Legalese - December 7, 2006

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Making a list and checking it twice is good advice not only for Santa but also for the rest of us if we want to avoid impulse buying and over-spending this Christmas or “Holiday Season”. Similarly, “Buyer Beware!” and “Be Informed!” are catchy phrases that should dance in the heads of consumers all year, but especially during the countdown to Christmas as shoppers are entreated to buy! Buy! BUY! for that special someone.

For those of you who have not yet finished your Christmas shopping, we want to share with our readers some important consumer tips to help avoid unwanted surprises under the tree.

Tip 1: Returns - Ask Before You Buy

Before you purchase that perfect gift that you just “know” will be loved and treasured find out:

• If the store gives full or partial refunds, exchanges or credit notes
• If items can only be returned within a certain period of time
• Whether special items such as lingerie, cosmetics or jewelry are excluded from the store’s refund policy
• If only unopened or clearly unused merchandise can be returned
• If there is a “restocking”, or similar fee to return goods
• What you will need as proof of purchase (i.e. a sales slip, cancelled cheque, account bill and/or the original packaging and merchandise tags)

Many people believe that stores are required by law to take back goods, but unless it’s part of the purchase contract consumers do not have an absolute right to return “unwanted” gifts or items. Refunds and exchanges are customer service policies which are adopted by some, but not all, retailers. Consumers should keep in mind that unless asked, the retailer is under no obligation to post a sign or otherwise inform the purchaser of its “return” policy.

A similar consumer misconception arises with deposits. Many people believe that if they’ve only paid a deposit they can change their mind and not complete the purchase. However, once a person enters into a legally binding contract, he or she is responsible for paying the full amount by the agreed date. It may not be as simple a matter as forfeiting or losing your deposit!

Remember:

• If you don’t understand an agreement, ask the seller to explain it clearly before you buy
• Make sure you get all promises in writing and keep your receipts.

Tip 2: Gift Cards (unlike diamonds) May Not Last Forever

If, instead of accepting the risk and hassle of trying to exchange or return an unsuitable gift, you decide in favour of purchasing a gift card or gift certificate for your special someone, you’re not alone. It is estimated by retail consulting firm J.C. William that the gift card market in the United States will reach $70 billion in 2006 up from $45 billion in 2003 and $1 billion in 1995. With this surge in consumer demand, it is perhaps not surprising that retailers have found ways to capitalize on the popularity and convenience of this consumer trend by imposing expiry dates and/or some kind of service fee or loss of value of the gift card after a specific length of time. Often the terms and conditions associated with the gift card are not prominently displayed, putting the onus on the consumer to find out:

• Whether there is an expiration date on use of the gift card (commonly 18 months or two years)
• Whether the value of the card will decline over time or if there is a service fee
• Whether there are any other limits on gift card use, such as whether certain products are exempt from purchase with a gift card, or if the gift card or its remaining balance after being used for a purchase can be redeemed for cash

In a move to regulate the gift card market, the Ontario government has introduced new consumer protection legislation that, if passed, will allow it to eliminate expiry dates and regulate the terms and conditions for gift cards. According to a government press release, the proposed legislation is intended to ensure that the consumers of Ontario “will get what they pay for” but will not apply to loyalty cards, discount coupons or promotional/charitable gift cards. This Holiday Season consumers should be aware that the proposed consumer protection legislation is not yet law and when passed is unlikely to apply to this year’s purchase of gift cards. As a consequence: Buyer Beware! Be an informed consumer and watch for our next Consumer Tips column.

Before then, if you have a consumer question, please give us a call at 613-279-3252, (toll free 1-888-777- 8916) or simply drop by. The price is right: Rural Legal Services provides legal information without charge to area residents. Alternatively, you can contact the Consumer Services Bureau of the Ministry of Government Services at 416-326-8665 or visit the Ministry website at www.gov.on.ca/MGS and follow the consumer protection links.

Part II

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