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Wednesday, March 22, 2017

18 Common Questions in "No Return, No Exchange" Policy

As a consumer, are you familiar with "No Return, No Exchange" policy? We often see this posted in malls or printed in receipts. What did you do when you discovered that the new item you bought has a hidden defect? Have you tried to return it or leave it behind? Have you experience returning the defective item and never got a refund or new item in return? These are few questions in our mind that need an answer.  According to Department of Trade and Industry (DTI) here are the common questions, a consumer needs to know about their rights in "No Return, No Exchange Policy."


(Watch: "No Return, No Exchange" Policy : Does the law really allow it?)

As a consumer, are you familiar with "No Return, No Exchange" policy? We often see this posted in malls or printed in receipts. What did you do when you discovered that the new item you bought has a hidden defect? Have you tried to return it or leave it behind? Have you experience returning the defective item and never got a refund or new item in return? These are few questions in our mind that need an answer.

According to Department of Trade and Industry (DTI) here are the common questions, a consumer needs to know about their rights in "No Return, No Exchange Policy."


1. What is the legal basis of the prohibition on "No Return, No Exchange" Policy of business establishments?

Pursuant to the Implementing Rules and Regulations of R.A. 7394, or the Consumer Act of the Philippines, specifically Title III, Chapter I, Rule 2, Section 7 of Department Administrative Order (DAO) No. 2, series 1993, the words "No Return, No Exchange", or words to such effect shall not be written into the contract of sale, receipt or sales transaction, in any document evidencing such sale or anywhere in the store or business establishment.






2.What is the rationale for this provision?

The prohibition is aimed to correct the misconception of a lot of consumers that they do not have the right to return shoddy or defective goods or demand for remedies in case of defective or imperfect service because of the "No Return, No Exchange" notice in the receipts or anywhere in the business establishment.

3. Why is the presence of a "No Return, No Exchange" notice considered deceptive?

Such statement is considered deceptive because consumers may return or exchange the goods or avail of other remedies in case of hidden faults or defects, or any charge not known to the buyer. By provision of law, sellers are obliged to honor their implied warranties and grant corresponding remedies to consumers.

4. Can business establishments still issue Official Receipts with the "No Return, No Exchange"?

Business establishments with unused Official Receipts should erase or blot out the words "No Return, No Exchange" before issuing such receipts and henceforth, such words should no longer be printed on their receipts or anywhere in their business establishments.


5. If an item bought from Store Y turns out to be more expensive than a similar item in Store X, can the customer return the item and ask for a refund?

No, while the consumers have the right to choose and make a canvass of prices, once the sale is consummated and the product has no defect, one cannot return the goods nor ask for a refund.

6. Can the store exercise only a policy of exchange but no refund?

Consumers are entitled to either an exchange or refund, as long as there is a defect in the quality of goods or imperfection in the service.

7. If the defect is due to mishandling on the part of the buyer, can he still return the item and demand an exchange or refund?

No, the prohibition covers only hidden defects, shoddy goods or imperfect service.

8. If after buying a certain item, a customer changes his mind and wants to return said item, can he invoke the prohibition on "No Return, No Exchange"?

No, the prohibition is not an excuse for the consumers to return the goods because of a change of mind.

9. Is there a time limit within which a buyer may return defective products?

There is no hard-and-fast rule on the period within which a customer may return the products he purchased. A rule of reason should, however, be observed, taking into consideration the nature of the item purchased and the express/implied warranties mandated by law, i.e. the Consumer Act and the New Civil Code of the Philippines.

10. Can a buyer return defective goods without the Official Receipt?

The Official Receipt is the best proof of purchase. However, a buyer may still demand replacement or refund if he can prove that a defective item was bought from a certain store.

11. Can a store print in their invoices the statement "Exchange of merchandise will not be accepted without a valid receipt or other evidence of purchase"?

No, because there may be goods exclusively manufactured or sold by a company and there is no need to prove purchase of the item.

12. Can a store impose the condition that merchandise can only be exchanged once?

No, because merchandise can be exchanged as many times as these are defective as long as the consumer chooses the option of replacement.

13. What should a consumer do in case a store is found violating the prohibition on "No Return, No Exchange" policy?

  • He/She can file a complaint with the DTI, with the following information
  • The names and addresses of the complainant and the firm/entity being complained about
  • The acts or omissions constituting the offense including the approximate date, place and time of its commission;
  • The remedy he is seeking from the Department, other than damages
  • Any other relevant information the consumer may have regarding the matter.

14. Where should the complaint be filed?

All complaints should be addressed to the Provincial Office of the Department of Trade and Industry. Evidence available to the complainant such as the product bought, preferably unopened or sealed; photocopy of the receipt issued to him as evidence of the sale; advertising materials or brochures advertising the product; etc., should be brought by the complainant to the DTI Provincial Office.

15. What are the remedies available to consumers under the rules mentioned above?

The remedies available are:

  • For quality imperfection, the customer has the right to choose: · replacement of the product by another of the same kind in a perfect state of use
  • Immediate reimbursement of the amount paid; 
  • Proportionate price reduction;
  • For product quantity imperfection, the consumer may demand alternatively at his option:
  • The proportionate prices
  • The supplementing of weight or measure differential; 
  • The replacement of the product by another of the same kind, mark or model, without said imperfections; 
  • The immediate reimbursement of the amount paid, with monetary updating without prejudice to losses and damages, if any.

16. Can the statement "Exchange will not be accepted on an item in any way used, damaged or altered" be printed on invoices?

No, because there may be items which can be determined as defective only when used. Moreover, the right to determine whether goods are damaged or altered cannot be reserved exclusively for the company since this is a matter between the customer and the company.

17. Is the condition "Sale items are non-refundable" allowed?

This has the same effect as the "No Return, No Exchange" provision. However, in the case of sales promotions like "water or fire-damaged sale", the statement may be allowed provided the defects are apparent and visible to the consumer and that proper disclosure in the form of tags or notices are made at the time of purchase.

18. What is the penalty for violation of this provision?

The penalties are:

  • The issuance of a cease and desist order; 
  • The acceptance of a voluntary assurance of compliance or discontinuance from the respondent which may include any or all of the following terms and conditions:
  • An assurance to recall, replace, repair or refund the money value of defective products distributed in commerce;
  • An assurance to reimburse the complainant out of any money or property in connection with the complaint, including expenses in making or pursuing the complaint, if any, and to file a bond to guarantee compliance therewith. 
  • Restitution or rescission of the contract without damages; 
  • Condemnation and seizure of the consumer product found to be hazardous to health and safety unless the respondent files a bond to answer for any damages or injury that may arise from the continued use of the product;
  • The imposition of administrative fines in such amount as deemed reasonable by the Secretary, which shall in no case be less than Five Hundred Pesos (P500.00) nor more than Three Hundred Thousand Pesos (P300,000.00) depending on the gravity of the offense, and an additional fine of not more than One Thousand Pesos (P1,000.00) for each day of continuing violation.