Contents
When you’re selling goods, it is important that you know what your legal obligations are to your customers when it comes to returns, refunds and exchanges. With recent updates to consumer legislation in 2025, ensuring your policies are compliant has never been more critical to maintaining trust and avoiding disputes.
There are many reasons a customer might want to return something they bought from you – from the product being faulty or not matching its description, to the customer simply changing their mind or finding the item at a lower price elsewhere.
Under the Consumer Rights Act 2015 and subsequent amendments introduced in 2025, products bought in the UK are covered by automatic consumer guarantees that promise the products will perform as described and deliver the anticipated benefits.
If an item you sell fails to meet these guarantees, a customer may be entitled to request a repair, replacement, or refund. Your obligations will depend on whether the problem is deemed major or minor, so it is wise to familiarise yourself with the detailed criteria.
What Guarantees Apply To Your Products?
Each time a customer buys something, the consumer guarantees apply to that product. These guarantees not only help protect your customers but also provide clarity in resolving any post-purchase issues.
As the seller, you guarantee that your goods:
- Are of acceptable quality – this includes being safe, durable and free from faults;
- Are fit for the specified purpose;
- Match their description;
- Match the sample or demonstration model.
You are also guaranteeing that:
- You will honour any express warranties made; that is, any promises your business makes about the goods in relation to their quality, condition, characteristics, and performance;
- Your business has title to, and undisturbed possession of, the goods;
- There are no undisclosed securities on the goods;
- A means for repairs and availability of spare parts will be maintained for a reasonable period after purchase, unless the customer was advised otherwise.
When Do You Have To Provide A Customer With A Remedy?
When there is a major problem with a product you have sold, a customer is entitled to request a free repair, replacement, refund or even claim reimbursement for any associated damages or loss. In some cases, if the product has caused further consequential issues, additional compensation may be sought.
What Is A ‘Major Problem’?
It is important to know what constitutes a ‘major problem’ so your business can respond appropriately when a customer raises an issue. In 2025, the guidance clarifies that a product has a major problem if:
- It is unsafe to use;
- It is considerably different from its description or from any sample/demonstration model provided;
- It does not function as advertised or requested, and cannot be easily or promptly fixed;
- There is a significant issue that would have deterred the customer from purchasing it had they known.
If you have disclosed any defect to a customer before they bought the item, they will not be entitled to seek a remedy for that particular defect.
Returns
If a customer believes that there is a problem with a product they have purchased from you, they are entitled to return it. You must accept a faulty product even if its original packaging or labels have been removed and it has been used.
The customer is generally responsible for organising the return, provided it is reasonably straightforward. However, if a fault is found, you may be required to reimburse the customer for reasonable postage or transport costs. For further guidance on handling returns, you might find our guide to complying with consumer guarantees particularly useful.
If significant difficulty or cost is involved, you may need to collect the products at no extra charge to the customer – for example, with bulky items such as dishwashers, washing machines, dryers or large pieces of furniture like beds.
Ultimately, if no fault is found with the product, you may ask the customer to repay any costs incurred during transport or inspection. It is essential to provide a clear quote for any such costs in advance – and this estimate should be fair and not used as a tactic to deter legitimate claims.
When deciding whether to request customer repayment, consider balancing the financial implications against the potential impact on customer satisfaction and repeat business.
Refunds And Exchanges
Customers may also choose to request a refund or exchange if they encounter a major problem with a product. In such cases, if the customer opts for an exchange the replacement product should be similar to the original; and if they choose a refund, the reimbursement must equal the price originally paid and be processed in the same form as the original payment.
When issuing a refund or exchange, you may take into account the type of product, how it is typically used, and the period of reasonable use expected before any depreciation occurs. This ensures fairness both to your customer and your business.
Repairs
If an issue with a product is not deemed a major problem, you might consider offering a free repair. The repair must be carried out within a reasonable time frame, and customers are expected to accept the repair option.
Should you be unable to repair the product promptly or adequately, the customer may choose to:
- Repair the product elsewhere and pass the costs on to you;
- Request a replacement or refund;
- Claim compensation for the reduced value of the product compared to its original price.
Reimbursement For Loss Or Damages
You may also be required to reimburse customers for any loss or damage that they have suffered if you could have reasonably foreseen the problem occurring – for example, if you guaranteed a feature that you ultimately did not or could not deliver. The objective is to restore your customer to the position they would have been in had there been no issue with the product.
Reimbursements should cover only losses directly related to the defective product, and you are not liable for any damages or losses unrelated to your goods.
When Are Customers Not Entitled To A Remedy?
There are some circumstances where you are not legally required to provide a return, refund, exchange or repair. This is generally the case if:
- The customer was aware of the fault when buying the item;
- The product was damaged by the customer through unauthorised repair attempts;
- The customer has simply changed their mind.
Additionally, if the customer is unable to show proof of purchase (for example, a receipt, bank or credit card statement, or confirmation number), you are not required to provide any remedy for defective products. Maintaining robust records and a clear policy on proof of purchase can help safeguard your business.
Next Steps
Understanding your obligations under consumer law is essential when running a business-and with the 2025 updates, it is more important than ever to stay informed about your rights and responsibilities. Regularly reviewing and updating your policies can prevent disputes and ensure that you remain compliant with current legislation. For comprehensive guidance on your legal requirements, you can also read our article on Legal Requirements for Starting a Business.
If you’d like some help drafting your store’s T&Cs or ensuring you’re prepared to respond appropriately when a product issue arises, our team of experienced lawyers is here to support you. You might also explore our Website Terms and Conditions service to further protect your business.
For a free, no-obligations consult, reach us on 08081347754 or at [email protected].
As consumer laws continue to evolve, staying ahead of the curve is key. Regularly check our Industry Regulations guide and subscribe to our updates for the latest legal insights-ensuring that your business remains compliant and your customers stay confident in your service.
Meet some of our Consumer Law Lawyers
Get in touch now!
We'll get back to you within 1 business day.
Top 3 Legal Mistakes
Book in a free consultation with us to discuss your legal needs.
0 Comments on "Returns, Refunds and Exchanges: What Are Your Obligations? (2025 Updated)"