What is the legal basis of the prohibition on the " 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, specially Title III, Chapter I,
Rule 2, Section 7 of Department Administrative Order 9 (DAO) No.
2, series 1993, the word " 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.
Q. What is the
rationale for this 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.
Q. Why is the
presence of a " NO RETURN, NO EXCHANGE " notice considered
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.
Q. Can business
establishments still issue official receipts with the " NO RETURN,
NO EXCHANGE" notice?
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 in their receipts or anywhere in their business
Q. 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?
consumers have the right to choose and make a canvass of prices,
once a sale is consummated and the product has no defect, one
cannot return the goods nor ask for a refund.
Q. Can a store
exercise only a policy of exchange but not refund?
entitled to either an exchange or refund, as long as there is a
defect in the quality of goods or imperfection in the service.
Q. 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?
prohibition covers only hidden defects, shoddy goods or
Q. If after
buying a certain item, a customer changes his mind and wants to
return the said item, can he invoke the prohibition on "NO RETURN,
prohibition is not an excuse for the consumers to return the
goods because of a change of mind.
Q. 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 New Civil Code of the Philippines.
Q. Can a buyer
return defective goods without the official receipt ?
Receipt is the best proof of purchase. However, a buyer may
still demand replacement or refund if he can proved that a
defective item was bought from a certain store.
Q. : Can a store
print in their invoices the statement "EXCHANGE OF MERCHANDISE
WILL NOT BE ACCEPTED WITHOUT A RECEIPT VALID OR OTHER EVIDENCE OF
No, because there
may be goods exclusively manufactured or sold by a company and
there is no need to prove purchase of the item.
Q. Can a store
impose the condition that merchandise can only be exchanged once?
merchandise can be exchanged as many times as long as these are
defective and the consumer chooses the option of replacement.
Q. What should a
consumer do in case a store is found violating the prohibition on
the "NO RETURN, NO EXCHANGE" policy?
He / She can file
a complaint with the DTI, with the following information:
- the names and
address of the complaint and the firm / entity being
- the acts or
omissions constituting the offense including the approximately
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 be regarding the matter.
Q. Where should
the complaint be filed?
should be addressed to the Provincial Office of the Department
of Trade and Industry.
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
Q. What are the
remedies available to consumers under the rules mentioned above?
- For quality
defects, the customer has the right to choose:
- Replacement of
the product by another of the same kind in a perfect state for
reimbursement of the amount paid;
- For product
quantity imperfection, the consumer may demand alternatively at
supplementing weight or measure differential;
replacement of the product by another of the same kind, mark
or model, without said imperfections;
reimbursement of the amount paid, with monetary updating
without prejudice to losses and damages, if any.
Q. Can the
statement "EXCHANGE WILL NOT BE ACCEPTED ON ITEM IN ANY WAY USED,
DAMAGED OR ALTERED" be printed on invoices?
No, because there
may be items which can 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.
Q. 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.
Q. What is the
penalty for violation of this provision?
- A. Criminal
A fine of not less than five hundred ( P500.00 ) pesos but
not more than twenty thousand pesos ( P20,000.00 ) or
imprisonment of not less than three (3) months but not more than
two (2) years or both, at the discretion of the court: Provided,
that, if the consumer product is one which is not a food,
cosmetic, drug, device or hazardous substance, the penalty shall
be not less than two hundred pesos (P200.00) or imprisonment of
not less then one (1) moth but not more than (1) year or both at
the discretion of the court.
Imposition of administrative fines in such amount as deemed
reasonable by the Secretary, which 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 violations. (Please
refer to Article 164, Consumer Act, for other Administrative