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NYC Fines Retailers for Return & Restocking Fee Violations

December 5, 2005

Returns • Survey Finds Consumers Wary about Holiday Returns • NYC Fines Retailers for Return & Restocking Fee Violations • Not Many Happy Returns • Retailers' Return Policies Getting Tougher

Three retailers -- Express, Staples and The Sports Authority -- have been fined $95,000 by New York City for refusing customer returns without disclosing the conditions of their return policies. Seven other retailers were fined for restocking fee violations.

New York City Department of Consumer Affairs (DCA) Acting Commissioner Jonathan Mintz today said the three used return-tracking company Return Exchange, but did not clearly post why returns may be denied, as required by the City's Consumer Protection Law.

Mintz said he was sending a strong message to businesses looking to take advantage of consumers during the holiday season.

"Businesses can set their own policies and deny a return, they can even hire companies to track repeat-returners, but it is illegal to not disclose those terms before a purchase is made. It's good business practice, and it's the law," said DCA Acting Commissioner Jonathan Mintz.

In addition, the DCA settled violations with seven other retailers -- American Design Furniture, Best Buy (six stores), Best C&N Furniture, Bombay Company, Futon Warehouse, and Sharper Image -- for charging customers "restocking fees" without clear disclosure.

These companies paid the City a total of $4,250 and agreed to full compliance. "Restocking fees" are fees charged for items returned, but by law, they must be disclosed as part of the store's return policy before a purchase is made.

By law, retailers in New York City can establish their own return policies, as long as the policy is conspicuously displayed. Posted return policies must include any restocking fees that are imposed, as well as all reasons why a return might not be accepted.

If no policy is posted, the retailer must give the consumer 20 days to get a refund in the manner in which the purchase was paid. (This does not apply to food, perishables, custom-made or custom-finished goods, and items with defects that the consumer was made aware of when the sale took place).

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