A consumer bought a solar fan that turned out to be defective from its very first use. Within the same week, the consumer returned the fan to the seller and asked for a refund. But instead of refunding the money, the store unilaterally issued a credit note without obtaining the consumer’s consent. The consumer immediately disputed this decision verbally, but shortly afterwards faced health issues and was unable to pursue the matter further.
Nine months later, the consumer contacted the Office for Consumer Affairs to ask whether, despite the time that had passed, the consumer was still entitled to ask for a refund for the faulty solar fan. This situation raises important questions about the legality of credit notes, consumers’ rights when goods are defective, and whether under consumer law, sellers can issue credit notes instead of giving refunds.
When consumers return a faulty product to a seller within the two-year legal guarantee period, the law requires the seller to first offer a free repair or replacement. However, when these remedies are not possible or would cause the consumer significant inconvenience, the consumer can instead request a refund of the money paid for the defective product.
In such circumstances, consumers should not be obliged to accept a credit note, as this would mean getting less than they are legally entitled to. Notices displayed in shops, such as “No cash refunds” or any such form of company policy, have no legal effect as these policies cannot override or limit consumers’ statutory rights.
It is also important to note that once a consumer voluntarily accepts a credit note, they may lose the right to later request a refund.
In the case described above, the consumer maintains that they did not willingly accept the credit note and that they disputed it verbally at the time. It is important to note that any dispute with sellers should ideally be made in writing, as this provides evidence that the credit note was not accepted voluntarily. In this particular case, the consumer can reasonably justify the delay in pursuing the matter due to health issues, which should be supported by the relevant medical certificates.
“Once a consumer voluntarily accepts a credit note, they may lose the right to later request a refund”
In this situation, the consumer was advised to first notify the seller in writing of their complaint, clearly stating that they wish to return the credit note and receive a cash refund instead. If this written notification does not lead to an amicable resolution, the consumer’s next step would be to submit a formal complaint to the Office for Consumer Affairs at the MCCAA, so that the conciliation process can begin.
During conciliation, the seller would be reminded of their legal obligations and that imposing a credit note as the sole remedy was not compliant with consumer law. If the seller still refuses to issue a refund, with the consumer’s consent, the case can then be referred to the Consumer Claims Tribunal, where the consumer may present their case and seek a ruling in their favour.
While credit notes should not be used as a remedy for defective or non-conforming products, they can serve as a useful solution in cases where the consumer simply made the wrong purchase choice. In such situations, the consumer does not have statutory rights to demand a refund or exchange, so offering a credit note can be seen as an additional benefit or goodwill gesture from the seller. This allows consumers to select an alternative product without losing the value of their original purchase.
Once a credit note is offered, consumers must be clearly informed about how and by when it can be used. To prevent misunderstandings, the credit note’s terms and conditions should be printed directly on the note itself. It is then the consumer’s responsibility to read and adhere to these terms.
Consumers should pay particular attention to the expiry date and any restrictions on the credit note’s use, such as periods when it cannot be redeemed, for example during sales. They should also take care not to lose the credit note, as doing so could result in losing the value entirely. It is important to note, however, that if a seller refuses to provide a credit note for unwanted items, consumers do not have a legal right to demand one.
If consumers encounter any issues or have questions regarding their rights and responsibilities related to credit notes, they can contact the Office for Consumer Affairs at the MCCAA via the ‘Contact Us’ form on the authority’s website below. Alternatively, they can call the office on 8007 4400 or 2395 2000, or send a private message through the MCCAA Facebook page.
Odette Vella is director, Information and Research Directorate, MCCAA.
