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Everything you need to know about reversing a transaction

Everything you need to know about reversing a transaction

Did you know there are 3 statutory cooling-off periods to protect consumers?

There are 3 statutory cooling-off periods to protect consumers. The right to a cooling-off period enables consumers to reverse a transaction without any penalty. These 3 cooling-off-periods are prescribed by the Consumer Protection Act 68 of 2008 (CPA), the Electronic Communication and Transaction Act 25 of 2002 (ECTA) and the Alienation of Land Act 68 of 1981. Each of these prescribed cooling-off periods describes its duration, their contextual definition of a consumer, the exceptions, cost, risks and applicable time periods.

1. The Consumer Protection Act

Cooling-off period: Within 5 business days from concluding the transaction or delivery of the goods.

Transaction applicable: Direct marketing – when a supplier approached a consumer in person, by mail or electronic communication for the purpose of promoting any goods or service or requesting a person to make a donation. This must, however, be in the ordinary course of business of the supplier.

Consumer: Individual or natural person, sole proprietor or juristic person with a turnover or asset value below R2 million per annum.

Exceptions: Goods that may not be returned due to public health and goods that were partially or entirely disassembled, physically altered, permanently installed, affixed, attached, joined or added to, blended or combined with or embedded within other goods or property.

Cost: No penalty for consumer. The only fees that may be charged is the reasonable use of the goods if used – unless use was to determine whether goods were acceptable and the reasonable restoration cost for packaging.

Risk of Returning: At the consumer’s own risk and expense.

Time period for refund: Within 15 business days from cancelling in writing.

2.  Electronic Communication and Transaction Act

Cooling-off period: Within 7 calendar days from concluding the transaction or delivery of the goods.

Transactions applicable: All electronic transactions (online transactions) between a supplier and a consumer.

Consumer: Any individual or natural person.

Exceptions:

  • Financial services including but not limited to: investment services; insurance and reinsurance operations; banking services and operations relating to dealings in securities.
  • By way of an auction.
  • The supply of foodstuffs, beverages or other goods intended for everyday consumption supplied to the home, residence or workplace of the consumer.
  • Services which began with the consumer’s consent before the end of the 7 day cooling-off period.
  • Where the price for the supply of goods or services is dependent on fluctuations in the financial markets and which cannot be controlled by the supplier.
  • Where the goods are made to the consumer’s specifications, are clearly personalized and by reason of their nature cannot be returned or are likely to deteriorate or expire rapidly.
  • Unsealed audio or video recordings or computer software.
  • Newspapers, periodicals, magazines and books.
  • Gaming and lottery services.
  • Accommodation, transport, catering or leisure services and where the supplier undertakes, when the transaction is concluded, to provide these services on a specific date or within a specific period.

Cost: No penalty for consumer. The only fee that may be charged is the direct cost of retuning the goods.

Risk of Returning: At the consumer’s own risk and expense.

Time period for refund: Within 30 calendar days of cancellation in writing.

3. The Alienation of Land Act

Cooling-off period: Within 5 business days from when purchaser made the offer to purchase immovable property.

Transactions Applicable: All transactions for the offer to purchase land or a deed of alienation in respect of land.

Consumer/Purchaser: Any individual or natural person

Exceptions:

  • If the purchase price of the land, or the price offered for the land by the prospective purchaser contemplated in that subsection, exceeds R250 000.
  • The purchaser or agent contemplated has purchased the land at a publicly advertised auction.
  • The seller and purchaser have previously entered into a deed of alienation of the same land on substantially the same terms.

Cost: No penalty or cost for the purchaser.

Risk of Returning: Risk will be on the seller of the property.

Time period for refund: Within 10 business days from cancelling in writing.

 ABOUT THE AUTHOR

Werner Brückner is the Provincial Manager for SEESA Consumer Protection & POPI at the SEESA Cape Town office. He obtained his LLB degree cum laude from the University of Pretoria in 2002, after which the attended School for Practical Legal Training at University of Pretoria. He is an admitted attorney, notary and conveyancer of the High Court of South Africa. Prior to joining SEESA Consumer Protection & POPI in 2010, he worked as a SEESA Labour Legal Advisor in Cape Town since 2004.

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