Should stores charge a restocking fee?

January 30 2010 by Ellen Roseman

Ten years ago, I did a series of columns on Future Shop’s unfriendly customer service policies. They had a 15-day return period and a 15 per cent restocking fee if you bought computers or accessories, camcorders or large-screen TV sets and returned them within the 15-day return period.

Future Shop soon revamped its policies, extending the return period to 30 days and socking the restocking fee. The Canadian-owned was trying to fend off a U.S. takeover, which happened anyway when Best Buy swallowed it up. But the customer service policies remained the same.

Now I’m seeing restocking fees used by other retailers. I believe these fees should be disclosed before you buy. Stores should post prominent signs on walls and at counters, so you know your return privileges are restricted.

Here are some stories about restocking fees below. I hope you’re going to ask questions when shopping, rather than being surprised when you’re expecting a full refund.

As for Future Shop/Best Buy, I still get complaints. (Many come from Red Flag Deals, where my name gets tossed around in discussion forums.) The company responds quickly to my requests and follows up to make sure customers are happy. Managers welcome complaints, knowing they can use the information to improve their business practices.

20 comments

  1. TRC

    Jan 31 2010

    Sears has come a long way from the last 100 years when you could return or exchange an item at its Canadian stores.

    We have twin boys and we purchased a Toshiba flat screen TV at Sears for Christmas. With some extra money, my wife decided to exchange the Toshiba and buy two larger and more expensive Sony TVs (at Sears on her card) so each boy could have his own.

    She was astounded that Sears wanted to charge a 20 per cent restocking fee for the first TV that was never out of the box.

  2. LK

    Jan 31 2010

    I recently returned a $450 toilet to the Home Depot and I was charged a restocking fee. That’s to be expected, but I was also charged GST and PST on the restocking fee of $76.51.

    Upon checking with both provincial and federal tax departments, I was informed that the GST can be charged but companies are not allowed to charge the PST.

    I returned to Home Depot and asked for the PST to be refunded. They were not aware of this fact and did not know how to give me this rebate, as their computer was not set up for such a transaction.

    I even provided them with the Ontario Tax Department’s telephone number to call, just in case they did not believe me.

    After some time, I received my rebate of $5 plus. If many companies are doing this, one can imagine how much tax is being collected that belongs to the consumer.

    ————————————————————

    Tiziana Baccega, Home Depot spokeswoman:

    Here is the information we have:

    The Ontario Ministry of Finance policy states: “Restocking charges for those sales that have been cancelled in part or in full are taxable. This policy applies even if the restocking charges have been billed separately.”

    We can get a letter ruling from the Ministry but this will take some time.

  3. LT

    Jan 31 2010

    I bought a MacBook in September 2006, and its hard-drive failed a few months later. Many of the MacBooks were having this issue at the time.

    My MacBook was under warranty, so I took it into Apple to get it repaired. Unfortunately, I was not able to get back any of my data (including years worth of memorable photos and academic work). This was partially my own fault as I had relied on my MacBook, rather than making a backup.

    However, my next loss was traumatic. The service employees at Apple made a mistake, and gave me SOMEONE ELSE’S computer, which most likely had fundamental issues. That’s why it was in the service centre in the first place.

    Nevertheless, I did not realize this as my data had been erased so I had no files, and all MacBooks look the same.

    This MacBook gave me numerous problems, and I had to take it for repairs again and again. At this time, the computer was still under warranty and I asked to renew my warranty, but the Apple employees told me I was unable to do so (this was also mistaken).

    It was only when I took it in for another set of repairs the following year, due to the persistent problems, that a service employee asked if I had two MacBooks. I said no, and he looked perplexed, asking why this one had another serial number.

    Only then (after the warranty time had been exhausted) did I realize the huge mistake that had been made. I was in Japan at the time teaching English. Due to the language barrier, I could not raise my issue effectively.

    I tried several times by going to all Apple locations in Tokyo, but without much success.

    I arrived back to Canada in September, and I pursued my case in Toronto. After months of waiting, I received the final response from Apple on behalf of a Customer Relations employee.

    He admitted that Apple had made the mistake and had given me the wrong computer, but he said there was nothing he or anyone at Apple could do.

    This is why I am seeking your assistance. I do not want ANYON to be in my shoes. I spent over $1,500 in 2006 (which was worth even more then) as a university student with OSAP loans in an attempt to get a “quality” product.

    What I received was a computer that functioned merely for a few months, then failed, and then was replaced with another individual’s non-functioning computer.

    Since then, I have tried my best, through the avenues that were open to me, to receive quality service from Apple. Unfortunately, they also failed me in this respect as well.

    ————————————————————

    One day later:

    Thanks so much for following up with my case. Apple has offered me a new MacBook, and although I would have preferred a refund, I decided to take it.

    I would appreciate it if you could write something about this regardless, as I do not want consumers to be in my shoes, without knowledge of what to do.

    I only found out about your column yesterday through a colleague – I’m so glad I did. I have been without a laptop for over a year, which although not a necessary everyday item, is quite convenient to have.

    So, I would like consumers to know there ARE avenues they can pursue if they have issues. I would like to thank you again for the work that you do, and say sincerely that it is deeply valued.

  4. GBL

    Jan 31 2010

    Re-stocking fees seem to be the norm now and though I understand the fee to some extent, I agree that they should tell you. What concerns me is that some stores seem to have a policy of “charge the customer unless they complain”, taking advantage of customers who don’t know any better or who trust that the store won’t take advantage of them. Until I pointed out to one large department store that charging a re-stocking fee for a brand-new defective appliance implied that they would be selling said defective appliance again. They didn’t charge me the fee, but bet they would have if I hadn’t questioned it.

  5. Ed

    Feb 5 2010

    Kudos to Shannon Kidd (Ellen’s Future Shop contact) for quickly resolving customer complaints, but it’s a real shame that so many of these issues can’t be solved right away by the reps or managers in-store. Is that how Future Shop / Best Buy works; give the customer the runaround until the customer goes public?

  6. Bonnie-Lynn Kennedy

    Apr 11 2010

    Hi Ellen, I got advice from a friend to leave my complaint about Sears with you.

    I returned a TV today to find out I was charged $105 for a restocking fee. The TV was not damaged and we packed everything back into the box the way we received it.

    I was told by the salesman that all stores have this policy. He apparently lied to me as Future Shop informed me that same day as they no not have this policy.

    I was not informed of this “restocking fee” when I bought the TV and there was no mention that I would be charged with this fee if I returned the TV also.

    I feel Sears should advise the customer of this fee when they purchase items, as I’m sure no one is aware of this. I’m sure you would agree.

    As of today I will no longer be a customer of Sears and my sears mastercard is now in little pieces in the garbage.
    I would stongly recommend every one ask about hidden fees when purchasing items from Sears.
    I also feel the salesman in the electronics dept.should know the real facts about other store policies before lying to Sears customers.

  7. Miranda

    May 17 2010

    As an employee of a large retail store, I find people silly in that they expect to rent an item for a period of time, and be able to return it whenever they want for a full refund.

    It is because of people taking advantage of return policies that companies have to implement these restocking fees. Many stores have the policies posted on the wall at the customer service desk and on the back of ALL receipts printed. It is up to the customer to check on the policies if they have no intention of keeping the item or want to test it out.

    It is also not up to the employees to stand there every time a customer wants to purchase something and repeat the return policy again. If a customer inquires about the policy, employees are required to provide them with the correct information. It is up to the sales person to sell the merchandise, not give people information on how to return the item.

    I disagree with customers having to pay restocking fees on defective merchandise, or items that are unopened, but if someone uses a Nintendo Wii for 2 weeks and then wants a refund, there is an issue with that! Why should the retailer take a hit continuously when a customer wants to rent an item?

  8. Rai Demopoulos

    Dec 7 2010

    It is my understanding that should a customer change their mind about a contract to purchase a service or a product, they have 24 hrs within which to cancel the service or product, no matter where or in which store they have purchased it.

    This may be a consumer protection law in Ontario only, or it may be Canada wide.

    Could you comment on, or confirm this for me please.

    Thank you, Rai

  9. SA

    Jul 12 2012

    Should stores charge a restocking fee for cancelled orders that have not yet been shipped, or delivered? what if they did not inform you of the policy?

  10. Paul

    Jan 28 2013

    Companies are doing this, even if it’s illegal. They are betting on you not having legal recourse.

    By the time somebody sues them on this or complains they’d have made a profit on that policy…usually enough to pay off any arbitrary fee, with lawyers on retainers, this is not the exception….it’s business as usual.

  11. Ursula K

    Jan 29 2015

    Hello, Ellen. I did a search on this topic, which led me to your site.

    I am experiencing grief from a vendor in Whitby. I ordered a Lenovo laptop from Newegg via the internet. After I placed my order and it came, the seller’s name was different. As I realize now, they obviously are a 2nd or 3rd party vendor.

    The laptop came without Windows 8, which was advertised to be included. (This laptop has Windows 7 pre-installed.)

    I had some difficulty trying to relay that concern to them. They finally said via email they would send it to me.

    I also told them that the laptop is experiencing problems every time it has to start up. This happened the first day I received it and continues. I have only had this item for 6 days and it is clearly defective.

    When I finally got through to them and requested a refund, they finally agreed. However, they claim I have to pay a 15% restocking fee. I think that is absurd. I just didn’t change my mind. The product doesn’t work!

    It’s bad enough I have to pay the shipping costs as well. They are located close to me, as I live in the Durham region. They said I cannot drop off or pick up any products because they are not a retail outlet. What kind of way is that to do business?

    I researched their address and it turns out it is a house in a residential area. What is your opinion on this and do you have any advice for me? I paid by credit card and am thinking of contacting the card issuer, as well as the Better Business Bureau.

    I’ve NEVER been charged such a fee when returning anything back, either electronics or other items from Best Buy, Home Depot, Canadian Tire, Walmart and other stores. That’s my dilemma. Thank you for your time.

  1. Stupid return policy to hide employee theft?