If You Sell Products to Consumers
If your business sells products to consumers, these transactions are covered by the Sale of Goods and Supply of Services Act 1980.
This legislation is under review by the Department of Business, Enterprise and Innovation.
This law gives consumer rights to members of the public who buy or hire goods from you for their private use or consumption. It doesn’t apply if your business sells mainly to other businesses.
When you sell a product, you make a contract with the buyer. Under this contract, you agree to provide certain goods to the consumer at a certain price, and the goods should be:
- Of merchantable quality – that means that they must be of a reasonable standard taking into account their price and what they are meant to do
- Fit for the purpose they were bought for – they must do what they are reasonably expected to do
- As described – in other words, you must not make false or exaggerated claims about them. The description can be something written on the package, for example, or something said by a sales assistant to the customer, or claimed in an advertisement
A car that cannot be driven, a washing machine that does not wash, a piece of chocolate that is clearly inedible – these are all examples of goods not being fit for their purpose. A product that breaks down in an unreasonably short time may not be of merchantable quality too.
If your goods fail to comply with any of the above three criteria and the consumer is not to blame – for example, they turn out to be faulty or don’t live up to their description – consumers have a number of options under consumer law.
Faults with goods may be major or minor and present different issues for particular products.
If the fault is major, for example a consumer buys a mobile phone and it stops working shortly after they start using it due to a major fault with the phone, they have the option to reject the goods and rescind (end) the contract.
If the fault is minor, for example a button is missing from a piece of clothing the consumer bought, they have the option to request a repair, replacement, a reduction in the price they paid or a refund. However, if you as the trader refuse to meet their requests, or there is an unreasonable delay in providing one of these remedies, then the consumer has the right to reject the goods and rescind the contract.
If you offer to repair the item, the repair should be permanent. If you offer a refund, this can be in cash or by cheque, or you can refund their credit or debit card. If you offer a credit note or voucher instead, the consumer has the right to refuse and to ask for a refund instead.
Remember, if a consumer returns faulty goods, it is always you, the trader – and not the manufacturer – who is responsible for sorting out their complaint.
If the shopper is not happy with your offer of a repair, replacement or refund, they have the right to seek an alternative remedy. They are entitled to take legal action if they are not happy with your final offer. They also have the option to refer the matter to the Small Claims Court, which handles claims of up to €2,000 by consumers against traders.
- It is up to you whether you wish to operate a returns or exchange policy that goes beyond the consumer’s basic statutory rights. While you are not legally obliged to do this, it is considered good business practice to do so and customers may be impressed by your goodwill gesture
- If you accept a deposit from a customer and then do not adhere to terms of the contract, e.g. by taking significantly longer to deliver the product, then you may be obliged to refund the deposit
- You are entitled to proof of purchase. This doesn’t necessarily have to be the receipt. The customer could show the relevant credit card statement or any other paperwork that proves the product was purchased in your shop or retail chain
- Many retailers exchange unwanted gifts without a receipt if the store’s tags or labels are still in place. Some retailers provide a gift receipt that does not state the price of the item but allows the customer to pass on a proof of purchase with the gift
- If a consumer returns faulty goods, remember that it is always you, the retailer –not the manufacturer – who is responsible for sorting out their complaint
- Never have notices in your shop or clauses in sales agreements that say things like “No refunds”, “Goods will not be exchanged” or “No liability accepted for faulty goods”. These types of statements can give the impression that the consumer does not have certain rights under the Act, and you may be committing an offence
Under consumer legislation, it is an offence to make a false or misleading claim about your goods and prices.
Some products come with a manufacturer’s guarantee. However, this is in addition to any right of redress a consumer may have from a retailer. Even during a guarantee period, the primary responsibility under the legislation rests with the trader.
Sometimes a consumer may decide to claim under a manufacturer’s guarantee. However, they still have the option of claiming from you if the manufacturer’s response is not satisfactory. You may also have some responsibility for seeing that the manufacturer observes the terms of the guarantee.
Traders also have the option of offering their own guarantee (as opposed to, or on top of, a manufacturer’s guarantee). But this cannot limit or take away from the consumer’s rights.
If you do offer a guarantee as a trader, remember that you must be genuinely prepared to stand over it. So spell out the guarantee’s terms in writing. This will avoid any possible confusion that might arise with a purely oral guarantee.
If consumers buy goods from you on the basis of a sample provided by you, the goods must conform to the sample, and the customers must have a reasonable opportunity to check if they do conform. The goods must be free of defects, which would not be apparent on reasonable examination of the sample.
Consumers have the same rights when buying second-hand products as they have when buying new ones. The goods should be fit for the purpose for which they are sold, though they might not be expected to be as durable as a brand new item.
If a consumer is entitled to a refund, you can make the refund in cash, by cheque or by credit or debit card refund. However, a credit note is not an adequate form of remedy unless the consumer voluntarily accepts it.
Any notices that state that refunds will only be made in the form of credit notes may be restricting the rights of a consumer who is entitled to a refund, and you may be committing an offence under the legislation.
Credit notes may be offered to consumers as gestures of goodwill when there is no entitlement to a refund. Any conditions as to the use of a credit note should be clearly stated to the consumer.
Read the full Sale of Goods and Supply of Services Act
You may also have to take account of recycling regulations if you sell electrical goods.Return to Guidelines for Business