EXECUTIVE SUMMARY
It is a fact that e-commerce has revolutionized business transactions by leveraging technology and the internet, enabling broader and streamlined customer access and interactions. This shift which spawned a surge in online marketplaces, nonetheless still adopts conventional business practices with the inclusion of terms, both express and implied, to govern transactions. In Nigeria, a prevalent term often seen in receipts or other documentary proofs of payment is "Goods sold in good condition cannot be returned or refunded." More sophisticated organizations encapsulate this in a formal Return Policy to inform customers of their stance on returns and refunds.
It is on this premise that this article discusses the legality of such "no returns, no refunds" policies in the context of Nigerian consumer protection law.
INTRODUCTION
*Madeline (not her real name) was excited to receive her pair of beautiful white sneakers which matched with the pair her husband *Benjamin (not his real name) got for their Valentine's getaway trip. While excitedly trying on her gorgeous pair in the bathroom of the executive suite of the five (5) star hotel where they lodged, she discovered a shocking problem in paradise: Neither sneaker foot fit her feet!
Quickly, Benjamin called and sent direct messages to the online vendor he bought the undersized sneakers from; requesting a replacement or a full refund, in hopes of comforting his beautiful Madeline who was now upset that her dreams of a photo shoot by the clear blue sea around the hotel, in matching outfits and footwear, were about to be ruined, all to no avail.
Several calls and messages later, the vendor responds the following week with this text: “PLEASE REFER TO REFUND POLICY ON OUR WEBSITE WHICH SPECIFICALLY STATES THAT THERE SHALL BE NO REFUND OR RETURNS FOR ITEMS SOLD IN GOOD CONDITION”, At this point, Benjamin and Madeline are stunned and confused, especially after confirming this policy on the vendor’s website and like many customers are on the brink of resigning to their fate.
This scenario is not uncommon with business transactions (online and offline) in Nigeria and a good number of buyers find themselves in circumstances like this so it begs the question: “What can they do when faced with this situation?”
PRELIMINARIES
To get the appropriate context for this conversation, a few questions may arise:
What is a Refund and Return Policy? A Return and Refund Policy is a statement that describes a business's process, policies and requirements for accepting returns.[1] or making refunds to their customers.
Why are such policies used? Retailers usually make use of "no refund/return" policies to reduce costs and risks associated with returns, as some sellers argue returns can be exploited by dishonest buyers at the company's expense and where such instances of returns are on the rise, it may cast a negative light on the business therefore occasioning reputational damage and loss of business.
Is there a standard format for such? A “No refund policy” or clause varies between vendors. Some allow exchanging the purchased item for a similar product while others refuse any returns or exchanges under a strict "no refunds" rule. Some others may permit cancellations for a fee while refunding the remaining prepaid balance while in other cases, refunds are made for defective goods within a short window after purchase.
It is pertinent at this juncture to consider the position of Nigerian Law as it relates to this practice to ascertain if there are reliefs available to customers like Madeline and Benjamin following their ordeal.
THE REGIME OF CONSUMER PROTECTION LAW IN NIGERIA
The good news is that the predicament of our fictional couple is not without a remedy under Nigerian Law as they can seek redress primarily under Nigeria’s principal legislation on competition and consumer protection, which is a Federal law applicable in all states of the Federation, known as the Federal Competition and Consumer Protection Act (FCCPA) 2018.
Before the enactment of the FCCPA, the Consumer Protection Act [2] was the primary legislation on consumer protection in Nigeria which, amongst other things, established a Council “to provide speedy redress to consumers' complaints through negotiation, mediation and conciliation.”[3]
However, as the awareness of the importance of providing a more robust protection of consumer rights grew, it became evident that the existing Act needed to expand its scope of operations and be more efficient in line with modern approaches of Consumerism - a vibrant movement for the protection of the consumer against useless, inferior, or dangerous products, misleading advertising, unfair pricing, etc.[4]
This led to the repealing of the Consumer Protection Act and the enactment of the Federal Competition and Consumer Protection Act in 2018 as the supreme legislation on matters of competition and consumer protection in Nigeria, to the exclusion of any other law on such matters[5].
The FCCPA, has among its objectives, to protect and promote the interests and welfare of consumers by providing consumers with wider variety of quality products at competitive prices, and prohibit restrictive or unfair business practices which prevent, restrict, or distort competition or constitute an abuse of a dominant position of market power in Nigeria [6]. These objectives it achieves through the establishment of the Federal Competition and Consumer Protection Commission (FCCPC) [7] and the Competition and Consumer Protection Tribunal (CCPT) [8]
On the specific consumer rights protected under the FCCPA, Part XV of the Act which comprises Sections 114-131 provides for the following:
Right to be given information in a plain and understandable language;
Disclosure of the prices of goods and services;
Disclosure of second hand or reconditioned goods;
Right to sales records;
Right to select suppliers
Right to adequate trade description and to have products labelled;
Right to cancel reservations, bookings or orders made in advance;
Right to choose or examine goods;
Right to return goods;
General standards for marketing of goods and services;
Right to fair dealings;
Right against goods with false, misleading, and deceptive representations;
Representation test and publication testimonials;
Rights against unfair, unreasonable or unjust contract terms;
Notice required for certain terms and conditions;
Prohibited Transactions, agreements, terms or conditions
Rights pertaining to the quality and safety of goods and services;
Right to safe, good quality goods.
The essence of these rights under the FCCPA is to create a legal, protective ambit within which customers as consumers can hold vendors and service providers accountable and ensure there is greater satisfaction and value for the goods or services paid for by them.
Consequently, given the provisions of Sections 122 (Consumers right to return goods) and 129(1)(b)(1) (Prohibited Transactions, agreements, terms or conditions) of the FCCPA, it is safe to conclude that Madeline and Benjamin have a justiciable right to return the undersized sneakers and request a refund of the full price paid by them to the vendor within a reasonable period [9], as the Refund Policy on the online vendor’s website violates these express provisions of the FCCPA and is therefore, illegal, null and void.[10]
Additionally, where the online vendor is unwilling or uncooperative to their demands, Madeline and Benjamin can thereafter explore any of the following options:
Approach the regulators of the online vendor, if such vendor operates within the organised sector [11] for redress;
Approach the FCCPC by filing a complaint before it outlining the violation/breach and providing supporting documents to that effect.[12] It is noteworthy to state that where any party is aggrieved with the decision of the FCCPC, it may apply to the Competition and Consumer Protection Tribunal (CCPT). Following the decision of the CCPT, if either party is still aggrieved, it may within 30 days of the judgment/order/decision of the CCPT appeal to the Court of Appeal for Judicial Review;[13]
Seek relief before a court of competent jurisdiction, in addition to any redress the FCCPC may impose.
Notwithstanding the obvious position of the FCCPA vis-a-vis Refund Policies in commercial contracts in Nigeria, there may be instances where it might be difficult or impracticable to refund a consumer who is dissatisfied with a purchase or service, such as:
Where the product was not returned to the vendor within a reasonable period after being found unsuitable by the consumer;
where a product or service has been customized or personalized to meet the specific needs or preferences of the customer,
where the product or service is a digital product, such as software or a downloadable file, it may be difficult to verify whether the product has been used or copied;
where the customer has used the product or service in an unauthorized manner or has abused it, then the seller or vendor may have grounds to refuse a refund upon return of such product;
where the product or service is perishable or time-sensitive. In this instance, the product or service may be said to be already utilised by the customer, making it difficult to return the product in its original form and as purchased.[14]
RECOMMENDATION
The FCCPC should organise periodic awareness campaigns to educate members of the public about these specific rights and the available mechanisms for remedying violations of these rights by unscrupulous vendors.
There should be in place practice directions and the establishment of specialized courts to aid the accelerated hearing of consumer rights violation cases in courts of competent jurisdiction to encourage victims of such actions to approach the judicial system with the assurance of speedy dispensation of justice.
The FCCPC should foster dialogue between policymakers, stakeholders in the e-commerce industry and consumer groups to address gaps that may exist as matters of consumer protection in business transactions continue to evolve.
CONCLUSION
It is apparent that the Federal Competition and Consumer Protection Act (FCCPA) 2018 has advanced the frontiers of consumer rights protection beyond the province of merchantability of goods and services to the suitability and fitness for purpose which is one of the major cornerstones of Consumerism globally. By proscribing no refund policies in the main, vendors, online and offline, will be held to a higher standard of customer service and consumer satisfaction, which will in turn strengthen brand reputation and inspire more confidence in consumers who patronise their organisations regardless of the platform.
REFERENCES
https://www.termsfeed.com/blog/sample-return-policy-ecommerce-stores/ accessed 13th February 2024
CAP C25 LFN 2004
Ibid, Section 2
https://www.dictionary.com/browse/consumerism accessed 13th February 2024
Section 104, FCCPA 2018
Ibid, Section 1 (c) and (d)
Ibid, Section 3
Ibid, Section 39
Ibid, Sections 122 (a) and 146 (a) FCCPA 2018
Ibid, Section 129
Ibid, Sections 146 (b) and 147
Ibid, Sections 146 (c) and 148
Ibid, Sections 38, 47 and 55 of the FCCPA
https://www.mondaq.com/nigeria/dodd-frank-consumer-protection-act/1305004/the-legality-of-no-refund-policies-adopted-by-online-vendors-in-nigeria accessed 13th February 2024