Being Charged % Handling Fee for Cancelled Order (Not Online Order)

[EViS]

Company x: Trade counter 'shop' also oppened to public.
Company y: Manufacturer of electrical goods & supplier to company x.

I placed an order for £600 worth of electrical goods (sockets, switches, cabling, etc) earlier this week from company x & paid upfront by debit card. Company x said they will have to order all the items from company y and the order should be ready for collection within 2/3 days.

Yesterday, I called company x to cancel the order. I was called later in the day to be told the following:

a ) Company y had already dispatched the goods, however made contact with the courier and managed to stop the order from reaching company x.
b ) Company y are charging company x a 25% 'handling fee' for the cancellation.
c ) Company x will waive half of this fee (in good will and the promise from me of future business) and charge me half of this 'handling fee' @ 12.5%.

I argued that I was at no point told, neither is it stated on the receipt, that cancelled orders will incure a 'handling fee'. Company x argued that;

i ) They are a trade wholesaler and not a retail store (despite being open to the public?).
ii ) Not all of their suppliers charge handling fees, and if they were to make their customers (trade or public) aware of which suppliers charge a fee and which do not per order, "they would be there all day".
iii ) They can send me a copy of company y's policy outlining their handling fee to company x.
iv ) They already waived a £17.50 postage fee (in good will) charged by company y due to the size of my order.

Throughout this process, they kept putting me on hold (probably to ask someone else in their shop?), which makes me think they're unsure whether what they are doing is in fact legal. So where do I stand as they are refusing to refund me my full amount.

1 ) In regards to 'i)', does this means that different trading laws apply (i.e. 14 days to change mind & return an order in its original condition does not apply)?
2 ) Are they in the right to charge me the 'handling fee' imposed by their supplier, despite me not being made aware of this fee if I were to cancel my order?
3 ) If what they are doing is illegal, should I do a Visa charge-back with my bank for the full amount before they refund me the total minus the 'handling fee'?
4 ) If what they are doing is illegal, where can I find specific clauses (Trading Standards?) to back this up?

[gyzmo]

The law works slightly differently for B2B than it does B2C (generally, the former is less well protected). whether you are a consumer or a business is a matter of fact and includes things like purpose of purchase, element of profit, regularity etc.

If you were retruning the goods due to a breach of a statutory right (or contractual right), then they can make no charge whatsoever.

If, however, it is merely a change of mind for example, then it will come down to teh contract and terms and conditions of sale, which should be brought to your attention before the transaction. This need only be in the form of "terms and conditions apply - see XXX for details" for example.

I know that you said it was not an on-line order, but was it a distance order at all? And are you acting in the course of a trade?

[EViS]

I am a private customer (not trader) acting under my own name. It was not distant as I walked into their shop premises.

For the record, what is B2B & B2C? Business to business and business to customer?

[gyzmo]

that's right. I take it all the goods you bought were for your own personal use? Its just that such things might be seen as being bought for trade.

I would think that the only way out is to suggest a breach of contract, for which you will need to look at the contract terms

[rippedoffagain]

You made a contract to buy goods from company x, you are in breach of contract for cancelling. They are entitled to a fee. They could even sue you for loss of profit.

[EViS]

So there are no regulations for 'changing mind' when purchasing from a physical store as exist when purchasing goods online (i.e. Distance Selling Regulations)?

I take it all stores that have a 14-day money back guarantee for changing mind/faults/etc. do it out of good will?

But surely, I should be made aware of a 'cancellation fee' prior to enterring the contract (i.e. paying for the goods/service)? Not afterwards, at which point they could in theory charge me anything (incl. 100%) which would be unfair...

[rippedoffagain]

Contract law, call it what you will. If you buy a chocolate bar in a shop, and then change your mind and decide you don't want it, you would be very unlikely to get a refund, and you wouldn't expect the owner to warn you in advance.

[EViS]

Good example, same result if you bought a newspaper and tried to return 7 days later saying you changed your mind & didn't like the news .

How would the courts determine what a fair restocking/handling fee is? Surely 90% wouldn't be determined as reasonable?

[gyzmo]

That's possible, but it is up to you to prove that.

Legislation that allows returns is there to protect the consumer. some are obvious, such as sale of goods act which implies terms into a contract that goods are fit for purpose, etc. Stops rogue traders from putting a clause in to the contrary.

Other legislation provides protection in different ways. If you buy something in a shop, you have the opportunity to examine it before making a purchase. You do not have that with distance selling, hence the introduction of the automatic cancellation period.

Changing ones mind is not something that a person needs protection from (with one or two exceptions such as a Mr G. Brown), so there are no controls in that area. Its simply a case of two contracting parties agreeing that they will do business and on what terms. Sometimes those terms may put one at a disadvantage, hence the protection from unfair terms regulations, which takes us back to square one... for you to challenge that the term is unfair or not agreed to.

Rippedoffagain got it right when stating that the trader could sue you. However, such things are unlikely as businesses would, well, go out of business.

[EViS]

All very well explained, thanks guys!

Now one final question (not related to this case) so I know for future cases:

When buying something online and the website clearly states that an x% restocking fee will apply to any returns. Does the distance selling act overule this?

If so, I take it that the distance selling act will only apply for the first 7 days, afterwhich the store can legally charge a % restocking fee?

[gyzmo]

In short - no. They must refund the full amount less postage. A trader can only charge the direct cost of posting (unless it is returned for breach of statutory duty in which case absolutely no charge can be made at all).

[EViS]

Is that only within the first 7 days? Or even after 7 days (the distance selling act states 7 days to inspect the item) they must still refund the full amount for a 'change of mind'?