Cancelled Order -- Seller Demanding 50% Restocking Fee

So I ordered and paid for a mattress. They placed an order.

The very next day I informed them I had changed my mind, and I wish to change the order. They informed me that I would be liable for a 50% restocking fee.

I have heard of restocking fees before, but usually only for stock that is returned (change of mind), and usually 10-20%

My questions are : Is there any way to challenge this fee? Is there any law on this? I am happy to pay any reasonable costs of cancelling my order (eg. freight, in the case that the supplier has already shipped it)

I'm in NSW.

Comments

  • +13 votes

    You don't have any default rights to cancel an order for change of mind. Your options are to ask nicely for them to reduce the fee, eat the fee, or… get this… follow through on your purchase that you made.

  • +4 votes

    Is there any way to challenge this fee? Is there any law on this?

    Does the seller have to legally provide you with a refund? I don't think you're protected under consumer law for a change of mind. So when they attach a fee, they just refund you 50% of the funds. So you can't stop it anyway.

    Whether it's reasonable or not? I can't say. Mattresses are quite unique and customers are particular about their mattresses, so.

    • +2 votes

      Whether it's reasonable or not? I can't say. Mattresses are quite unique and customers are particular about their mattresses, so.

      I was thinking along the same lines. Plus seller may have already ordered it in from their supplier, and cannot cancel. They will sell it to someone else eventually, but then its quite a bulky item, sitting round wasting their space until someone wants it.
      Some sellers these days keep basically zero stock, then when an order comes in on website etc, they have it supplied by their supplier, sometimes even sent direct from 3rd party supplier.

  •  

    If you put down a deposit you could lose that, if you didn’t but any deposit then pretty much they can’t charge you anything.

    • +11 votes

      if not contact ACCC ?

      You do realise that retailers are NOT obligated to accept change of mind returns by law right?
      Big retailers allow it out of good wills and/or to encourage sales, it's not a mandatory entitlement (sorry, had to use this word).
      The mattress place could outright refuse OP's cancellation request if they wish to.

      • -1 vote

        Yes, I understand that. Although they are likely to get a lot of repeat business from me (it's not just a mattress shop)

        • +1 vote

          Maybe you can ask for a voucher for the amount you paid,so you're forced to spend the money with them (they lose less)

    • +4 votes

      Used to work for the ACCC. Don't contact the ACCC. They will not do anything to assist you because it's not within their power to investigate individual claims. You want to go to Consumer Affairs in your state.

  • +2 votes

    Read the terms and conditions of the sale through the retailer. You agreed to this when you've placed your order.

    Just to give you some perspective of why there's a restocking fee. You've created a chain of events, the retailer is charging you the labour and extra fees to undo those events.

    You've placed an order. They've then placed an order to their supplier. Their supplier then puts the stock aside, and may even start the delivery process. This could easily have been done within a day if they're efficient.

    The courier may have charged the supplier a fee. The supplier may then charge the retailer a restocking fee. Now, should the retailer eat those costs because you've changed your mind?

    I agree, 50% is extreme, but it may cost $100+ for a special delivery from the supplier. We're not talking about 100gram items here.

    My suggestion: Contact the retailer and ask what stage the mattress is. If they haven't even sent the order to the supplier, or if it's all internal (warehouse out the back), then it should be waived/discounted.

    • -1 vote

      Yeah I understand this. If the restocking fee was $100 or reasonable, I'd be happy to pay. But he wants $800. I don't believe he has incurred 50% of cost of the item even before delivery.

      This is for a Bricks&Mortar store, and the frame was already in stock (presumeably at a warehouse as it wasn't in their showroom)

      • -1 vote

        Yep, that's ridiculous. I'd fight it too.

        So if you bought a $20,595 mattress, they'd want $10,000+ restocking fee?!

        Maybe if it was custom made, late in the manufacturing!

        They don't have to refund you at all for change of mind, but you should be able to get this escalated to head office before the negativity reaches social media ;)

        Another reason why a retailer would have a restocking fee is that they could have sold the item to another customer, so they're out of pocket by not being able to sell. This leads to additional floor room cost as well. This wouldn't count in this specific case, unless it was limited stock.

        •  

          Thanks so much for the kind words. I will provide another update after I have more words with the retailer

          • +1 vote

            @WaywardOne: Before you think that you will win the social media war, just remember that no mattwr how many peoole that side with you, there will be a lot of people, like myself, who dont.

            Some of these people will start looking at your personal info and get creepy about their dislike of your behaviour.

      •  

        You're reneging on a contract - they've lost 100% of the sale, plus storage costs.

  • +2 votes

    If it's a mattress, some comes with money back guarantee, as some people might not like the mattress they purchased after a few nights sleep.

    If yes, perhaps you can continue to proceed with the order, and claim for money back guarantee?

  • +2 votes

    It really depends on the seller. If a seller has low margins and they have to order from somewhere else when you commit to buy, it means that they'll need to fork out money for the product first. If you then cancel, they're stuck with an item that they may need to store for quite some time before they can sell it again. Since they're ordering from somewhere else, it could well be that they dont sell many of those items. Therefore it might take a long time to sell, IF it sells.

    If the seller has a high margin and they charge you 20% restocking fee, you could already be paying for the entire cost price of the product with your fee and the profit bit comes in once they sell that product to someone else.

    Im not arguing the store is right. My only advice is that next time you think carefully before committing to buy. Just because it's an online purchase, it makes it no different to handing over your cash once you hit the confirm button.

    Like others have said, they dont even have to offer you a refund.

    • +6 votes

      I'm all for this guy getting his money back, but trying to chargeback a legitimate transaction is fraud…

        • +6 votes

          Except banks don't simply process chargebacks without allowing merchants an opportunity to provide details of supposed unauthorised transactions.
          In this case, mattress place faxes them the contract of sale, bank goes "oh, okay", denies OP's chargeback request and OP risks attempting fraud.
          Seriously, people need to adult up and take responsibility for their own actions.
          What's next?
          "Oops, took up loan and bought a car, changed my mind. Can I just stop paying?"
          "Yeah, just drop it back at the dealership and call it even, it's not like you have the car anymore."

          •  

            @zonra: Yep, and given how anal the banks are getting these days, when you try to get a loan later on, attempted fraud is going to be something they'll hold against you.

  •  

    restocking fee is legal however there is a limit, i believe there its 15-20%

    with a bit of googling you should find the actual maximum figure and if there are any exceptions to that maximum, consumer affairs is probably a good shout, they are eager to help and will follow up, used them once and they were excellent

    50% sounds like complete bullshit and illegal

    •  

      I thought 15-20% was more common too. However I can't find any references to a NSW limit

      •  

        i could be wrong but i seem to remember reading about a limit in nsw

        at any rate contact consumer affairs and they would be able to advise you, for the fee to stand that need to make you aware of during purchase, if it isn't anywhere in the fine print to a document you signed and if they didn't tell you before hand then there is a good chance they can't enforce it

        but even if they did inform you of the 50% if you get consumer affairs involved then the company might been pressured/forced to justify that fee

        i dealt with them via an email once and they got back to me instantly, haven't seen the public sector work as efficiently since but maybe i got lucky

    •  

      There is no limit, but should be stated in the returns policy. Some stores have a restocking fee of 20% or $20 whichever is higher. This means that a $30 product would have a 66% restocking fee.

      But I do agree, 50% is excessive. Mine ranges from 5% to cover admin fees if the item can be resold as brand new (ie. never opened, everything is as it left the store) to 20% if the item has been opened, set up or used once and I have to sell it as a near new/demo unit at 15% off to recoup my losses.

      Also remember some merchant facilities do not refund the transaction fees. ie Afterpay fees are very expensive for the retailer and is not refunded if we have to refund the customer.

      My suggestion is ask for Store Credit. Can't guarantee they will remove it completely but should lower it. I know I would rather issue store credit with a lower no restocking fee than a refund.

  • +3 votes

    I think that some of you guys are barking up the wrong tree here and can actually make OP's situation worse.

    Firstly, there is no legal remedy here. There is no guarantee under ACL regarding "change of mind" returns, which this is. What this means is that anything regarding ACCC, Consumer Affairs, taking it to the tribunal…etc. is all really bad advice.

    If OP were to be able to get a refund or a reduction in the restocking fee, it would be through negotiation with the retailer. The worst way to start that negotiation is "refund me or I'll report you". They know there isn't a legal leg for you to stand on and there will be no hope of OP getting that restocking fee waived.

    My advice is to start by accepting that you made a mistake in buying that mattress. Think of why it might not be suitable and approach the retailer and speak with a manager about it. Let them know that you acknowledge they are helping you out and that you're not entitled to a refund in this case. Talk about why they should offer you a refund. For example, you intend to buy another mattress from them, you are a repeat customer, or some other reason.

    If negotiation fails, then start throwing dirt. For example, reach out to A Current Affair or one of those shows or start posting bad reviews. This is much more likely than trying to do anything like report them to the ACCC. Understand that they are completely in the legal right here, so don't use an approach that will get you no benefit.

    •  

      consumer affairs are pretty good, they'd gladly offer the op the relevant advice… that being said i agree with your post, don't go in there guns blazing, tap into a resource like consumer affiars to get the lay of the land and then go in and see if you can organise a truce, otherwise, bring in the artillery.. if it's available

  •  

    Take the item and list it on eBay or gumtree.

  •  

    How come you changed your mind OP?

  • +1 vote

    check to see if your credit card has Refund Protection Cover

  • +1 vote

    You entered into a contract with the company and changed your mind for no apparent reason.

    The store may have already ordered the mattress from their supplier who will also charge the store a restocking fee, and they may insist the store takes delivery of the mattress and pays them full amount.

    While 50% restocking fee is a little excessive, up to 25% is more common, you are stuck with it.

    The best you can expect is a store credit of 100% IF you contact the store and ask them very nicely

  • +4 votes

    Sounds like you are making a hasty decision about the mattress.

    Maybe you should sleep on it.

  •  

    A 50% restocking fee isn’t excessive. The alternative is retailer say no return and no refund.

    Take delivery of the good and sell it.

  •  

    why people do not contact the Dept Fair Trading in their state or territory to find the details of their problems I really do not know ask them if there is any cooling off period there are many things out there that you would not believe are available for purchasers of goods,read the company terms and conditions to see what they say if you cannot get out of it you can pay for it and keep it in its original packaging and flog it off on Gumtree at a reduced price around 20% cheaper,people need to know the ins and outs,all are in the terms and conditions of purchasing the goods
    how did you tell them you had changed your mind,if by phone you probably have no chance,if by email or letter maybe but you have to be lucky,Credit card you may be able to apply for a cash back if you have proof of wishing to cancel the item but you would have to prove you contacting them before it was sent out to you,

  •  

    If it was an online order, the website should have a terms and conditions link at the bottom in the footer section or sometimes the FAQ section.

  • -1 vote

    Today tonight. They need a laugh too.

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