Have you ever tried returning a product you purchased, but was not allowed to? Were you turned away by the store’s customer service on grounds that the store practiced a “no return or refund” policy?
The law generally permits such “no return or refund” policies to exist. However, such policies are only valid in law if two main conditions are satisfied. Otherwise, such a policy is not valid and the customer can insist that the product be returned / money refunded.
The first condition is that the customer must be informed of the policy BEFORE the purchase was made – not after the purchase. For this reason, the courts have struck down such a policy where it is only stated on the receipt, which is given to the customer only AFTER payment is made – see the Federal Court case of Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 MLJ 441.
The second condition is that the product purchased must be of “acceptable quality” – see Section 32 Consumer Protection Act 1999. Note that this does not mean that the product must be perfect or as good as new. Factors such as the product being second-hand, or that the product was heavily discounted / on sale, or that the “irregularity” or “imperfection” was pointed out to the customer before he/she bought it, are all taken into account when assessing if the product is of “acceptable quality”. Where it is not, the second condition is not satisfied.
Notwithstanding the two conditions, Sections 24A – 24I of the Consumer Protection Act 1999 grants the court the general power to strike down a term in a contract that is “unfair” and thus void or unenforceable – including a no return / no refund term.
This usually applies in situations where the seller and purchaser actually sign a contract for the item sold/purchased (usually big-ticket items), as opposed to buying something over a counter. The court is more likely to exercise this power if the unfair term is part of a standard form contract prepared by the seller and which the purchaser had no real choice but to accept – see the case of Su Tiang Joo v Tribunal for Consumer Claims & Anor [2020] MLJU 1035)
So next time you are told by a seller that you cannot return a product or that a refund is not possible, stop for a moment and ask yourself if such a policy is valid in law. Apply the two conditions, and if you find that the two conditions are not satisfied, pluck up some courage and politely but firmly inform the seller that the store’s “no return / no refund” policy is illegal.
About the Author
Kenneth is a Founding Partner of XK Law. He graduated with honours from the University of London, United Kingdom. He is driven by a passion to give voice to the voiceless and does this through his practice.
