Section 2 -  Buying Goods and Services

Lesson 6 - Deposits and Returns

Mario and Kierstin are shopping for a new dishwasher. After checking a number of appliance stores, they finally find one on sale.

"What a deal!" whispers Kierstin. "We'll save over $100 if we buy this one."

"Hang on a minute," Mario replies. "The sales ends Monday, but we won't have enough money till you get paid next week. Besides, the sign says 'All Sales Final.' That means we can't bring the dishwasher back if there's anything wrong with it, doesn't it?"

"But it's such a steal! We just can't pass it up. Maybe we can put down a deposit or something and hope for the best."

Have you ever found yourself in a situation like this?' In this lesson you'll examine laws related to returns and deposits on the purchase of good and services.

What Is a Deposit?

The situation described at the beginning of this lesson occurs every day. Knowing that the couple didn't have the money they needed but not wanting to miss the sale, Kierstin suggested putting a deposit down on the appliance. They might be able to do this, or they might not; it all depends on the policy of the store.

A deposit is money someone puts down on an item for sale on the understanding that the item will be held for a specific length of time. In other words, a shopper gives the store a percentage of the item's cost in return for an agreement that the item won't be sold to anyone else for the stipulated time.

By making a deposit, the buyer is assured that the seller will hold the item. But since a contract must have two sides, the seller has to get something in return for giving up the chance of selling the item to someone else. What the seller gets is the deposit money.

The benefit the seller gets in the case of a deposit is the right to keep the deposit if the purchase is never actually made. Sellers, then, are under no legal obligation to return deposit money. Of course, some sellers may choose to return deposits to keep their customers happy; they may see this as a good business policy. They may even put this in writing --perhaps stipulating that they'll return the deposit under certain conditions. Remember, however, that they don't have to do this.

Here's a practical tip: If a salesperson tells you that a deposit is refundable if you change your mind about buying something, it's wise to ask that this understanding be written on your receipt. Otherwise, you'll have no proof that the promise was ever made.

What Is a Return?

Take the Consumer Awareness Test that follows. You haven't studied this material yet; it's designed to discover what you already know.

1. Sonia buys an electric bread knife, but when she gets it home and tries to cut some bread, it doesn't work. Can she take the knife back to the store and get her money back?

2. Sherry buys a wool sweater. She mistakenly washes it in hot water, and it shrinks. Only later does she realize that the instructions on the label say "Dry clean only." Can Sherry return the sweater?

3. Mr. Sousa tries to cut a metal pipe with his new crosscut saw and, in the process, ruins the blade. Can he take the saw back for a refund?

4. Denzel buys a new shirt. The package says the shirt has short sleeves. But when he opens it up. Denzel finds a long-sleeved shirt inside. Can he return the shirt and get a refund?
   
   

Turn to the Suggested Answers at the end of this lesson and compare your answers with the ones given there.

If a store agrees to a return, this can involve any one of the following arrangements:

• You may be given a refund of the purchase price. In other words, you get your money back.

• You may be allowed an exchange. This means you return the item and choose another item in its place. If the new item you select costs more than the original, you'll have to pay the difference.

• You may be given credit. When this happens, the store takes the item back and gives you a credit voucher with which you can buy something else from the store at a later date.

Return : an arrangement whereby a seller accepts a purchased item back from the buyer in exchange for the purchase price, other merchandise, or a credit voucher.

It is important to note that returning merchandise to a store is a privilege, not a legal right. There is no law that says stores must accept returns.

Since different stores have different policies on returns, it's important for customers to find out what those policies are before making purchases. Some stores post signs that explain their return policies; others don't. Ultimately it's up to the customer to find out what each store's policy is . Before buying an item you think you might wish to return,

• look for signs explaining return policies
• ask sales personnel about return policies
• get all promises in writing

Since policies on returns can vary significantly from store to store, it's important to know just what they involve. Following are four typical situations you might encounter:

Suggested Answers

1. Yes. The store must replace or repair the knife or perhaps offer a refund. The knife should do what it's supposed to.
2. No. Sherry hasn't followed the instructions printed clearly on the label.
3. No. Mr. Sousa used the saw for an inappropriate task; it's his own fault that the blade is ruined.
4. Yes. The store must exchange the shirt for a short-sleeved one or offer a refund. Merchandise should be similar to what is described on the package.