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Covid-19 cancellations: A blanket 'no refunds' policy is against the law - Ombud

18 March 2020 6:12 PM

The Consumer Goods and Services Ombudsman says the Covid-19 pandemic should force suppliers to review their cancellation policies.

As bookings and events get called off amid the global outbreak, Ombud Magauta Mphahlele says that suppliers must ensure that their cancellation policies are in line with the Consumer Protection Act (CPA).

Many businesses, organisers and service providers have opted for the postponement route in a bid to minimise disruption and financial losses, explains consumer journalist Wendy Knowler.

However, Mphahlele says suppliers cannot impose a postponement on a consumer without the option of a refund.

She explains that there are scenarios where postponements do not work, adding that a consumer is under no obligation to accept a postponement where it is not possible.

In addition, she says cancellation penalties should only apply when suppliers can prove the costs that have already been incurred.

We have seen a few cancellation policies that are saying no refunds.

Magauta Mphahlele, Consumer Goods and Services Ombudsman

They cannot just have a blanket policy of no refunds or issue vouchers.

Magauta Mphahlele, Consumer Goods and Services Ombudsman

Although the cancellation penalty is not prescribed, there are criteria that one has to meet in determining the penalty.

Magauta Mphahlele, Consumer Goods and Services Ombudsman

While consumers are entitled to refunds, Mphahlele advises that this is unchartered territory for all parties.

She stresses that it's important for both consumers and suppliers to be reasonable as the pandemic poses a real threat to the South African economy.

The legalities weren't devised for this sort of situation at all. It's very much unchartered territory.

Magauta Mphahlele, Ombudsman for Consumer Goods and Services

It's an opportunity for suppliers to review their cancellation policies to see that they are in line with CPA.

Magauta Mphahlele, Consumer Goods and Services Ombudsman

Mphahlele and Knowler join CapeTalk host Pippa Hudson to discuss the complexities of Covid-19 cancellations using various cases.

The airline or conference organiser or wedding venue didn’t cause any of this either. They are also victims.

Wendy Knowler, Consumer journalist

Listen to the advice and open line on ConsumerTalk for more:

Every Wednesday, on The Pippa Hudson Show, Wendy Knowler provides useful insights and tips on how to make the most of your buying power.

For more stories visit the ConsumerTalk feature page.

Got a consumer case you need help resolving?

Email: consumer@knowler.co.za, put Cape Talk in the subject line, followed by the issue e.g. cellphone contract dispute.

Subscribe to our Business Wrap Newsletter


18 March 2020 6:12 PM

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