Don’t just accept a voucher instead of a refund when a service was cancelled or not delivered

2014-03-25 00:00

CONSUMERS have complained recently about companies offering “credit vouchers” rather than refunds after the customer either cancelled a service or a service had not been delivered as promised.

The following two cases clarify a consumer’s rights when this happens.

Sharon Bax bought a R308 Groupon Voucher for a meal for six at Phuket Thai in Lagoon Drive in Umhlanga last October that was valid until January 22. But when she repeatedly tried to make a booking with the restaurant in December and January, by phone and e-mail, she could not make any contact.

Eventually, Bax said she decided to take a chance and arrived at the restaurant one evening in January, only to be advised that the restaurant had changed ownership and the voucher was no longer valid. The restaurant has since closed and even the listed cellphone number appears to no longer be in use.

“Why did they take the deal on if they were going to close? And why didn’t they notify us that Phuket Thai is going to close and say please contact us for a refund? They are quite good at telling you that your voucher is going to expire, so they could have sent a message,” Bax said.

Bax said she had repeatedly e-mailed Groupon to complain and to ask for a refund, and the company agreed to give her an online “credit voucher” to spend with the company.

“I thought where on earth am I going to find this credit on the computer? It is not a refund because you are forced to buy something else,” Bax said.

“I made at least a dozen phone calls and sent repeated e-mails last week to the company’s head office in Cape Town to resolve this issue, but was repeatedly stonewalled by staff who declined to give me access to senior management.

“Eventually, the company’s communication specialist Erin Yeager responded to my e-mailed questions regarding the customer’s request for a refund, which I had asserted that the customer was entitled to in terms of the Consumer Protection Act. Yeager said that Groupon’s policy when a business closed was to ‘always have the customer’s back and to honour a refund’.

“In this particular case, we had issued a credit refund in January [per the policy at the time]. Our policy changed in February, and we have since issued the cash refund, which may take up to five business days to process,” Yeager said.

The second case was rather different and involved consumer Robyn Knowles’s cancellation of an Intercape bus ticket a week before departure on March 10.

“I need to cancel that ticket. Does the company legally have the right to refuse me a refund?” Knowles asked.

The company had responded to her request for cancellation and refund saying that the “Saver” ticket that she had bought was non-refundable but that the company would give her a credit voucher less 10% of the purchase price.

When she, on my advice, insisted on a cash refund less the 10%, citing her rights under the CPA call centre, staff still pointed her to the fine print on the ticket advising that she had agreed to the terms and conditions.

I took the matter up with Intercape’s head office and the company’s corporate counsel Advocate Roelien van der Walt responded.

“We confirm that, in line with the Consumer Protection Act, a ticket is indeed refundable less the cancellation fee. We do offer vouchers. However, where a passenger declines a voucher, the ticket price, less the cancellation fee, is paid,” Van der Walt said.

“We confirm that while there was an initial misunderstanding in this particular circumstance, that it was cleared and the passenger received her refund.”

Consumer Goods and Services Ombudsman Neville Melville, speaking generally of similar cases, said suppliers are entitled to charge a cancellation fee.

“The CPA is silent about returning the balance in cash, but this is a clear implication,” Melville said.

But here’s the caveat.

“A supplier would be entitled to increase the cancellation fee the closer it came to departure time. Bear in mind that if the supplier does give cash instead of a coupon, they are likely to hold back a bigger percentage than 10% as a cancellation fee. They may even be justified in holding the entire fee for a no show or if cancellation is given, hours before departure and they cannot find another passenger,” Melville said.

However, regarding cases where services were not rendered as promised, Melville said a 100% refund, as was the case where a business had closed, would be the appropriate redress.

Send your consumer issues to Lyse Comins at

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