(Guest Columnist Atty. Tim Burns, Nov. 29, 2013)
It’s November and for many people that ushers in the start of the Holiday shopping season. As you are hitting the stores and shopping on the Internet it’s important to be proactive in knowing your legal rights so that your gift giving experiences are filled with merriment versus heartache. It is so much easier to avoid problems by looking out to avoid problems rather than losing money and time trying to resolve a complaint or dispute later on. Here are a few tips to keep in mind:
RETURN & EXCHANGE POLICIES:
If a store has a posted return and exchange policy it is legally bound to adhere to those publicized terms and conditions. Ask about a store’s policies before you buy because otherwise stores are NOT required to make refunds, take returns, or offer exchanges even if you have a receipt. There are two exceptions when a store is REQUIRED to allow a customer to make a return and that is if the seller (1) misrepresented the item or (2) the item was defective at the time of purchase. For example if a store represented it was selling you a toy car and when you opened the box at home it had a toy boat in it instead that is a misrepresentation. Another example is buying a remote control car for your child that’s missing the remote control – obviously that is defective.
Store return and exchange policies can often be a thorny issue with consumers so make sure to give “gift” receipts to help your friends and family who may consider returning your present, with or without your knowledge, to help facilitate the process for both them and the store. Receipts are also important to have and keep for warranty service on items.
The gift cards you purchase this holiday season cannot expire within five years of purchase. Under the law, a retailer or financial institution that issues a gift card cannot refuse to accept it “for personal, family, or household use” if you present the card within five years of purchase or after adding value to the card. An example of adding value is being given a $5 Starbucks Card and after spending $3.99 of it you add another $5 to bring the total on the gift card to $6.01.
The gift card expiration laws are relatively new, 2009 for merchants and 2010 for financial institutions, so pay attention to expiration dates for gift cards you may already have from past years. Of course most people have some friend or family member that likes to re-gift presents so just because you receive a gift card this year doesn’t mean you shouldn’t necessarily pay attention to the expiration date on it either. Expiration dates can be longer than 5 years they just can’t be shorter.
Merchants cannot charge inactivity fees or other service fees that are deducted from the value of a gift card, but it is important to note that rule only applies for the first year after purchase when it comes to gift cards issued by financial institutions like banks and credit card companies. Merchants and financial institutions cannot deduct from the value of a gift card to sell it to you but they can charge a purchase fee for selling it. So your local bank can’t charge you $5 by selling a $25 American Express gift card worth only $20, but they can charge you $30 for one worth $25. So if you buy a $25 gift card the value on it when you receive it should be $25.
ITEM PRICING LAW:
The State Legislature changed Michigan’s Item Pricing Law in 2011 so individual items at stores no longer are required to have a price tag on them. Under the new law, rather than being placed on specific items a price may now be displayed by signage, electronic reader, or any other method that clearly conveys the price to a consumer when in the store at the place where the item is located. So buyers beware and check your receipts.
Under Michigan law if you are overcharged by a retailer for misrepresenting the price of an item through placing it next to the wrong display sign or through a scanner error at the register than there are penalties that benefit consumers. If you have been overcharges, notify the merchant within 30 days of the transaction, either in person or in by writing to them. Within 2 days of receiving your notice the seller may refund you the difference between the amount charged and price advertised plus a “bonus” of ten times the difference, with a minimum of $1 and a maximum of $5. If the seller doesn’t pay up with both a refund for the difference and the bonus, the buyer can bring a lawsuit to recover actual damages or $250, whichever is greater, plus reasonable attorney fees up to $300. For these protections to apply, a transaction has to be completed so if a cashier catches the error or problem and fixes it before you pay and leave the register than you don’t have a claim. Also you need to have a receipt showing the item purchased and the identifying the price you paid.
What protections do you have if shopping online or by catalog to know that your gift will be delivered in time? Under the Federal Trade Commission’s “Prompt Delivery Rule”, a business must either state or delivery timeline or complete shipping within 30 days of a purchase. If a merchant can’t deliver either within the promised time or 30 days, it must provide a revised shipping date and explain the customer has a right to cancel the order and get a prompt full refund. Note though that a customer’s silence is considered an agreement to these delays. If though the shipper needs more than 30 days or the delay will be indefinite, they need to get the customer’s written or verbal consent to the delay or must issue a prompt refund. Also if the shipper notifies a costumer of a second delay, and for any additional delays after the second one, the customer must give verbal on written consent on each subsequent delay or have the order cancelled and be provided a refund.
I hope everyone has an enjoyable Holiday Season and encourage everyone to be smart and safe when shopping to help ensure that these times are memorable for you and your family for the right reasons and not impaired by negative situations that could have been avoided with a little advance preparation or insight.
Tim Burns is a private practice attorney who focuses on probate law, estate planning, consumer issues, small business representation, and criminal defense (www.attorneytimburns.com). Prior to starting his own law firm, Tim spent a decade as a consumer advocate with the Better Business Bureau. He is a graduate of the University of Detroit/Mercy School of Law