Introduction
A “No Refund Policy” is a statement explaining to customers/consumers that a vendor or business will not refund a customer’s money for purchased goods or services that the customer returns. This policy is usually found in terms and conditions of service providers and other commercial transactions.
The “No Refund Policy” varies depending on the business. For instance, some businesses may let customers exchange the product for another one or give shopping vouchers in return. While some businesses allow refunds but with a fee, and will credit the remaining balance to the customer’s account. Others have a refund policy that is valid for a short period after purchase, especially if the product is found to be defective. While others may completely offer no compensation at all.
Reasons for Requesting for a Refund
Reasons for seeking refund are numerous and may include:
- Wrong Item: Sometimes customers receive the wrong item, color, or size, which prompts them to ask for a refund.
- Poor Quality: If the item is of poor quality or does not meet the customer’s expectations, the customer may demand a refund.
- Defective Products: If the product is faulty or not working as intended, customers will often request a refund.
- Not as Described: If the product does not match its description or photos, customers may feel misled and request for a refund.
- Changed Mind: Occasionally, customers simply change their mind about a purchase and decide to return the item.
- Service Issues: In the case of services, if the service was not delivered as promised or the quality was unsatisfactory, customers can request a refund.
- Delayed Delivery: If the product is delivered significantly late, customers might not need it anymore and ask for a refund.
- Overbilling: If customers are charged more than the advertised price, they will likely request a refund for the difference.
- Subscription Cancellations: For recurring services, customers may seek refunds if they cancel within a certain period or if they are billed after cancellation.
Despite any reason for asking for a refund businesses often include “No Refund Policy” in their terms and conditions to protect themselves against dishonest customers and to reduce the administrative cost that goes with returns. However, this practice can sometimes lead to disputes and dissatisfaction among customers who often times challenge the Policy particularly when the goods or services provided were defective or not as described.
Legal Provisions on “No Refund Policy”
It is important to state that consumers have the right to seek refunds in cases of non-performance, misrepresentation, or breach of contract by the vendor/service provider, and in other cases as prescribed by law. For instance, the Federal Competition and Consumer Protection Act 2018 (the “FCCPA”) which is the primary Legislation for consumer protection in Nigeria and applies to all undertakings and all commercial activities in or having effect within Nigeria, have various provisions that guarantees the right of a consumer to ask for a refund:
- Section 120 of the FCCPA allows consumers to cancel bookings or orders, with a reasonable cancellation fee. However, cancellation fee does not apply where cancellation is sought due to death or hospitalization of the consumer.
- Under section 122 of the Act, consumers can return defective, unsafe, or unsuitable products and get full refund for them.
- Under section 125 of the Act, consumers can request for refund if misleading or false representations are made by the service provider.
- Under section 129 of the Act, a business cannot include terms that remove consumers’ rights to return defective goods.
- In section 130, consumers have the right to timely services and can get a reasonable refund if services are not performed or goods are not supplied as agreed.
The provisions of the FCCPA as stated above establish the right of the Nigerian Consumer to seek a refund of his/her payment where the goods are found unsuitable after delivery, or where the goods do not correspond to pre-agreed descriptions or where the service provider fails to render the services according to the terms of the agreement.
The courts have also applied and enforced the above provisions of the FCCPA. In the recent cases of Patrick Chukwuma v Peace Mass Transit Limited and Edem Ewa Ekeng & Another v Wakanow.com Limited
Conclusion
From the foregoing, “No Refund Policy” in Nigeria is illegal, null and void, and any vendor or business (physical and online) that insists on no refund of money after payment is engaging in an unlawful policy in Nigeria and can be punished by law.