First and foremost, your Return/Refund Policy should govern the situations in which you must legally accept a return or refund request made by a customer for goods.
When can a customer reject the goods?
A customer is entitled to reject the goods with a full refund, i.e. get their money back, if any of the following conditions are satisfied:
- the goods are faulty;
- the goods are not of satisfactory quality;
- the goods do not match their descriptions;
- the goods are different from the ones the customer ordered; or
- the seller fails to deliver the goods by the agreed date (where the seller has not notified the buyer of the delay and the buyer has emphasized that punctual delivery is necessary).
Where the buyer rejects the goods with a lawful reason (one of the reasons listed above), you, as the seller, cannot force the buyer to return the goods. The buyer needs only to make aware to you that he refuses to accept them. For example, the buyer may merely contact you, return the goods by himself, or ask the delivery man to take the goods back to you.
Limitations and exceptions
Valid rejection
However, for a valid rejection of the goods by the buyer, it must be clear that the goods have not been accepted and remain at the risk of the seller; in other words, the buyer has not taken responsibility for the goods.
As per the Sale of Goods Ordinance (Cap. 26), the buyer is deemed to have accepted the goods when any of the following have occurred:
- the buyer makes known to the seller that he has accepted the goods;
- when the goods have been delivered to the buyer and he/she acts in relation to the goods which is inconsistent with the ownership of the seller (e.g. the buyer claims ownership over the goods and then resells the goods); or
- after a reasonable time (the elapse of a “reasonable time” may be determined by whether the buyer had a reasonable opportunity to examine the goods), the buyer retains the goods without making known to the seller that he/she has rejected the goods.
Return of goods
In the case where the buyer is deemed to have accepted the goods, even if the buyer later discovers problems or defects, the buyer does not have the right to return the goods and demand a full refund. Instead, the buyer, upon returning the goods, may sue you for compensation if you do not replace the goods with new ones.
Nevertheless, it is important to note that the above requirements by the law in Hong Kong are the bare minimum, in favour of the buyer, in which you must adopt. Your business’s specific Refund/Return Policy may be drafted more in favour of the buyer and, if so, your Refund/Return Policy should ultimately govern in determining whether you must legally accept a return or refund request made by a customer for goods.
Key takeaways
- Your Return/Refund Policy has the ultimate authority in determining when you must legally accept a return or refund request from customers for goods.
- However, as a bare minimum, in favour of the customer, the customer is entitled to reject the goods with a full refund under Hong Kong law if certain conditions are met regarding the goods and its delivery and the customer has not yet accepted the goods.
- Where the customer has accepted the goods and discovers problems or defects, you do not have to give them a full refund, but you should still provide them with replacement or compensation upon return of the good(s).
Bibliography:
Legislative Council of the Hong Kong Special Administrative Region of the People’s Republic of China, ‘E-consumer protection’: https://www.legco.gov.hk/research-publications/english/essentials-1920ise08-e-consumer-protection.htm