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GIFT REMORSE, TAKE BACKS OR RETURNS

The joy of Christmas giving has passed and many recipients and even givers are having second thoughts. Can that gift be returned to the store? Or, if the relationship has soured, can a gift be taken back by the giver?

There are not a lot of laws concerning returns or exchanges. Federal laws are virtually nonexistent. That leaves regulation to the states. Florida has only one statute that directly addresses exchanges or returns.

Section 501.142 Florida Statutes confirms that regulation of refunds is preempted to the Department of Agriculture and Consumer Services, notwithstanding any other law or local ordinance to the contrary. That means, the State regulates refunds by retail establishments. The statute requires every retail sales establishment that offers no cash refund, credit refund or exchange of merchandise to post a sign so stating at the point of sale. Failure to post a "no refund" sign means a refund or exchange policy exists and the policy must be presented in writing to a consumer upon request.

If a store fails to comply with the statute, the store must provide a refund to a consumer for return of an unused item in the original carton and proof of purchase within 7 days of the date of purchase. The statute specifically states a retail establishment can adopt a longer time for refunds. The statute does not apply to sale of food, perishable goods, goods which are custom made, goods which are custom altered at request of the customer or goods which cannot be resold by the merchant because of any law, rule or regulation adopted by a governmental body.

What this means to the consumer is that right to return or refund is not automatic and can vary from store to store. Those return policies can include deadline for return, restocking or processing fees and even form of refund (i.e. a store credit rather than cash). The retailer can also include conditions such as the item has to be in original packaging or with tags.

Some major retailers are even tracking customer returns through a third party service, The Retail Equation. Monitoring is purportedly an effort to reduce retail fraud, which is estimated to cost U.S. businesses $9 to $17 billion per year. Returning a duplicate item or one which you take home and find does not really "fit" is not the problem. Return fraud includes return of stolen merchandise, merchandise purchased with fraudulent or counterfeit tender, return using counterfeit receipts, return of exchange merchandise (a customer replaces the item with a broken one customer already had and returns it for a refund), and return of used merchandise (i.e. a gown someone buys and wears once, then returns).

By monitoring the frequency of returns, retailers are either using the retail equation to reduce return fraud or as an excuse to eliminate cost of dealing with customers who frequently return items. It is reported that retailers are blacklisting certain customers who cross a threshold of returns. Those customers may find their request to return an item refused.

Even the pure at heart with good intent can find it difficult, if not impossible, to return items to a store after the holidays. That means if you believe return is a possibility, you should consider asking the retailer for copy of its return policy.

What about something that is broken? Florida does have a law on that, as does virtually every state under what is known as the Uniform Commercial Code ("UCC"). The UCC is a set of laws proposed by the National Conference of Commissioners on Uniform State Laws to help advance commerce. It is believed to be in the best interest of interstate businesses to deal with identical laws from state to state. Different states have adopted different versions of the UCC and have tweaked them, but may have generally been adopted in a manner that makes them similar from state to state and easier for business to operate interstate.

Article 2 of the UCC addresses sales. That article provides a warranty that goods are merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. The goods must meet the contract description, be of at least fair or average quality, fit for the ordinary purposes for which the goods are used and conform to any promises or affirmation of fact made on the container or label. If a consumer gets the item home and finds it is broken, the consumer can take it back and get a refund, unless the item is sold "as is". Absent similar language, even items purchased on sale can be returned under the UCC if they turn out to be defective.

That pretty much sums up the consumer's take back rights. What about those of a gifter? There are times when an expensive gift is given, but the relationship sours immediately after and the gifter wants return. Most of the time, the gifter is out of luck. Elements of a gift are (1) present donative intent, (2) delivery and (3) acceptance. Donative intent only has to exist at time of delivery and acceptance. Change of mind or heart will not usually matter

Where the donor lacks mental capacity or is the victim of undue influence, it is possible to reverse the gift because legally sufficient donative intent did not exist. The expression of intent to make a gift in the future does not qualify as present donative intent and us not enforceable. If an item is placed with a third party to hold until directed to deliver the gift, delivery has not taken place (the donor can require its return). Delivery to make a gift must be to the donee and provide the donee with immediate right to possession.

A conditional gift may be reversed if the condition is not met. The best example of a conditional gift is an engagement ring, which is given on the condition that marriage will follow. Florida cases confirm that when the planned marriage is terminated by the recipient of the ring or by mutual consent, the ring giver is entitled to return of the ring. That was the holding in the 1975 Florida case of Gill v. Shively. But, that case did not specifically address what happens to the ring when the person giving the ring calls off the wedding. Although there is no Florida appellate case directly on point, most believe that Florida follows the majority of states and would agree the ring goes back to the giver no matter who calls of the marriage. Until there is a clear case on point, Florida might side with those states that rule the person breaking the engagement loses the ring.

Many happy returns is the norm, but not guaranteed when dealing with retailers. Consumers should not count on an unfettered right to refund, credit or exchange. Those giving gifts face an even harder time getting them back.

William G. Morris is the principal of William G. Morris, P.A. William G. Morris and his firm have represented clients in Collier County for over 30 years. His practice includes litigation and divorce, business law, estate planning, associations and real estate. The information in this column is general in nature and not intended as legal advice.

Categories: Articles, Divorce