Major UK Retailers Accused of Breaking Refund Rules After Returns Investigation

By Benson Daniel

Several major UK retailers have been accused of breaking consumer protection rules by failing to provide customers with refunds they are legally entitled to after returning unwanted online purchases.

An investigation involving mystery shoppers found problems with refunds for both returned goods and the original delivery charges, leaving some customers out of pocket.

The investigation involved 12 shoppers who purchased more than 200 items from 17 major online retailers across Great Britain during June and July. The shoppers returned the purchases by post and monitored the process from the initial return through to the refunds they received.

Matalan recorded some of the weakest results. The retailer refunded the cost of returned goods to only seven of the 12 mystery shoppers, while none of the shoppers received a refund for the original delivery charge.

In one case, a customer returned an item costing £3.99 after paying £3 for delivery and another £2.99 for the return. Because the refund was not received, the customer was left almost £10 out of pocket despite being legally required to bear only the cost of returning the item.

River Island and Sports Direct also failed to reimburse the original standard delivery charge in any of the cases tested.

Under the UK’s Consumer Contracts Regulations, customers who cancel an eligible online purchase within the statutory period are generally entitled to a refund for the goods and the standard delivery charge. Retailers can require customers to pay the cost of returning unwanted goods, but they cannot normally withhold the original standard delivery fee.

Retailers are generally required to issue refunds within 14 days of receiving returned goods, although certain products, including some personalised items and goods with hygiene seals, are subject to exemptions.

The investigation also found problems at Pets at Home, which refunded the cost of returned products to only six of the 12 mystery shoppers involved.

The findings have raised concerns about whether some of Britain’s largest retailers are properly complying with consumer protection requirements and whether customers are being forced to absorb costs that should be covered by retailers.

The investigation found significant differences between retailers. John Lewis performed strongly, with shoppers praising its communication throughout the returns process. It subsequently became the first retailer to receive a new recommended provider status for returns.

Some major retailers were not included in the postal-return testing because of their existing return arrangements. M&S, for example, did not offer postal returns for certain online purchases below £10 made by guest customers, while Argos did not offer postal returns.

The findings are likely to increase pressure on retailers to review their refund systems and ensure customers receive money owed to them when they exercise their legal right to cancel online purchases.

For consumers, the investigation highlights the importance of checking refund amounts and delivery charges after returning unwanted goods, particularly where retailers charge separate fees for returns.