Section 20 subsection 16 of Consumer Rights Act 2015

[modelmad]

Hi, just a question in relation to terms and conditions for online/in person sales in England. So i'm aware that section 20 subsection 16 of the consumer rights act 2015 states that where a claim is made under the act and a refund is entitled that "If the consumer paid money under the contract, the trader must give the refund using the same means of payment as the consumer used, unless the consumer expressly agrees otherwise."

Would it be acceptable to have a condition that a consumer could pre agree to an alternate payment method? So they have to agree the terms and conditions before proceeding to order and have the option to opt out by leaving the site. Something along the lines of "By placing an order with us, as part of our terms and conditions of sale you expressly agree that in the event of any refunds resulting from a claim under the consumer rights act in respect of section 20 subsection 16 you hereby expressly agree that the refund method may not be the same means of payment originally used and agree to accept any alternate method including but not limited to cash/bank transfer/cheque/gift card/credit note etc"

The reason is i would much rather have control over how i refund someone to save myself a bit more agravation from fees and other admin issues that may arise from the payment processor i would be using as it is a one which takes a % of the transaction as a fee and only refunds the fees from card refunds if within 30 days of the original transaction so any refunds older than that would actually mean i lose out but if i could do a gift card or credit note instead it would mean i safeguard future business.

So is what i ask legal or would it be considered unfair trading if not, and any references to case studies or precedents would be appreciated to back up opinions For the record i am not yet trading but would like to get an understanding of what i can and can't do in advance and to make sure my terms and conditions are accurate and legal too.

Many thanks for your help!

[R0b]

You can have whatever you want in your contract, but doesn't mean it is enforceable on the consumer.

Suggest you have a read at s.31(1) and (2) of the CRA. Contracting out is not binding on consumers.

https://www.legislation.gov.uk/ukpga/2015/15/section/31

[modelmad]

So no then

[R0b]

The long and short of it, correct. Consumers can choose not to exercise a particular right, but obtaining a waiver would not be binding. Could you not simply increase the prices you charge to cover the cost of what you might incur as a result of refunds?

[modelmad]

Possibly but limited by supplier dictated RRP costs and to be competitive on pricing and shipping costs doesn't leave much wiggle room but i will just have to do a few periods of test and learn and see what works out and what doesn't work out and adjust and adapt accordingly

[Manxman]

In the event of somebody becoming eligible for a refund, can't you just ask them if they would agree to the refund being made by whichever method is cheapest for you at the time? Yes - they are entitled to a refund by the same means by which they paid, but they can agree to another method. I'm sure some customers would happily agree.

Alternatively, try to ensure your customers don't need a refund in the first place or, as suggested above, build the cost into your pricing model.