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Protecting businesses against consumer refund and exchanges

On Behalf of | Jul 24, 2023 | Business Law

Tennessee’s Refund Policy Disclosure Act, also known as the “Refund Policy Disclosure Act,” is a consumer protection law that ensures fair practices in retail establishments. It provides guidelines for businesses to follow when dealing with refunds and exchanges of merchandise. By understanding this act, a business owner can be confident in their rights against consumer claims.

Displaying refund policies

To ensure transparency, every business selling merchandise directly to consumers must prominently display its refund policy. Signs stating the store’s policy should be attached to the item itself, affixed to cash registers or posted at public entrances. Examples of what a store’s policy must state include:

  • Whether they offer refunds or not
  • Under what conditions for sale items
  • Policy for purchases without proof of purchase
  • Time limitations

These are just the common examples of what a store’s policy must include. Seeking legal counsel can help ensure the policy covers all details concerning refunds and exchanges.

Buyer protection and liabilities

If a business violates the act, it becomes liable to the buyer for up to 20 days from the date of purchase. The buyer can choose between a cash refund or store credit if the merchandise is still unused and undamaged. However, the act does not apply to custom-made merchandise, perishables, motor vehicles or nonreturnable items.

Legal recourse for consumers

The act also allows individuals to take legal action against establishments that do not comply. An individual may bring a claim in the municipal court where the purchase occurred. In addition to penalties, businesses that refuse returns despite claiming a return policy could be liable for a cash refund or credit, as well as damages of up to $200.

Preventing deceptive practices

The act also aims to prevent businesses from conducting deceptive practices. For example, it prohibits them from requiring consumers to sign documents related to a sales transaction. If a signature is needed, they must receive a full and accurate copy of the document. In addition, businesses should not conduct misleading solicitation of used goods donations. This is especially true if they aim to use it for profit-making purposes.

Tennessee’s Refund Policy Disclosure Act aims to protect consumers and promote fair business practices. By understanding its provisions, business owners can take proper action to make sure they don’t violate the law. In this way, they can also protect their business when a consumer seeks refunds or exchanges for their merchandise.

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