Does your customer returns policy adequately deal with the return of defective goods?

Following the recent ECJ judgment in Christian Fülla v Toolport GmbH[1] ("the Judgment"), we advise consumer facing businesses to review their customer returns policies to ensure customers will not encounter any burden or significant inconvenience when returning defective goods. Whether the returns policy is adequate in this regard will depend on the goods in question.

The judgment is important because the ECJ provides a number of non-exclusive factors to consider when assessing whether a consumer may face a burden or significant inconvenience:

• whether it will be faster and easier for the seller to inspect the defective goods at its place of business or at the consumer's home;

• the ease with which the consumer can return the defective goods to the seller, particularly where the defective goods are very heavy, large, particularly fragile or have been installed;

• shipping costs;

• the value of the goods were they satisfactory; and

• the consumer's means of redress if the seller fails to reimburse.

The facts

In 2015 Mr. Fülla bought a tent from Toolport, by telephone for delivery to Mr. Fülla's place of residence. When the tent arrived, Mr. Fülla found that it was defective and requested Toolport provide a remedy. Toolport rejected Mr. Fülla's claims and subsequently Mr. Fülla brought proceedings against Toolport in the German Courts alleging that Toolport had made no attempt to provide a remedy. Toolport responded that Mr. Fülla had failed to make the tent available for repair to enable Toolport to determine an appropriate remedy if any would be required.

The Law

The Sales and Guarantees Directive (1999/44/EC) ("Directive") is silent on the issue of whether a consumer must return defective goods to a seller, or the seller must collect them. The Consumer Rights Act 2015 which transposes the Directive into English law is also silent in this regard. However the Directive, as transposed into German law, states that the consumer is required to return the non-conforming (i.e. defective) goods to the seller's place of business.  This meant that Mr. Fülla was required to return the tent to Toolport's place of business. 

The German court considered that although Mr. Fülla may be obligated to return the tent to Toolport's place of business, to place such an obligation on Mr. Fülla given the size and nature of the tent would be a significant inconvenience to Mr. Fülla, and could come at quite some expense. This was burdensome and inconvenient to Mr. Fülla and therefore appeared to be incompatible with the aims of the Directive. As such the German Court referred the question to the ECJ for clarification.

The Judgment

In its judgment the ECJ agreed with the German Court’s interpretation of the Directive that there is an obligation on the consumer to return the defective goods to the seller and agreed that the obligation shall remain with the consumer unless the obligation becomes burdensome and will cause a significant inconvenience to the consumer. It is at this point the obligation shifts to the seller.

The ECJ ruled that to require Mr. Fülla to return the tent to Toolport would be a significant inconvenience and would likely deter Mr. Fülla from seeking a remedy. Toolport should have either advanced the cost of return to Mr. Fülla or made alternative arrangements for return which would not have caused significant inconvenience to Mr. Fülla.

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[1] Christian Fülla v Toolport GmbH (Case C-52/18)  23 May 2019

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