Shoppers warned against online retailers with 'law-breaking' returns policies

Lucy Harley-McKeown
·4-min read
An illustrative image of a person holding a credit card while shopping on-line on a computer. On Sunday, January 3, 2021, in Dublin, Ireland. (Photo by Artur Widak/NurPhoto via Getty Images)
The retailers also offered other payment methods at the checkout, as well as letting customers pay directly with debit or credit cards. Photo: Artur Widak/NurPhoto via Getty Images

Online retailers are being called on to revamp returns policies, some of which breach consumer law in offering buy now, pay later (BNPL) schemes that put shoppers at risk of losing their money.

Research by consumer group Which? found that more than 170 online retailers, listed on Klarna, Clearpay or Laybuy’s apps or websites, that have incorrect returns or faulty goods policies on their sites.

The retailers also offered other payment methods at the checkout, as well as letting customers pay directly with debit or credit cards.

While BNPL services offer speed and convenience at the checkout, they, like debit cards, do not give consumers the same protections as those paying between £100 ($137.12) and £30,000 with credit cards.

Many of the retailers Which? looked at refused refunds on full-priced, non-faulty or sale items, offering store credit or exchanges instead.

Some of the retailers gave shoppers 14 days or less to send back an unwanted item, while others charged “restocking” or “administration” fees for making a return, which could be as high as 20% of the price of the unwanted items.

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This is contrary to the Consumer Contracts Regulations, which gives consumers the right to cancel orders for most goods bought online within 14 days of receiving the item. These rules apply to items bought in a sale or on discount too, and shoppers shouldn’t be charged to make a return.

Which?’s research also found that 36 retailers had incorrect or misleading faulty goods policies that could leave customers stuck with items that are not fit-for-purpose.

Retailers were not giving customers long enough to detect or report a fault with a product, with some asking for faults to be reported within a few days of the order being received.

This is in breach of the Consumer Rights Act, which gives you 30 days to notice a fault with a product and get a refund, repair or replacement. After 30 days, you could still be entitled to a refund, repair or replacement if the item is faulty and in some cases, a further right to reject.

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In all, Which? found 95 stores that did not offer refunds on sale items on its websites, while 74 retailers failed to give customers the minimum length of time to return orders.

17 retailers were also found not to offer any refunds to customers at all and 16 sites even charged fees for making item returns.

Which? is writing to all 170 retailers, urging them to change their policies in line with UK consumer law.

Adam French, Which? consumer rights expert said: “Many consumers could be lulled into a false sense of security by the convenience and familiarity of Buy Now, Pay Later. Online shoppers must not assume that a retailer is reliable just because it offers BNPL at the checkout.

“Given that many people’s finances are stretched now more than ever, we believe that the FCA needs to regulate the BNPL market to ensure there are more protections in place for consumers to avoid these costly situations.”

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In response to Which?, Clearpay said it carries out regular reviews of merchants websites and transaction data as well as inquiries to ensure retailers comply with consumer law. “We take the protection and safety of our customers extremely seriously and encourage users to contact our customer service immediately if they are concerned about a retailer,” it said. It also said it imposes strict contractual obligations on merchants.

“We encourage anyone to contact our customer service immediately if they are concerned about any retailer. We take immediate action if an inquiry is received. Customers can contact us at”

Klarna said it supports “regulation of the sector,” and that ‘it is vital that regulation is updated for the digital age.”

“We carefully underwrite any potential partner before any onboarding or approval is confirmed,” it continued. “We make sure to follow guidelines for best practice and to always be fully compliant with market regulations.”

Laybuy said it is “disappointed to hear that some customers have had a negative experience with a small number of retailers.”

“Laybuy offers a range of options to any customer struggling with repayments or refunds. We encourage them to submit a request in detail here, so the Laybuy team can investigate and resolve the request. We do our upmost to help our customers where we can."

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