Online retailers flouting law with returns policies, warns Which?


Which? has exposed scores of online retailers which have returns policies in breach of consumer law offering Buy Now, Pay Later and other forms of payment, potentially putting shoppers at risk of losing their money if they want to send back unwanted or faulty goods.

The consumer watchdog found more than 170 online retailers, listed on Klarna, Clearpay or Laybuy’s apps or websites, that have incorrect returns or faulty goods policies on their sites.

The retailers also offered other payment methods at the checkout, such as PayPal, Apple Pay, Google Pay and Amazon Pay, as well as letting customers pay directly with debit or credit cards.

While Buy Now, Pay Later (BNPL) services offer speed and convenience at the checkout, they – like debit cards – do not give consumers the same protections as those paying between £100 and £30,000 with credit cards.

Which? looked into retailers offering BNPL schemes after hearing from one consumer who found a retailer with a dodgy returns policy through the lender’s app. Consumers could be wrongly putting their trust in these retail sites because they offer well-known BNPL schemes.

Many of the retailers Which? looked at refused refunds on full-priced, non-faulty or sale items, offering store credit or exchanges instead.

Some of the retailers gave shoppers 14 days or less to send back an unwanted item, while others charged “restocking” or “administration” fees for making a return, which could be as high as 20 per cent of the price of the unwanted items.

This is contrary to the Consumer Contracts Regulations, which gives consumers the right to cancel orders for most goods bought online within 14 days of receiving the item. These rules apply to items bought in a sale or on discount too, and shoppers shouldn’t be charged to make a return.

Which?’s research also found that 36 retailers had incorrect or misleading faulty goods policies that could leave customers stuck with items that are not fit-for-purpose.

Retailers were not giving customers long enough to detect or report a fault with a product, with some asking for faults to be reported within a few days of the order being received.

This is in breach of the Consumer Rights Act, which gives you 30 days to notice a fault with a product and get a refund, repair or replacement. After 30 days, you could still be entitled to a refund, repair or replacement if the item is faulty and in some cases, a further right to reject.

Customers could find themselves stuck with faulty goods – and having to temporarily continue paying them off to the BNPL scheme – if shopping with these retailers.

In all, Which? found 95 stores that did not offer refunds on sale items on its websites, while 74 retailers failed to give customers the minimum length of time to return orders.

17 retailers were also found not to offer any refunds to customers at all and 16 sites even charged fees for making item returns.

Which? is writing to all 170 retailers, urging them to change their policies in line with UK consumer law.

Separately, Which? is calling for unregulated BNPL products to become regulated by the FCA after it found that 24 per cent of BNPL customers were encouraged to spend more than they could afford.

The FCA is already looking into unsecured credit, which BNPL is one example of. Which? has given evidence to this review and will continue to share insight.

Says Adam French, Which? Consumer Rights Expert:

“Many consumers could be lulled into a false sense of security by the convenience and familiarity of Buy Now, Pay Later. Online shoppers must not assume that a retailer is reliable just because it offers BNPL at the checkout.

“Given that many people’s finances are stretched now more than ever, we believe that the FCA needs to regulate the BNPL market to ensure there are more protections in place for consumers to avoid these costly situations.”

How to shop safely and get a refund:

Don’t get caught out by retailers with dodgy returns policies – read Which?’s advice on shopping safely online and securing your money back if something goes wrong.

  • Research the retailer and watch out for fake reviews when shopping with unfamiliar names
  • Double-check the retailers’ returns and faulty goods policies before making a purchase
  • If you used BNPL to pay and are struggling to return the item(s) contact the retailer and the BNPL lender
  • If you used a credit card or debit card to pay and are struggling to get a refund you may be able to attempt a Section 75 or chargeback claim
Chris Price
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