arisen in the first 6 months, the presumption is that the product was faulty on delivery and the shop should issue a replacement (or if the bag can be repaired at significantly less cost, repair the defect).
  • 6 months later, the internal zip on the replacement bag splits. The onus shifts to Hannah to prove it was faulty when she bought it, but for an expensive bag like this she might reasonably have expected a more robust zip than this.
  • Hannah has some options. She can have the zip repaired. However as this would be a second attempt by the trader to get it right (it’s used up its repair/replace opportunity) she can also choose whether to reject the bag or receive a reduction against the price.
  • If Hannah insists on the refund the shop needs to give it, but can make a reduction against the purchase price for the 8 months of use. They cannot take into account the second hand value of the bag.
  • Hannah decides to keep the bag (and get her local dry cleaners to put a new zip in it). The shop is still required to refund an appropriate amount to reflect the difference between the bag as sold and its value if it had had the right quality zip. How much that works out to be is something they’ll have to work out between them, but if she’s not satisfied she can approach Citizen’s Advice, her local Trading Standards, and/or take to social media!

This is a broad summary of what we think the main changes are. Please get in touch if you need any assistance in preparing your business for the changes.

Author - Rosanna Biggs

Read the rest of our articles in this series:

Top tips for preparing for the Consumer Rights Act 2015 »

Services – new statutory rights & remedies under the Consumer Rights Act »

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.