Vivacity said they could because it was not received, despite the buyer producing proof of postage. Vivacity also said that as the buyer used a deals site voucher code, normal cancellation rules didn’t apply. Rosanna Foster reports on whether the ASA was persuaded by Vivacity’s arguments.
Topic: Distance selling
Who: Advertising Standards Authority ("ASA"); Vivacity Stores Ltd ("Vivacity")
When: 7 November 2012
Law states as at: 29 November 12
The ASA has found that Vivacity breached the CAP Code provisions on Distance Selling following complaints from a customer who did not receive a refund for a watch which had been sent back.
Vivacity is an online retailer based in the UK. A customer who had purchased a watch from Vivacity complained to the ASA when they did not receive a refund after returning the item. The customer challenged whether Vivacity was in breach of the provisions of the CAP Code dealing with Distance Selling, specifically:
- Rule 9.5.3 which requires marketers to refund money to consumers promptly (and at least within 30 days of a notice of cancellation) if the consumer cancels within seven clear working days after delivery; and
- Rule 9.5.5 which requires marketers to refund money to consumers who have returned products even if those products are not received back as long as the consumer can produce proof of posting.
The CAP Code provisions on Distance Selling complement the provisions of the Consumer Protection (Distance Selling) Regulations 2000 as subsequently amended (the "Regulations") and do not replace them.
Vivacity said that they had not received the watch back from the customer, and that the proof of postage which the customer had produced did not prove that it had been received by them. The tracking service which Vivacity recommended that customers use for returns had not been used and without having received the watch Vivacity had had no opportunity to check that it was intact which it would normally do before issuing a refund.
Notwithstanding the foregoing, Vivacity said that the customer had paid using a voucher code from a deals website which meant under its terms that a shorter cancellation period of three days applied. Additionally, according to Vivacity, in other cases refunds were performed by the deals website company, with the precise mechanics determined by the agreement between Vivacity and the deals website company. Vivacity therefore queried whether the company behind the deals website might be responsible for giving the refund rather than Vivacity.
Notwithstanding its arguments however, for the purposes of good customer relations, Vivacity told the ASA that it now intended to provide the customer with a refund.
The ASA decided that under the CAP Code it was Vivacity as the seller of the watch, and not the deals website company, which was responsible for providing a refund. However, given that vouchers were used to purchase a product it would be acceptable if the refund was in the form of a voucher code.
The ASA also found that despite Vivacity's requirement to use a tracking service, the customer had in this case produced proof of postage and so Vivacity were required under the Code to provide a refund even if the if products were not received back.
Further, although Vivacity had attempted to shorten the cancellation period from seven to three days, the ASA considered that a marketer could not do this as "the seven-day cancellation period, which existed to give customers an adequate cooling-off period…was an unconditional requirement of the Code".
Vivacity were found to be in breach of rules 9.5.3 and 9.5.5.
Why this matters:
This adjudication raises a number of useful points for those selling goods at a distance. Firstly, it acts as a reminder of the CAP Code requirement to refund a customer, even where the product is not received back, if a customer cancels the contract within seven working days and provides proof of postage. As this case demonstrates however, although a marketer may recommend that a customer uses a certain postage service to return a product, proof of postage does not have to show that this recommendation has been followed.
The ASA decision is especially noteworthy for those with relationships with deal websites, as it clarifies that where vouchers for a website have been sold via a deal website, the marketer still remains responsible for refunds under the CAP Code.
Although there is no clear legal authority on the point, the position is probably the same under the Regulations.
There are also specific lessons regarding vouchers. The ASA found that payment by vouchers does not provide any legitimate basis for arguing that the standard (and statutory) seven day cancellation period should be reduced, and in fact the ASA was very clear about the importance of the seven day cancellation period. Customers can however be offered refunds in the form of vouchers when they have been used to pay.