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In this article, our Legal Advice Team Manager Andrew Oakes reviews what the law says for those purchasing or receiving gifts.
Customers are generally well protected when buying gifts for their loved ones. There is statutory protection as a consumer under the Consumer Rights Act 2015 as, essentially, they are the person who has entered into a contract with the trader. If a gift purchased is not of satisfactory quality, fit for purpose and as described under the Consumer Rights Act 2015 then, as long as the faulty gift is rejected within 30 days of purchase, the purchaser is entitled to a full refund. If a faulty gift is returned outside of the statutory 30-day period, the purchaser is only entitled to a repair or like-for-like replacement.
The purchaser has additional protection if the purchase was made via a credit card under section 75 of the Consumer Credit Act 1974 (as amended). Credit card issuers are jointly and severally liable with the trader for any faulty items should the total cost of the gift be over £100 and less than £30,000. This is useful should the trader not comply with the Consumer Rights Act 2015 in providing a remedy for faulty items and the same remedies apply under the Consumer Credit Act 1974 (as amended).
Consumers are also protected via a scheme called Chargeback, which covers credit cards but also payments via debit and pre-paid cards. Chargeback can be used in cases of goods not arriving at all, goods that are damaged, goods that are different from the description, or where the merchant has ceased trading. If the payment issuer is Mastercard then the minimum payment is £10. Should a successful chargeback claim be raised with the card issuer within 120 days, then the money will be paid to the gift purchaser by their bank account.
The above protections only apply if there is a problem with the goods themselves, rather than unwanted gifts. Nevertheless, there is additional statutory protection provided to consumers when an unwanted gift is purchased online, even when it isn’t faulty. This additional statutory protection is under the Consumer Contract (Information, Cancellation and Additional Charges) Regulations 2013. These regulations allow purchasers of online products a 14-day cancellation period to return their unwanted purchases to receive a full refund, provided the item has not been used.
However, there are still some items exempt from the right to return an unwanted item for a refund under the 2013 Regulations:
Any other legal rights of a purchaser relating to unwanted gifts, rather than faulty gifts, are determined by the contractual terms and conditions of the trader. Most shops have a returns policy, typically allowing for the return of unwanted items within 30 days, commonly on the proviso that the gifts were unused and use of the same payment method is provided to process a refund of the item (i.e., the same credit or debit card is used to process the refund) with retained original proof of purchase as evidence.
Gift receipts are also very common in shops at this time of year, allowing the purchaser to return the gift for a refund outside of their normal returns policy, but again original proof of purchase may be required. If proof of purchase has been lost, many trader’s terms and conditions of sale may only entitle the purchaser returning the item to a like-for-like replacement or a repair of the gift. A full refund may not also be given if the gift has been discounted from the original purchase price.
In contrast to the rights of gift purchasers, unfortunately gift recipients have no statutory rights whatsoever for returning faulty and/or unwanted items to a trader – they cannot insist upon a refund, repair, or like-for-like replacement.
In addition, contractual rights of the seller are also likely to be limited to the purchaser; that is, the person who has the contract with the trader. This is because the gift recipient does not have a contract with the seller. If the contract allows for gift receipts and it has been provided to the gift recipient with the gift by the gift purchaser then this may allow for an exchange or repair of a faulty item, but not necessarily a refund if original proof of purchase and payment method isn’t provided (if it isn’t a cash purchase). Gift recipients would need to check returns policies with each individual trader, however, as sales terms and conditions will vary between traders.
Nevertheless, there may be additional recourse for a gift recipient if the gift comes with a manufacturer’s guarantee or warranty – typically allowing the gift recipient to contact the manufacturer of a faulty item directly rather than the trader. The terms and conditions of the guarantee or warranty should be checked to determine the gift recipient’s rights and remedies, but usually they are limited to a repair or like-for-like replacement, rather than a refund for an item.
There is also a statutory protection for gift recipients against manufacturers of unsafe products under the Consumer Protection Act 1987, but these are limited to claims a gift recipient can pursue in the following extreme circumstances:
There is no financial limit on a manufacturer’s total liability under the Consumer Protection Act 1987. However, the gift recipient would need to be able to show that it was more likely than not that the defect in the product caused the damage. So, ultimately, a gift recipient would need to seek specialist legal advice and obtain expert evidence should a manufacturer deny liability for their products.
To ‘wrap up’… gift recipients would generally need to ask the purchaser to enforce their statutory and contractual rights regarding any purchase. Alternatively, they may want to ask for all receipts if the purchase was in cash and the trader’s contractual terms and conditions of sale allow for a refund for unwanted and unused items within the time specified by the trader. Of course, this can lead to very awkward conversations with family or friends if the gift is merely unwanted; we suggest waiting for the smell of sprouts to dissipate before telling your loved one that the… jazzy… jumper you’ve received isn’t quite to your taste…
If you require any further information in relation to this update, or details of our products and services, please contact your Partnerships Manager or email [email protected].