Online retailers accused of breaching returns and refund rules
The consumer group is concerned that being able to pay via well-known BNPL payment services such as Klarna, Clearpay and Laybuy is encouraging consumers to shop on unreliable or unknown websites.
Which? is urging customers to read retailers’ returns policies before parting with their money. It says shoppers may be at risk of losing their money if they want to send back unwanted or faulty goods to some sites.
Returns policies which break the law
Which? found more than 170 online retailers, listed on Klarna, Clearpay or Laybuy’s apps or websites, that had incorrect returns or faulty goods policies on their sites.
Which? warned that consumers could be wrongly putting their trust in these retail sites because they offer payment via these 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% 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.
Laybuy and Crazy Shred
One Laybuy customer contacted Which? after finding an online store with a dodgy returns policy via Laybuy’s app.
Crazy Shred sells gym equipment, clothes and tech products. Its returns policy on its website stated that a £25 administration fee would be charged for orders cancelled after 48 hours of being placed.
This policy is contrary to the Consumer Contracts Regulations which gives you rights to cancel most online orders for goods from the moment they are placed, up until 14 days after receiving the goods.
Crazy Shred removed the administration fee from its returns policy after Which? raised the issue.
A statement from Laybuy said: “Refunds via Laybuy are subject to each merchant’s refund policy. It’s important customers ensure they are happy with a merchant’s own terms and conditions before purchasing from them, and that they contact the merchant first should they wish to dispute a matter.
“Once a refund is approved by the merchant, Laybuy will process the refund immediately and send an email to the customer to confirm. The bank may take five to seven business days to process this. Until a refund is approved, customers are liable for any outstanding payments to Laybuy.”
Faulty goods failings
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.
Which? warned that 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.
Which? found 95 stores that didn’t offer refunds on sale items on its websites, while 74 retailers failed to give customers the minimum length of time to return orders, and 17 retailers didn’t offer any refunds to customers at all.
Which? is writing to all retailers concerned, urging them to change their policies in line with UK consumer law.
Adam French, Which? consumer rights expert, said: “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.”