What Are Your Legal Rights as a Shopper?

In this episode we’ll discuss legal remedies for unhappy shoppers. A lot of our material is derived from, “Nolo’s Encyclopedia of Everyday Law,” written by Shae Irving, and the Nolo editors. Okay, let’s start with a typical consumer question:

QUESTION: I don’t like a lamp that I purchased. There’s nothing wrong with it; I just don’t like it. Do I have the right to a cash refund?”

ANSWER: Many merchants will refund your money or reverse your credit card charges, but they’re doing it because it’s their policy, not the law. Nolo, for example, the sponsor of this podcast, has a “no questions asked” return policy – if you don’t like a book, you can return it for a cash refund. But a seller is not legally required to make a cash refund. A seller may be required to make an exchange for merchandise that is defective or does not perform as advertised. These are requirements that occur because of laws about warranties – implied and expressed warranties. We’ll talk about those in a few minutes. But it’s important to remember that a merchant doesn’t have to make a cash refund to a consumer. There are rules in four states however:

In California, sellers who do not allow a full cash or credit refund within seven days of purchase have to post the store’s refund credit policy. If the seller fails to post the policy, you can return the goods for a full refund within thirty days of your purchase.
In Florida, if the seller has a no-refund policy, such a statement must be posted in a store. If a no-refund policy isn’t posted, you may return unused goods in the original packaging within seven days for a full refund.
In New York, sellers with a no-refund policy have to post it. If a seller does not post the policy, you’re entitled to a choice of cash or credit refund within twenty days if goods are not used or damaged.
In Virginia, sellers must post the refund or exchange policies, unless they give a full cash refund or a full credit within twenty days after purchase.

QUESTION: What does a warranty mean? Does every new product come with a warranty?”

ANSWER: The main thing to remember about warranties is that they’re based on common sense. A contract for a sale is based on a principle that merchandise will perform either as commonly expected – for example, that a lamp will work, or that a product will be sold as advertised. For example, if it says that batteries are included, then you expect that batteries will be included. These guarantees are part of the sale. So, a warranty is just an assurance about the quality or performance of the product or service. The most common warranty is the implied warranty of merchant’s ability. It’s a part of every consumer transaction that you will make. What that means is that a product or service will perform as expected for its basic purpose. So, if you buy a juicer that can’t perform it’s basic purpose, that is, it can’t make juice, then the seller broke the implied warranty, and the seller owes you a replacement juicer that will make juice. For used items, there’s also a warranty of merchant ability, and that’s a promise that the product will work as expected given its age and condition. So, for example, a ten-year-old used juicer may not look or work as well as a new one considering its condition and age. There’s a second implied warranty, and that’s the implied warranty of fitness. That means that if you and the seller communicated a specific or an unusual purpose when you purchased the item, then it’s expected that the item can perform for that unusual or specific purpose. So, for example, if you purchased a juicer and indicated to the seller that you wanted a juicer that could both do citrus fruits and carrots and apples, and the juicer could only do carrots and apples, then there’s a breach of the warranty of fitness for a particular purpose. Those are the two implied warranties that exist in all states for purchases of new and used items. There’s also an expressed warranty, and that’s a warranty that’s specifically stated, usually in writing. So, for example, the juicer may come with a warranty that says, “This juicer is warranted against defects and materials or workmanship for ninety days.” So, if there was a breakdown in parts, the manufacturer would have to replace those parts, to honor the expressed warranty. An expressed warranty can also be an advertisement, or even a sign in the store -- for example, a statement that all dresses are 100% silk. An expressed warranty lasts for the period of time stated in the warranty, for example, three years after the date of purchase, and in most states, an implied warranty lasts as long as the product can be used for its intended purpose. In a few states, however, if there’s an expressed warranty, the implied warranty lasts only as long as the expressed warranty that comes with the product. In some states, if there is no expressed or written warranty, a seller can sometimes avoid an implied warranty by selling the item “as is.” There are other states that prohibit all as-is sales, but in all states, the buyer must know that the item is sold as-is in order for the seller to avoid any implied warranty.

QUESTION: What good does a warranty do me if I purchase a defective item?”

ANSWER: Since most of the time a defect is going to show up immediately, you can ask the seller or the manufacturer to fix or replace the item. If the seller won’t, or tries only once and the fixed or replaced item is still defective, you can withhold payment or inform a credit card company that the charge is disputed. If you’re uncomfortable doing this, or have already paid for the item, call the seller and try to work out an arrangement. If the seller refuses, you can try to mediate the dispute through a community or better business bureau mediation program, or else you’re going to have to sue, usually in small claims court. Nolo has an excellent book on dealing with small claims court, Everybody’s Guide to Small Claims Court, but it’s best if you can sort out your dispute without resorting to small claims court, since the process can be time-consuming, and sometimes requires chasing the merchant further, even if you win. If the seller or manufacturer won’t make good under a warranty, you must sue within one to four years of when you discovered the defect, depending on your state’s laws.

QUESTION: What happens if my juicer works fine for the one-year written warranty period, but then breaks the day after the warranty period ends?

ANSWER: If there’s an expressed warranty and it’s expired, you usually don’t have any recourse. However, in some states, if the item gave you some trouble while it was under warranty, and you had it repaired by someone authorized by the manufacturer, the manufacturer must extend your original warranty for the amount of time the item sat in the shop. If you think you’re entitled to this type of extension, call the manufacturer, and ask to speak to the department that handles warranties. Also, keep in mind that you have some other options – if your item was trouble-free during the warranty period, the manufacturer may offer a free repair for a problem that arose after the warranty expired, if the problem is widespread. Many manufacturers have secret “fix-it” lists – items with defects that don’t affect safety, and therefore don’t require a recall, but that the manufacturer will still repair for free. It can’t hurt to call and ask.

QUESTION: What about an extended warranty? Should I buy one?

ANSWER: Probably not. Merchants encourage you to buy extended warranties, also called service contracts, because they are a source of big profits for stores, which usually pocket up to 50% of the amount that you pay. It’s rare that you have the chance to exercise your rights under an extended warranty. Name-band electronic equipment and appliances usually don’t break down during the first few years, and if they do, they’re usually covered by the original warranty.

QUESTION: I received some unordered merchandise in the mail, and now I’m getting billed. Do I have to pay?

ANSWER: No, you don’t. You don’t owe any money if you receive an item you never ordered; it’s considered a gift. If you get bills or collection letters from a seller who sent you something you never ordered, write to the seller stating your intention to treat the item as a gift. If the bills continue, insist that the seller send you proof of your order. If this doesn’t stop the bills, notify the state Consumer Protection Agency in the state where the merchant is located. If you sent for something in response to an advertisement claiming a free gift or trial period but are now being billed, be sure to read the fine print of the ad. It may say something about charging shipping and handling, or worse, you may have inadvertently joined a club or subscribed to a magazine. Write the seller, cancel your membership or subscription, offer to return the merchandise, and state that you believe the ad was misleading.

QUESTION: I just signed a contract to have carpet installed in my house, but I’ve changed my mind. Can I cancel?

ANSWER: Under the federal trade commission’s cooling off rule, you have until midnight of the third day – not including Sundays and federal holidays – after a contract was signed to cancel either of the following: one, door-to-door sales contracts for more than $25, or two, a contract for more than $25 made anywhere other than the seller’s normal place of business. For example, a sales presentation at a hotel or restaurant, an outdoor exhibit, a computer or trades show, with two exceptions: public auctions and craft fairs are excluded. This cooling off period also does not apply to contracts to buy a car, truck, van, or camper. If your dealer says otherwise, that is, if the dealer is promising you a cooling off period, be sure to get it in writing.

QUESTION: What other types of contracts can I cancel?

ANSWER: The Federal Truth and Lending Act lets you cancel some loans up until midnight of the third day – not including Sundays or federal holidays – after you sign the loan contract. It applies only to loans for which you pledged your home as security, as long as the loan is not a first mortgage. In addition, many states have laws that allow you to cancel written contracts covering the purchase of certain goods or services within a few days of signing. These usually include contracts for dance, or martial arts lessons, credit repair services, health club memberships, dating services, weight loss programs, time-share properties, and hearing aides. In a few states, you can also cancel a contract if you negotiated the transaction in a language other than English, but the seller did not give you a copy of the contract in that language. Call your state Consumer Protection Agency to find out what contracts, if any, are covered in your state.

QUESTION: I ordered some clothing online, and there’s a delay in the shipping. Can I cancel my order?

ANSWER: With the exception of photo development services, magazine subscriptions, and the ordering of seeds or plants, if you order something online, or by mail, phone, or fax, the Federal Trade Commission’s mail or telephone order rule requires that the seller ship to you within the time promised or, if no time was stated, within thirty days. If the seller cannot ship within that time period, the seller must send you a notice with a new shipping date, and offer you the option of canceling the order and getting a refund or accepting the new date. After you receive this first notice, you have to contact the seller to cancel. If you don’t, you’ll be considered to have consented to the delay.

QUESTION: I purchased a defective item using my credit card. Can I request that the credit card company reverse the charges?”

ANSWER: Under federal law, you must first attempt in good faith to resolve the dispute with the merchant. If that doesn’t work, the credit card company is required under the law to begin a dispute resolution process, during which time the charges are temporarily reversed, pending the outcome. Now, your ability to use this law depends on several variables, including whether the merchant is within your state, or within 100 miles of your home, or whether you are using a seller’s card, for example a JC Penny’s card to buy at JC Penny’s, and the extent of the proof that you can furnish to demonstrate that the product or service is defective. Check with your credit card company, because many companies provide better dispute resolutions procedures than guaranteed by this law, and in general, it’s much more satisfying than dealing with small claims court, because if you win, the charge is permanently reversed; you don’t have to chase the merchant to enforce the judgment. But, like small claims court, it still requires time and preparation, and for small consumer disputes, say, for example, for matters between $50 and $100, you may spend more time preparing your case for the credit card dispute resolution procedure than you’ll be getting back. That said, it’s still one of the better forms of consumer protection when making purchases.