February 16, 2012
Restocking fees
Dear Consumer Ed:
I purchased four speakers for my husband and paid $911.60 for them. At the time of purchase the store owner told me the item was not in stock and that it would be 1-2 weeks before the product would arrive from the manufacturer. I paid for the product in full. It has been 3 weeks now and I still have not received the speakers. The store cannot give me a definitive date as to when they will be in. I contacted the manufacturer to see if they could tell me when they shipped the items to the store, and they said that the store never placed an order with them for the items. I asked the store to refund my money so I can purchase the items elsewhere. The store is willing to give me my money back minus a 20% restocking fee. Is it legal for them to take $182.32 from me for restocking an item even though the company never placed an order for the item?
Consumer Ed says:
In Georgia, retailers are allowed to set their own policies regarding refunds and exchanges, including those related to “restocking fees”. Restocking fees have become increasingly common in today’s market, particularly when a return involves an electronics purchase. However, while the collection of these fees is permissible, there may be circumstances where a retailer should not enforce such a fee, or circumstances where charging it would be unfair or even deceptive.
First, the retailer should adequately disclose the existence of these charges before the purchase becomes final (this requirement is not met by retailers who print their return policies on the back of their receipts, which are issued after a purchase is made). Second, with regard to the delay in delivery, if delivery cannot be made within a reasonable time of the promised date, federal law requires the seller to give timely notice of the delay, giving the consumer the option to cancel and receive a full refund. In states that do have laws addressing re-stocking fees, it’s illegal to charge them in the following situations: They are being charged in connection with the return of defective merchandise; they are being charged because the retailer delivered the wrong merchandise; they are being charged because the retailer failed to deliver the merchandise within the promised time period; they exceed 50% of the purchase price of the merchandise; or the restocking fees are not adequately disclosed to the customer.
Finally, a “re-stocking” fee implies, by its very name, a fee imposed to cover costs associated with placing merchandise back into the store’s stock. You don’t say whether you had any advance notice of your retailer’s restocking/cancellation policies. However, if you can show that the store owner not only failed to deliver your order when initially promised, then failed to give you a specific delivery date, but also never placed an order with the manufacturer, there doesn’t appear to be a reasonable basis for the retailer to have charged you a restocking fee. A restocking fee in such a situation may violate Georgia’s Fair Business Practices Act.
In a situation where the store owner may be charging unfair restocking fees, there are several options. First, you should try to get written corroboration from the manufacturer confirming that the store owner never placed the order. You can then try to dispute the charge with your credit card company, and submit this corroboration with your dispute. You could also submit a complaint to the Better Business Bureau to see if they can help mediate the situation between you and the retailer. Finally, you can submit a complaint to the Federal Trade Commission at www.ftc.gov or to the Georgia Attorney General's Consumer Protection Division by calling 404-651-8600 or 1-800-869-1123.