Giving refunds after ceasing trading?

Question

I need a little help with a query.
My online business has now ceased trading - (the website has been sold and is now trading under a different name and selling different products).
A customer purchased a pair of prescription glasses from us in the middle of July 2010. They were sent the frames try on and were supposed to then return the frames to us to have the lenses fitted. The customer sent the glasses back in October (3 months later) but we were no longer trading so the glasses frames were not signed for (as we do not rent the unit any more) and got returned to the customer. They then got in contact with the new owners of the website who forwarded the customers details to us. I emailed the customer at the beginning of November to explain we were no longer trading and offered a full refund - I asked them to confirm the original order number or date and the address they wanted the refund cheque sent to. As of today (13th December) I have heard nothing.
It has now been 5 months since the original order and 5 weeks since the offer of a refund. We are paying to keep our business bank account open. How long do I have to give before I no longer have to honour a refund?
(Sorry for the rambling story!)

SimonC · Accepted Answer

I assume you were self employed (ie not a ltd company)? If so then you were the business, and so are personally liable for all debts etc. This liability does not stop just because you stop trading, so you are doing the correct thing in dealing with this customer now.

From a purely practical point of view, you don't have to make the refund from your business account. It could come from any bank account you choose, so if the main issue is the cost of the business account then close it now and save the money.

The length of time you have to give to honour the refund depends entirely on your original sale contract with the customer. EG:

Did they pay for the frames which gave them an option to return the frames and pay an additional sum for the lenses? If so, your contract for the sale of the frames is complete, and the customer is well outside of any period in which they are legally entitled to a refund under the Distance Selling Regulations (DSRs). You are no longer in a position to enter into a new contract for lenses. So, although unfortunate for the customer, you are not bound to refund anything.

If the process was similar to above, but the original contract specified a time period during which lenses would be available, then you have to give a full refund if you are still within the time period.

Alternatively, did you charge up front for the full cost of frame and lenses? If so, its almost certain that you are bound to refund the full cost no matter how long the customer takes to respond (up to the 6 year legal limit for them to sue you!). Even if you had specified a time period within which the customer had to respond, it is possible that this would be deemed unfair, and so void, unless this term was very clear, and gave the customer a good deal of time to make their choice.

jwgreetings · Answer

You don't have to honour the refund if the refund end date was like 28 days after purchase. However it is professional and humble of you to offer the customer a full refund. If you have not heard from the customer then email them once again stating the urgent of a response. If no answer you have no option but to do what you have to, plus if you are paying to keep you account open just based on this 1 customer refund then you know then only you  know how long you can afford to do this. If you have an address for the customer you could send them a cheque recorded delivery for your peace of mind,

Apart from that there's not much more you can do, you've done quite a lot already considering the business is not trading any more.

I hope this help.

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Giving refunds after ceasing trading?

2 Answers