There is much confusion around the issue of when a consumer can return a product to the seller and rightfully demand a refund. In fact, this is one of the most commonly asked questions that consumer protection attorneys hear. When can the consumer return a product and get his or her money back? And, more importantly, if they won’t refund your money, what do you do then?
Generally speaking, consumers are protected in most purchases of goods when the products are sold by merchants and the goods aren’t sold “as-is.” Simply put, a merchant is usually a business, such as a store or a dealer, but can be a person that holds themself out or advertises as dealing in goods of that kind. A Wal-Mart or an Arbor Drugs is clearly a merchant, as is a car dealer. A person who advertises items or goods for sale and if they do it often is a merchant. A person advertising to sell their car in the local paper is not a merchant if they are merely disposing of their personal car. “As-is” sales are discussed below.
The importance of buying from a “merchant” is that all sales of goods in Michigan by merchants are accompanied by an “implied warranty of merchantability.” This is the concept that the goods you are buying will be fit for their ordinary purposes. Since it is an “implied” warranty, the merchant does not have to make any statements or promises to you for this to exist. The implied warranty of merchantability exists on its own. That means that if you buy a refrigerator, it will keep your food cold; a lawnmower will cut grass; a hair dryer will dry your hair. This implied warranty exists along with any other warranties which might come with your product.
The most important aspect of this to consumers is that if your product doesn’t work as you reasonably expected, you may revoke acceptance of it and return it to the seller. (The same is true if your product came with an express warranty that isn’t honored. Many products state that if they fail or are defective, the manufacturer will repair or replace them within certain guidelines. If they do not fulfill that “repair or replace” obligation and you have complied with all of the requirements of the warranty, you can demand a refund as well.)
Although the term “revocation of acceptance” sounds legalistic, it stands for the simple concept that you can return a defective product for a refund. To rightfully revoke acceptance of the defective product, you must do so within a reasonable time and before any substantial wear and tear of the item occurs which is not the result of the defect. A “reasonable” time is not defined within the law, but it would be safe to say that as soon as you discover the defect, you should plan on returning the item at your next opportunity. That the item cannot substantially change in condition means that you cannot use the item or wear it out before returning it. It would probably be a good idea to not use the item at all once you have discovered the need to return it. Otherwise, the merchant might argue that your use of it proves that the item wasn’t defective.
Be aware that these aspects of the law cover all purchases of goods, and goods can be anything from the items described above to automobiles. Car dealers do not want you to know this! Most consumers who have tried to return defective cars to selling dealers describe harrowing experiences and arguments with salespeople and managers who threaten to call the police or have the cars towed away as “abandoned.” But, beware: the car dealers are experienced in this field, and take extra precautions when selling their merchandise. Often, they do this “as-is.”
As-is sales are when items are sold “with all faults,” so that the consumer is assuming all the risks that may accompany the purchase by way of defects that cannot be easily seen. Many, if not most, used car dealers will sell their cars “as-is.” To do this, they designate the cars as “As-is” sales on the sales documents and on the Buyer’s Guide which is in the window of the car on the lot. There is nothing illegal about “as-is” sales, and you should make yourself fully aware of the ramifications. An “as-is” sale does not come with the protection of the implied warranties described above if the seller disclaims the implied warranty of merchantability. To be a valid disclaimer, it must be conspicuous, and mention the word “merchantability.” Without that wording, in a conspicuous fashion on the document, the sale will still come with an implied warranty; with that wording in a conspicuous manner, there are NO enforceable warranties. An “as-is” car could break down five minutes after you have driven it off the lot and the full repair cost will be your responsibility.
This does not mean that a merchant or car dealer can defraud a consumer and hide behind an “as-is” sale either. All an “as-is” sale means is the vehicle is sold with all faults and with no warranty of merchantability. If the dealer lied about the year of the car, or rolled the odometer back, or if the car was stolen, the “as-is” sale would not keep you from going after the dealer to take the car back or pay you damages. Unscrupulous dealers will try to sell salvaged vehicles “as-is” without disclosing the salvage history; or, they will mask known problems in the engine through the use of heavy oil and then sell the vehicle “as-is” knowing the engine will explode days after purchase. Again, a buyer could revoke acceptance of these kinds of vehicles because the active misrepresentation or fraud is not waived by the buyer in an “as-is” sale — only the implied warranty of merchantability.
To protect yourself in an “as-is” sale, have the car fully inspected by a mechanic AND negotiate a price that is fair considering the cost of repairs that you may have to make to the car immediately after taking possession.
If you rightfully revoke your acceptance of the product, of whatever kind, the merchant must refund your money to you. If they don’t they are violating the Michigan Consumer Protection Act. The Act specifically prohibits failing to refund the consumer’s money in a transaction that is rightfully canceled or rescinded. If you had returned the item to the seller properly, and they refused to refund your money (or trade-in if you traded a car in on another, for example), you could sue them under this Act and if you won, you would be entitled to a full refund. Further, if you won, the merchant would have to pay your attorney fees and court costs for the action. Even if the cost of the item is small, you’re entitled to a minimum recovery of $250 if you prove that you’ve properly revoked acceptance of the product and the seller refused to give your money back.
Remember, you don’t have to live with purchases of items that don’t perform as you expect. As a consumer you have the right to demand your money’s worth. If you don’t get it, return the product and demand your money back!
Steve Lehto is an attorney specializing in Consumer Protection and Lemon Law. He is the past chair of the Consumer Law Section of The State Bar of Michigan, and also hosts a weekly radio Consumer Protection call-in talk show on WFDF – 910 A.M./Flint (Saturdays from 11 a.m. to 1 p.m.). You may learn more about Consumer Law by visiting his website at http://www.lehtoslaw.com. He answers all E-mail questions sent to him at Lehto@Kennon.com, or you may call his office at (248) 855-0866.