What you need to know about merchandise returns


Tis the season of many happy returns, but it might surprise you to learn that retailers are not, generally speaking, legally required to accept returned merchandise. But while there is no blanket federal law governing returns, there are state consumer protection laws, which regulate such matters as posting return policies and cancellation periods for certain purchases.

Posted policies

While a retailer doesn’t have to accept returns, many, if not most, do. That said, return policies can vary greatly. State governments recognize the confusion this can cause for consumers and have drafted laws to help. For example, in California, Civil Code section 1723 requires retailers to prominently post their return policy if it doesn’t conform to two basic assumptions:

  • The retail seller gives a full cash or credit refund, an equal exchange, or some combination of these
  • The customer may return the merchandise for at least seven days following purchase, if it is returned with proof of purchase

The California law does make exceptions for items that normally can’t be returned (such as plants, food, or other perishable goods) or merchandise clearly marked “as-is” or “final sale.”

Florida and Maryland have similar posting requirement laws.

Returning big ticket, high-pressure items

In terms of outlay and/or sales tactics, buying a car or a gym membership can be a lot different than buying a sweater. Protections here also vary by state and by product.

Unless you’ve been sold a verifiable lemon, don’t count on being able to return a new car. Used car buyers, however, have somewhat better protections. In California, for example, used car dealers are required to offer buyers the option to cancel the contract (for a fee) within two days.

Gym memberships and door-to-door sales are other areas where consumers have some built-in legal protections. Most states have cancellation periods (typically three to five days) during which buyers can cancel the contract without obligation. In addition, the federal cooling-off rule gives consumers three days to cancel door-to-door sales, which the rule defines as sales “made at your home, workplace or dormitory, or at a seller’s temporary location, like a hotel or motel room, convention center, fairground, or restaurant.” These no-obligation cancellation periods are intended to counteract often high-pressure sales tactics.

Best practices for retailers

Aside from observing the legal requirements, most retailers follow practices that recognize the value of offering generous return policies. They realize that in today’s competitive consumer market, easy returns and refunds can build brand loyalty and enhance the company’s reputation. Retailers like Nordstrom and LL Bean are famous for accepting returns on everything from snow tires to a dead man’s shoes. The National Retail Federation (NRF) identified transparency of return policies among its trends for the 2017 holiday shopping season. The NRF claims that “three of four holiday shoppers checked return policies before making a purchase last season, and 22 percent ultimately backed out of a holiday purchase due to an inconvenient return policy.”

Statistics like those, and the scrutiny of lawmakers, reinforce just how important return policies are to the parties on both sides of the cash register.