The MapleMoney Show » How to Spend Money Wisely » Shopping

Returns 101: Everything You Need to Know About Refunds and Exchanges, with Ellen Roseman

Presented by Wealthsimple

Welcome to The MapleMoney Show, the podcast that helps Canadians improve their personal finances to create lasting financial freedom. I’m your host, Tom Drake, the founder of MapleMoney, where I’ve been writing about all things related to personal finance since 2009.

Have you purchased something that you had to return because it didn’t fit? Maybe you don’t need that fifth Crock Pot you got for Christmas and want to take it back to the store.

My guest this week, Ellen Roseman, is a personal finance writer and consumer advocate. She guides us through the often murky world of retail shopping returns. Ellen explains why it’s important to ask up front about a store’s return policy, to make sure you fully understand it.

Did you know? If you can’t get a refund from the retailer or manufacturer, try going back to your credit card company.

Ellen and I discuss how credit card companies often provide additional protection to consumers through extended warranties and zero liability policies.

As a result, you may be better off paying for certain items with a credit card as opposed to debit, providing you are paying the balance in full each month, and avoiding the high interest charges.

Ellen provides us with a number of helpful tips. For example, when returning an item with a gift receipt, make sure you are receiving a refund of the original purchase price, not the current price, which can often be lower by the time it’s returned.

Our sponsor this week is Wealthsimple. Are you a socially responsible investor? If so, Wealthsimple can help you build a portfolio that focuses on low carbon, clean tech, human rights, and the environment. Get started with Socially Responsible Investing (SRI) by visiting Wealthsimple today!

Episode Summary

  • Do consumers have a right to a refund or exchange if a product is defective?
  • A retailer has a legal responsibility as the intermediary between the consumer and manufacturer.
  • Stores have no obligation to notify you verbally of their refund policy, don’t be afraid to ask about it.
  • Many retailers try to keep details of their return policy under wraps.
  • What makes Costco’s return policy so great.
  • Why paying with a credit card can be better than with debit.
  • Places to look for a store’s return policy.
  • Many industries are notorious for having poor return policies.
Read transcript

Did you buy something and have to return it because it doesn’t fit? Or maybe you don’t need that nice crock pot you got for Christmas and want to take it back to the store? What are your rights? What are the time limits? Ellen Roseman guides us through the sometime frustrating, sometimes mysterious world of refunds.

Welcome to the Maple Money Show, the podcast that helps Canadians improve their personal finances to create lasting financial freedom. Socially responsible investing means investing in companies that do social or environmental good. No sin stocks here. Wealthsimple, the sponsor for today’s show, can help you build SRI portfolio of ETFs with a focus on low-carbon, clean deck, human rights and the environment. Feel good about your investing by heading to Now, let’s catch up on Ellen’s years of refund stories and actionable advice…

Tom: Hi Ellen, welcome to the Maple Money Show.

Ellen: Hi Tom.

Tom: I wanted to have you on today to talk about refunds. Everybody’s had this at some time where they’ve wanted to return something and they’ve probably hit some kind of road block. The first thing I was wondering is if people have an actual right to a refund or exchange if it’s defective?

Ellen: Yes, they definitely should be able to return it if it’s defective under Provincial law which is a little different for different provinces. But, most of them do say you do not have a right to a refund or exchange if you change your mind and stores make their own policies on that. But if the item doesn’t work right out of the box, or even later—sometimes it comes with a 30 or 60 day return period. But suppose it is 62 days and it just stops working completely, even if it’s a small item, you have the right to give it back because you can reasonably expect that something they sell works for longer than two months.

Tom: Okay. So, if the receipt says, “Return in 30 days” that’s not necessarily the case with a defective item then?

Ellen: Well, often what they’ll say is you have to deal directly with the manufacturer. And you can try that but the manufacturers tend to be bigger, they’re at one remove. Under the law, the retailer is the intermediary. They’re the ones you deal with. You don’t buy directly from the manufacturer, you buy through a retailer and the retailer should be responsible for this stuff. They can tell you to deal with the manufacturer but if negotiations break down then you go back to the retailer. Sometimes the manufacturer has gone out of business or they just have terrible policies. Take gift cards for example. There has been a problem for many years where you buy a gift card from a retailer and you find out that the gift card has expired—not expired, it’s been partially used up so you go back to the company that put it out. They’re not always reachable so the retailer should be responsible. They’ve put it on the racks and according to what I’ve read a lot of the problems with gift cards come from employees or customers getting the numbers through the packaging at the retail level. So they’re not displaying it properly.

Tom: Oh, that’s what I was thinking; it’s some type of fraud. Someone is actually using that card and—

Ellen: Yes!

Tom: Oh, wow. I never even thought of that. You mentioned expiry but they don’t actually expire?

Ellen: In Ontario they’ve had a loss for over ten years and they’re not allowed to expire. I think other provinces have followed but you have to check your own province for that. But there are exceptions too. Visa and Mastercard have pre-paid gift cards where you just use them as a credit card. They don’t expire but what they do after a certain amount of time, like 18 months, is they start adding a monthly fee because you haven’t used it. So, they’re pushing you to use it quickly but if you just put it into a drawer and forget about it then take it out, your $100 gift card might only be worth $50 at that point.

Tom: I think I literally have one sitting around that I should probably take a look at.

Ellen: You should, probably.

Tom: Okay, so what about the other side? It’s not defective but I’ve just decided I don’t like it. It’s clothing that doesn’t fit me, whatever the case is, then is it more about the time stated on the receipt?

Ellen: Yes, and you should be able to have a reasonable amount of time. I’ve been using this store that’s close to me for clothing and I guess I’ve never returned anything and I thought I liked them, then I bought something for a wedding. I think the wedding was in 10 days and I brought it back maybe 15 days later. Part of it anyway. Not even the whole thing and they said they only gave exchanges and no refunds and the exchange is only up to 14 days. And this was 15 days. I said, “Come on, I’ve been a customer here forever!” This woman was giving me a hard time. She didn’t know who I was. Then I finally met the woman I did know who came in later who said, “Okay, we’ll make an exception in your case,” and I thought that was ridiculous. Fourteen days for an exchange? I’m not going to go back there again.

Tom: Yeah.

Ellen: As a shopper, you can shop with your feet. Way back when… I think it was 1997; Future Shop had a very restricted time period for returns. I think it was like 48 hours for certain kinds of things—

Tom: Wow!

Ellen: Then there was a week for other things. I was arguing—and it turned out to be true, a lot of those US retail chains were going to come into Canada and they had much better return policies and our Canadian Future Shop would get swallowed up at that point which it did by Best Buy. But, before they were acquired by Best Buy they expanded their return policies because to have them too tight is just unreasonable and unfair. We all have busy lives and can’t always run back to the store that quickly.

Tom: Yes, the example you gave with the 14 days but it was actually 15 now, it seems like they should all have some leeway. At least a manager override. If you’re working at the cash register you might not have to follow the rules but you’d think there would be a bit of customer service there.

Ellen: Yes, exactly. One day isn’t that big a deal. A lot of stores now are asking you to give your address and your name and a lot of personal info if they think that you’re a serial repeater (laughs) because they want to keep track of you. But if you’re just a “once in a lifetime” a very seldom return person, they don’t have to be that nosy. And I do get a lot of complaints from people who are saying, “Why do I have to give my whole life story just because I’m returning an item?”  

Tom: Yeah. Another thing I was thinking of was every retail location in Canada should have your picture up because of all people to not grant a refund to, it’s probably you (laughs).

Ellen: There’s a point I want to make too. You have to ask about the refund policy. And stores have no obligation to really notify you. There was a great story that someone sent me about how this store put the policy right on top of their counter but the counter was always full of jeans. It was a jean store, so everything was blocking it. And in other stores like at Dollarama—and I’ve been after them for a while because they have no exchanges, no returns, for any reason, they say. And they keep it quiet. But you can go to the head office and they’ll give you a gift card for compensation. But, they put it on the screen where they’re totaling up your items—the electronic screen. There’s a message and then it’s on your bill. Now with the screen, often you’re going in your cart and you’re busy. You’re not necessarily looking at the screen and when it’s on your bill it’s too late you’ve already purchased it and you can’t give it back. You could go there five minutes later and say, “It’s broken” or “I don’t like it,” and they say, “Sorry, no returns, no exchanges.” When I wrote about this, a lot of Canadians asked me why I was picking on them. They said it was very cheap, it’s a great value and if they have to give returns their prices will go up. But remember this is a billion dollar corporation. It’s on the Toronto Stock Exchange. They don’t even print a return policy on their website, which is wrong because all of the other dollar stores do that. So they try to pretend that it doesn’t even exist.

Tom: Yeah, online websites is where I normally look for return policies. And yes, sometimes it’s too late by then. I wonder if I can return something and I look it up on the website and see all the different types of items that might have all sorts of different rules.

Ellen: Yes, that’s another thing, how they classify them. I did a piece about Shoppers Drug Mart and they said no returns on cosmetics. But then what was a cosmetic? Somebody said they tried to return a curling iron and that was treated as a cosmetic.

Tom: Oh, wow.

Ellen: The categories can be kind of vague. Canadian Tire is another one. There are so many different categories of merchandise and you never quite know. So even though they have a good return policy there’s a lot of exceptions. It can be quite complicated.

Tom: My favorite place, speaking of return policies, is Costco.

Ellen: Yes, I knew you were going to say. They’re the best.

Tom: They seem to take everything back and I don’t even think that’s an official policy but I know they did tighten up on electronics, right?

Ellen: I haven’t been there in a while because there are not that many of them close to my house but they are known to be especially generous with returns especially with their brand name Kirkfield. They do that. And also I was shopping today at one of the Western retailers, Mountain Equipment Co-op or MEC as they call themselves now and they had great signage all over the place about telling them if you want a refund or exchange or if anything is not suitable (which means you’ve just changed your mind or it doesn’t fit) and they’ll do everything possible to help you out. That’s like going over backwards. And they’re a non-profit or co-op so that makes sense. But many other retailers try to keep it a secret and I think that’s wrong and that’s why I’ve been dwelling on this so much, especially with these low cost stores. If you’re getting a low price but you can’t give it back that’s just really hurting those customers they’re trying to reach.

Tom: Yeah, if I see something that’s Kirkland at Costco, one, I have a pretty good opinion of the quality has to begin with. But also I know there’s that return policy. I recently had to use it actually. I felt kind of bad but justified it. We had bought a Christmas tree with the built-in LED lights. Every year it started getting worse and switching all the bulbs wasn’t helping. The lights were dying in entire chunks. It was five years later when I actually returned it and they didn’t ask any questions at all. They were totally fine with it. The only reason I’ve never returned something five years old before but in my mind that was four Christmases so really it was like four months of use. It wasn’t even the bulb. It seemed to be the wiring. But it certainly should last longer than five months. But yeah, they didn’t even ask a question. They were totally fine with it. I think I even returned it without the box. I just went up with the tree.

Ellen: That’s another thing some retailers will say… as soon as you open it you can’t give it back. But you don’t know if it works or not unless you take it out of the packaging. Sometimes they’re very strict on that.

Tom: Is that where we start getting the restocking fees? Or does that even happen with retail?

Ellen: Yes. Not every store has a restocking fee but often they’ll charge 20 percent which is quite a lot. They’ll say that’s because they have to repackage it again, put it back on the shelf. But I have noticed that some stores with restocking fees have taken them away because people get really angry about that.

Tom: Yeah, because it’s still in a way like being told that you can’t return the item, not without some cost

Ellen: Or without a big penalty. And now a lot of the online retailers charge you to send it back. So return shipping is on your shoulders not their shoulders.

Tom: Yeah, I’ve seen a lot of online sites that I like where the other return shipping is covered. And I’ve even seen that with sites that sell clothes or something like that where you really do need to get it home and try it on to really know if it’s for you.

Ellen: One thing I want to emphasize is that if you can’t get a refund from the retailer or the manufacturer, don’t wait too long. Go back to your credit card company (assuming that you’ve paid with a credit card). Visa, MasterCard, and American Express all have something that they call a zero liability guarantee for fraud or unauthorized purchase. A good example is one of these websites with a group deals it’s called Buytopia. For a while there, nobody was getting refunds. They kept writing and writing. In one case this lady said she bought a painter service. And the painter said I’m not going to honor that because I have not been paid by Buytopia. And she told Buytopia she wanted her money back—and, by the way, they double charged her for it. She was waiting months and months then finally she went through her Visa card. This was nearly six months later. Usually the maximum they’ll give you if you file a dispute or try to get a charge back is two months to four months or 60 days to 120 days. So don’t wait until it’s too late. Do it earlier.

Tom: For sure.

Ellen: As for Buytopia, they said that they had a system problem, but the system problems seemed to have lasted quite a while.

Tom: I believe I’ve read one of your articles there is a bit of leeway on that 90 days too if it’s an expected delivery date?

Ellen: Yes. This was an interesting one and it’s happened a few times. A furniture store was taking orders and a lot of these orders came from overseas and had to be custom made. So the orders took anywhere from six months to a year to get it all custom made. Then it went out of business. So the credit card companies were saying it’s gone out of business on such and such a date. And this is six months or so later and you can’t get your money back. But they said it wasn’t when it went out of business, it’s when they told me what my next delivery date would be. So you can go back to that. They might have told you just as they were going out of business that the next delivery date would be three months. So they would judge it by the three months.


Tom: Yeah. And another way to get even more around that is there are premium cash-back credit cards that will have purchase protection. It might be a year of protection so similar to the 90-day rule that they all seem to have, but a full year probably saves you some hassles.

Ellen: Yes, and it also helps if that thing doesn’t work properly and the manufacturer won’t fix it.

Tom: So can you tell us a couple stories of other issues you’ve had. And feel free to name any companies or anything. Just anything like well-known times when maybe this has happened—issues with refunds.

Ellen: Yeah. Wal-Mart. I wrote this a few years ago. You buy something before Christmas and usually the prices at this level. Then when you return it—and it’s a gift—on Boxing Day or after that sometime in January, the price has gone down. So people who are going to Wal-Mart with their gift receipt, it doesn’t have a number on it, right? Because you’re giving it to someone and you don’t want to tell them what you paid. So they show the gift receipt and Wal-Mart would say, “Okay, we’ll give you what the price is right now,” which is how much lower price than the gift-giver to pay for it. This isn’t their policy but a lot of cashiers were telling people that. I don’t want to sound as if I’m negative towards store staff but there’s a lot of turnover and they’re probably not trained very well. Stores I hear that also with the scanner accuracy policy where if it’s priced one way on the shelf and the scanner reads it as another thing that’s higher, you should be getting up to $10 for that as a free item. So the staff is not being trained to tell you what they think they know or what the supervisor tells them. And sometimes you really have to go to a head office. This is the same with Dollarama too. Unless you think of going to head office you’re never going to get an exchange or a refund. Some people told me that they just stood there in line saying they were not leaving the store and creating such a logjam. Everybody is getting mad at them. Then finally the manager says to do that. But I’m not really and favor of that. But again, the way it works is that you have to write an email to head office and then you have to send a photo and scanned receipt which is a lot of trouble, and not everybody has the ability to do. They might not have the computer. They might not have a scanner. It makes it much harder. The reason that I’m stressing this is that refund policies can be complicated and you have to always ask and you have to make sure that you’re not buying from a retailer that is famously difficult about giving returns.

Tom: With the Christmas returns, is there a general rule around that? Do a lot of retailers extend their return policies?

Ellen: They give you longer periods because they know that it takes awhile. Most people are Christmas shopping anyway from Halloween onward and they will give you a longer period to return it. But they shouldn’t be making the customer get less in return than the gift-giver wanted to pay for them because that just seems wrong. If you know that that’s happening you’ve got to be careful. The other thing I want to mention is Sears. In Canada they went out of business. One of the big things that they made money from was extended warranties. Now, you and I might argue about whether it’s ever worth buying an extended warranty. I’m a little divided on that because I get so many tales of woe about appliances that don’t work after the first year, and all they ever give you is a warranty for the first year. So Sears was selling—I think they called them protection plans, for appliances. They continued selling them right up until the day they went under which was last October. And many people were really upset because they were paying for a service that they weren’t going to get. So I talked to Visa and MasterCard and they all said, “Send us the information and we will pro-rate the refunds. So you’ll get some service from Sears and then the rest of it we will give you a refund for,” under their policy of zero liability. And that was great. People who did it—most of them got their money back. Some of them had a little bit of trouble and I went to the retailer and tried to push and I got the money back for them that way. That makes sense. But Sears should have been telling people that too but they didn’t. You had to figure that out on your own. I think, in general, if you have a choice between a debit card and a credit card you’re better off paying a credit card because you do get a much better guarantee in these kinds of situations.

Tom: Yeah, it seems that credit cards are always going to be on your side, pretty much. Like you said, with the zero liability they will just make the store end up covering the other side of it.

Ellen: The other thing too is that credit cards charge 18 to 25 percent in interest so you should be getting something for that money. Even if you pay on time, other people are paying that much too so they’ve got to do something good in return for those sky-high interest rates.

Tom: I’m a huge fan of using a credit card but I certainly always tell people not to carry a balance on their credit card, that’s not the point. Use it as a tool where you can you get all this extra protection and earn rewards. There are so many positives. As long as you’re not carrying that balance. Let the credit card companies make money on the merchant fees they charge merchants. You don’t need to pay anything.

Ellen: Yeah, but some people will think it’s kind of petty but it’s not petty when it can really add up. Sometimes people say they don’t have any money to save. They just spend it all and it’s all gone. But you should be paying much more attention to where you buy, what the return policy is and trying to get the money back. Another issue that’s come up is services. Particularly dating services. I hear from people about that. And gyms, fitness clubs, where they have a very restrictive policy. Sometimes as soon as you sign it you’re in and you can’t get out. In Ontario they give you a 10-day cooling off period. There was a chain (whose luckily gone out of business) where they were going after a lot of college students telling them they had 30 days when it was only 10 days. They were constantly telling everybody it was 30 days. And if the customer complained, the company would say they didn’t have any proof or that the person never told them they had 30 days. They wouldn’t believe it and said they’d stand by their people.  Another thing that Canadians often find difficult to believe is that people lie to you. They purposely lie to you and that it’s your responsibility to try and bring some skepticism to it and say, “Maybe I’ll double check. Maybe I’ll check their website.” My trick is to always look for company names and complaints. Just keep searching on Google. Don’t stop with the first page. Just keep going and you’ll eventually find a rip-off report or complaints of some kind. The Better Business Bureau is a great place to look for complaints. And as soon as just see that, think twice about signing up because you might get stuck.

Tom: Yeah, even at 30 days, if you’re signing up for a year for gym membership you’re probably past 30 days by the time you’ve given up on wanting to exercise. Everyone that signs up in January.

Ellen: Yes, as well as the membership. They started doing it for the personal training which is a lot more expensive. Those are usually $100 an hour. So you meet someone and have had maybe one personal training session with them and by the time your cooling off period is over you realize they’re not any good and you’re not getting anything out of it. And they’re insisting that you have to pay for that whole value of the personal training. Somebody came to me once who paid something like $10,000 in advance, for personal training. I don’t know what she was thinking of. I think she got some kind of a windfall and decided to spend it on improving her fitness and her life. It was Good Life, actually. They just stood firm and said they didn’t believe it. Usually Good Life is pretty co-operative and gives customers the benefit of the doubt. But in this case they just didn’t.

Tom: Yeah, the higher the value goes the more benefit it is to them to start digging their heels in. We’ve touched on in various spots but, if you’re a customer walking into a store and you’re not sure of the return policy, are there a series of steps that should be taken before making a purchase, especially a big purchase?

Ellen: First of all, look on the walls. Many stores don’t put it on the wall so look on the door. See if there’s some kind of message anywhere. And if you don’t see anything, ask for the manager and ask the manager what is the return policy is and, if necessary, have them show you where it is on the website. Then ask them questions like, “Are there any exceptions to this rule? What about if I take it out of the package? Is it okay to bring it back?”  Because maybe you’ve thrown the package in the garbage but you’ve got everything else. A lot of these policies have been drafted because there are some people who abuse the return policy. I have to acknowledge that. They’ll wear an item and then give it back. Now, this isn’t right and I think stores have the right to protect themselves. But I’d say maybe five to 10 percent of the returns are those kinds of people. I remember way back when crock pots were just new, and we were so excited, my husband and I. We gave this couple a crock pot as a wedding gift but they didn’t seem that happy with it. Finally, they told us they already had 15 of those. So you just never know. It’s not that you’re changing your mind; it’s just that something isn’t suitable and you want to be able to at least exchange it. The store should be somewhat flexible on that. So get a sense of how flexible they are. Maybe the store will put it away for you and you can come back the next day. That way it will give you some time to do some internet research because the last thing you want is to be is stuck with the purchase. Of course, you can always try and sell it on Kijiji or something like that. But still, you’re not going to get what you paid for it, including the tax.

Tom: Yeah, exactly. Well thanks for being on the show. Can you let everyone know where they can find you?

Ellen: Okay, my website is I also write in the Toronto Star once a week so you can find me at the Toronto Star website.

Tom: And you have a podcast as well?

Ellen: Yes, The MoneySaver podcast with Lana Sanichar from Canadian Money Saver Magazine. That’s something new. Thanks for reminding me. All of our podcast hosts are interviewing each other but it’s great fun because that’s how people learn—getting the message several times.

Tom: Yes, for sure. Thanks for being on the show.

Ellen: Thanks, Tom.

Thanks to Ellen for the advice on how to handle refunds and thanks to you for being a part of it. You can find show notes for this episode at The Maple Money Show is growing every week thanks to you. If you know someone who’s had trouble with refunds in the past, please share this episode with them so they’re armed with the right information for next time.

'Credit cards are charging you 18-25% in interest, so you should be getting something in return (extra purchase protection) in exchange for those sky high interest rates.' - Ellen Roseman Click to Tweet