As twinkly lights and festive carols start to take over the high street, it is very easy to give in to the temptation to spend. While it is always worth keeping an eye on the budget, it is equally important to ensure that your purchases are protected as far as possible.
Your Consumer Rights
When buying something, you have certain rights that the retailer is required to uphold. Goods must:
- Be of satisfactory quality
- Be as described
- Be fit for purpose
- Last a reasonable amount of time
If your purchase doesn’t meet these standards, you are entitled to a full refund within 30 days.
For online orders, you can return items for a full refund within 14 days in most cases, even if the item is not faulty and you have simply changed your mind.
Digital content is treated slightly differently, but you should still expect fair and reasonable treatment from the seller.
The rules for buying services are less clear cut, but the Consumer Rights Act dictates that services should be provided:
- With reasonable skill
- Within a reasonable time
- At a reasonable price
Most reputable shops and service providers offer more generous policies. After all, they want their customers to keep coming back.
It is not always as simple as this. Companies fail on a daily basis, sometimes without warning. Sticking with known brands doesn’t always help, as customers of Thomas Cook and BHS will tell you.
And this is before we start to consider criminal activity, such as online scams and identity theft.
Credit card purchases are covered by Section 75 laws, which means that your credit card company is jointly liable with the retailer.
The following situations would be fully covered under Section 75:
- Most purchases of between £100 and £30,000, for reasons of fault, non-delivery, fraud or company failure.
- Deposits on larger purchases, even if under £100. For example, you could pay a £50 deposit on a £500 sofa, and you would be fully covered even if you used another payment method for the £450 balance.
- In some cases multiple purchases totalling £100 or more are covered, e.g. items purchased as a set.
- Costs arising from the initial problem. If an event is cancelled, you may be able to claim for travel and accommodation costs.
- Store card purchases, where the card is provided by a third party company and not the retailer directly.
- Purchases made at an earlier date with a card that is now expired or cancelled.
Section 75 rules would not cover you in the following circumstances:
- Where the purchase is under £100 or over £30,000. Higher value purchases are covered by different rules which can be relatively complex, and outside the scope of this guide.
- When buying a basket of goods totalling £100 or more. The protection applies to individual items, not the total purchase value. Exceptions may be made where items are purchased as a set.
- Credit agreements that are held directly with the retailer, for example, catalogue accounts.
- Where a third party payment processor is used. PayPal transactions are not covered by Section 75, even if the payment is ultimately made by credit card. PayPal does offer some protection but are not bound by law to do so. Proceed with caution when using other, lesser-known payment processors.
It is usually worth approaching the retailer first, as this can result in a quicker, and more satisfactory resolution. However, you do not have to do this under Section 75 rules, as the credit card company is equally liable.
If your credit card provider won’t help, and you believe you should be covered, you can contact the Financial Ombudsman Service to make a complaint.
While debit cards do not benefit from Section 75 protections, all is not lost. Visa, Mastercard and American Express are all part of the Chargeback scheme. This not only protects debit card purchases, but also credit card purchases of under £100.
This is a useful failsafe for smaller purchases, but it is not enshrined in law. It is offered by the card issuers at their own discretion.
The circumstances in which Chargeback may be used are similar to the Section 75 rules, and include fault, non-delivery, fraud or company failure.
The key differences between Section 75 rules and Chargeback are:
- Chargeback claims are not protected under the law.
- In most cases, claims must be made within 120 days of purchase or expected delivery. Some exceptions are made. For example, where the claim is for a flight, the 120 days starts on the planned day of departure, rather than the date of booking.
- While Mastercard imposes a minimum claim level of £10, no minimum applies to the other card issuers. Purchases of under £100 are covered.
- Only the value of the actual transaction is covered, not the full purchase if additional payments were made by other means.
To start the claims process, contact your bank and tell them you would like to dispute a transaction under the Chargeback scheme. This may or may not be straightforward, as branch or contact centre staff are not always aware of their own rules. Placing the request in writing, while a little slower, can be more effective at reaching the right person.
There is no statutory timescale by which the refund needs to be processed. Large scale company failures (such as Thomas Cook) can increase the demand on the service and lead to much longer waiting times.
If your bank is unwilling to help, or takes more than 8 weeks to reach a conclusion, you can complain to the Financial Ombudsman Service.
While both credit and debit card purchases are protected to an extent, only credit cards are covered by law. You may also be able to claim for consequential costs arising from the initial problem, and for the whole cost of the item, even if you only used a credit card to pay the deposit.
So if your Christmas shopping involves games consoles, bikes or the complete Harry Potter Lego set, reach for your credit card first.
Debit cards still offer some protection, so are the ideal payment method for stocking fillers, wine and turkey.
If you are still using cash, this might help with your budget, but sadly does not qualify for any level of protection other than the retailer’s usual responsibilities.
Please do not hesitate to contact a member of the team if you would like to find out more.