If you have ever returned an item to a retailer, you probably know that many charge various fees on returned items. In particular, certain retailers are now charging their customers a 10% or 15% "restocking fee" when merchandise is returned in an opened box or without all of the purchase’s original packaging and accessories. Other retailers are charging a "restocking fee" even when the item is returned unopened or unused.
Consumer groups and websites devoted to airing consumer complaints have pointed out that restocking fees and the terms under which they are imposed are not adequately disclosed, and consumers who return certain items are not given the opportunity to make an informed purchasing decision. Moreover, because restocking fees are imposed uniformly as a percentage of the purchase price and without regard to the actual costs of actually "restocking" the merchandise, consumer watchdog groups believe that the practice of imposing restocking fees is deceptive and intended to create an additional source of revenue for retailers.
Retailers respond that the vast majority of fees are imposed upon items that have been returned in opened boxes. The retailers claim that once the boxes are opened the store can no longer sell the item as "brand new" and must therefore re-sell the merchandise at a deep discount. Retailers also claim that a restocking fee is needed to cover penalties imposed on the store by manufacturers.
Consumers reply that the price of doing business as a retailer has always included the possibility that customers would return certain products. Indeed, Walmart – the country’s largest retailer – does not charge restocking fees. In fact, most retailers in the U.S. don’t charge any fees at all when a customer decides to return a product.
Whether or not restocking fees are being charged for legitimate reasons, it is commonly agreed that they are costing consumers tens of millions of dollars each year. As such, many states have rules regarding how customers must be notified about the fees. For example, in New York and California customers must be made aware of restocking fees prior to making their purchase. Retailers who print their return policies on the back of their receipts -- which are then issued after a purchase is made – can be found to be deceiving consumers.
In 2005, the New York City Department of Consumer Affairs charged seven retailers a total of $4,250 for failing to properly disclose their restocking fee. The companies charged were American Design Furniture, Best Buy, Best C&N Furniture, Bombay Company, Futon Warehouse, and Sharper Image.
Also in 2005, a report issued by the Public Advocate for the City of New York found that 44 percent of stores surveyed charged restocking fees, and, of those, 27 percent did not post conspicuous signs to let consumers know about their policy.
Companies that violate consumer protection statutes, including those that are deemed to encompass retail returns and the imposition of restocking fees, may be compelled to pay consumers actual damages, punitive damages and attorneys’ fees.
If you have been unfairly or unreasonably charged a restocking fee, contact us to discuss your options.
