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Clearing up retail misconceptions around the CPA

by Carla Koutroulis. We look at the most common, and often misunderstood provisions of the CPA that affect retailers; and clear up any confusion.

by Carla Koutroulis. The purpose of the Consumer Protection Act (“CPA”) was to promote a “fair, accessible and sustainable marketplace for consumer products and services”. It has been hailed as a win for vulnerable consumers – but often appears that it has left retailers scrambling. However, a proper understanding of the CPA can assist retailers in ensuring that they do not fall foul of the CPA, as well as know when they can enforce their rights. Proper training will also go a long way to arm retailers’ staff with sufficient knowledge on how to deal with customers when disputes arise.

Below we look at the most common, and often misunderstood provisions of the CPA that affect retailers; and hopefully clear up any confusion that may occur with regards to these provisions:

1. “Cooling-off period”

Many consumers have heard that the CPA has a “cooling-off period” that allows consumers to return goods for a refund within 5 (five) days of purchase. What many consumers do not realise is that this provision (section 16) only applies to purchases made as a result of direct marketing. This means the retailer must approach the consumer, either in person or by mail / electronic communication, promoting or offering the goods or services in question to which the consumer responds by purchasing any such goods or services. Accordingly, a consumer that walks into your store, browses the racks and makes a purchase, is not entitled to evoke the cooling-off period in order to return the goods a few days later.

2. General right of return

Some consumers believe that they are entitled to return an item simply because they have changed their mind. The CPA does not provide for a return in this instance. The retailer can therefore have its own terms and conditions on how it wishes to deal with a return in such circumstances, for example, allow the return but only provide an exchange or store credit, for example.

3. Return of defective goods and an implied warranty of quality

In terms of section 56, consumers do have the right to return goods should they be unsafe or defective, for a full refund, provided they are returned within 6 (six) months from the date of delivery. The retailer may also offer to repair or replace the defective goods, however, the election of whether or not to opt for a refund, repair or replacement, rests solely with the consumer.

4. Goods not seen before purchase

Where a consumer has not had an opportunity to examine or inspect the actual goods received before purchase, they may inspect the goods on delivery and if the goods do not meet the type or quality one could reasonably expect; or where the goods were a special or custom order do not meet those specifications, then the customer may refuse delivery and request a refund, with the supplier bearing the cost of return delivery. It is therefore essential when producing special order goods, that the consumer sees and approves any mock ups prior to delivery, to mitigate the potential dissatisfaction on the consumer’s part.

5. Incorrect pricing

A frequent occurrence for retailers is where an incorrect price label is placed on an item, or where there is an error in the pricing, such as listing an item for R120 instead of R1,200. Firstly, section 23 states that any goods for sale must display a price, and that the price must be displayed adequately. A retailer cannot require a consumer to pay a higher price than the price displayed with the product, or where there are two prices concurrently displayed, the higher of those two prices. That being said, the retailer is not required to sell the product to the consumer at the lower price where there is an inadvertent and obvious error. For example, where a cellphone is worth R12,000 but inadvertently displayed for sale for R120, it would not be reasonable for a consumer to expect to purchase the item for that price.

6. Vouchers

Store credit and vouchers must be valid for a minimum of 3 (three) years per section 63(2) of the CPA.

7. ECTA

The Electronic Communications and Transactions Act will apply to online sales, in addition to the CPA. Therefore, retailers with online stores should also be aware of what provisions of ECTA may be applicable, as certain provisions of ECTA may override the CPA. Where there is a conflict or inconsistency between the two Acts, whichever provides the consumer with the greater protection will apply. Chapter 7 of ECTA applies to consumer protection, however, there are various exceptions listed in section 42(2), so it is important to confirm whether the product you are selling from your online store falls into one of these categories, and if so ECTA would not be applicable to those transactions. Section 44 of ECTA provides a 7-day cooling-off period in terms of which a consumer is entitled to cancel a transaction without penalty (except for the costs of returning the goods). In addition, the requirement that the sale must have taken place by way of direct marketing as per the CPA, will not apply. Simply put, the consumer of any online sale of goods or services (other than those exceptions listed in section 42(2)), may cancel or return goods purchased for a refund, within 7 days of delivery, for any reason.

It is clear from the above that consumer (and conversely, retailer) rights are nuanced; and it is therefore imperative that retailers have a grasp of the relevant laws, and as previously stated, ensure that their staff have adequate training on the relevant provisions in order to manage any such scenarios with customers. Many consumers do not fully understand their rights and may often tout provisions of the CPA in order to obtain a refund, which over the space of time could cost retailers significant income.

Main image credit: Unsplash.

 

 

Carla Koutroulis is a Senior Associate at Consilium Legal, a boutique legal and business advisory.

 

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