Activism > Consumer Defense

20091105th-flower-zoom-DSC09417Summary. According to the U.S. Government Federal Trade Commission, consumers have the legal right to return software for a full refund (or perhaps in-store credit) if it is defective, or does not work on their computer, or if it did not perform as advertised, or if they simply decide that for any reason they were not completely satisfied with the product. The validity of this fact is demonstrated by the prevalence of resellers and software manufacturers who offer a 100% money back satisfaction guarantee on their software.

The Software Sales Scam. It’s amazing how many companies have a software return policy that doesn’t permit refunds. What a racket to be in. To presume to have the ability to sell a product and offer zero customer satisfaction is quite offensive. What’s to prevent consumers from being mislead or sold defective products? This page explains your rights as a consumer.

Federal Trade Commission Statement. In a phone call on 11 September 2008, a Federal Trade Commission representative stated the following, “I’m not aware of any Federal law stating that software can’t be returned. I’ve just searched my database and can’t find anything. I’ve never heard of it before.” [Source: Cindy, last name withheld for privacy] Documents available on the Federal Trade Commission website include the following statements regarding software returns.

  • “… that the right to refund can be satisfied by a legal requirement, and that legal requirement is UCITA itself.  So, automatically it will say in mass market licensing you have a right to refund.  There is a right to refund under UCITA…” (Source: Symposium Transcript, 27 October 2000, page 308, lines 4-8) [PDF]
  • “…if you bought software as a consumer or as a small business under certain circumstances and the software doesn’t work, you can go back to the manufacturer or back to the retailer and demand a refund, just as you can get a refund for a tangible good that doesn’t work.” (Source: SymposiumTranscript, 27 October 2000, page 315, 11-16) [PDF]

What Retailers Need to Know. Some retailers misinform, deceive, and manipulate customers by telling them it is against federal law to offer a refund on software once the package has been opened. Retailers must be notified that they are providing false information about federal laws. If retailers have further questions, they can contact the Federal Trade Commission by calling 1-877-FTC-HELP (1-877-382-4357) or via the FTC website. Upper management must not threaten store managers and sales representatives by telling them they are breaking federal law by accommodating a legitimate customer return of software. Retailers have been known to lose the business, loyalty, and trust of many customers simply because they wouldn’t refund a $50 software program. What makes matters worse is that when consumers discover there is no such federal law regarding software returns, they feel lied to and deceived. As a retailer, you need to protect yourself by having the flexibility, discernment, and judgement to serve your loyal customers while reducing illegitimate returns from customers who are trying to take advantage of you. When customers are treated poorly and deceived, you loose them and many of their friends as customers, resulting in substantial losses to your business.

Non-Compliant Retailers. Some retailers are currently not in compliance with regard to offering refunds on software. They will either not offer a refund at all, or only offer a “refund” as part of an exchange for the exact same item. This doesn’t qualify as a refund. A few are perpetuating false information, stating that federal law prohibits them from offering a refund on returned (opened) software. This is simply a lie being told to consumers. If it were true, then how does one explain the many retailers and software vendors who offer 100% money back satisfaction guarantees on software? (see list below) Because these retailers are engaged in this kind of misinformation, and denial of basic consumer legal rights, they are at risk of fines, lost sales, sanctions, boycotts, individual lawsuits, government action, class-action suits, bad press, negative publicity, and increased customer dissatisfaction. We would strongly recommend that you NOT do business with these retailers until they change their return policies. Non-compliant retailers include:

  • Best Buy. “Opened computer software … can be exchanged for the identical item but cannot be returned for a refund.” [Source]
  • Circuit City. “Opened software, music, games, and movies may be exchanged for the same title only.” [Source] This is not in compliance because an exchange is not the same as a refund.
  • Power Max. “Due to regulations within the software industry as well as federal law, opened software may not be returned for a refund.” [Source] This statement is false.
  • West Music. “Federal regulations do not permit the return of opened computer software.” [Source] Elsewhere on their site is this statement, “federal law prohibits the return or exchange of any opened software for any reason.” [Source] These statements are so far beyond false that they are absurd. The statements are so false that a Google search on either of the statements produces only references to the West Music website.

Compliant Retailers. Most legitimate, honest, reputable, genuine, and responsible retailers of software will offer a 100% money-back satisfaction guarantee. No questions asked. In some cases in-store credit is offered. Below are a few examples, and there are many more like these, which is evidence of the fact that there is no Federal Law prohibiting a company from ensuring customer satisfaction and respecting consumer rights with regard to return of open (used) software.

  • Adobe. “Adobe will exchange or refund the purchase of a product or support contract that you purchased directly from Adobe if you contact Adobe to request the return within 30 days of receiving the product.” [Source]
  • Computer Discount Warehouse – “In order to expedite a return, please have the following information on hand when requesting an RMA number: Customer number, invoice number, serial number, reason for return, action to take (replacement/repair/credit) and whether the box has been opened or is manufacturer sealed. Please return all products 100% complete including all original manufacturer boxes with the UPC code and packing materials, all manuals, blank warranty cards, accessories and any other documentation included with the original shipment. RMA approval is contingent upon, among other things, the products being 100% complete.” [Source]
    This well established retailer has always offered a money back guarantee.
  • Interactive Tools. “Your satisfaction is guaranteed 100%. If for any reason you are not totally satisfied with your purchase from interactivetools.com, you are welcome to request a refund. … Refunds are not transferable and will be given to the original purchaser in the same form of payment that was originally made.” [Source]
  • McAfee. “We guarantee that McAfee Security subscriptions will make your computer more secure or your money back. If for any reason you are not 100% satisfied, just let us know within 30 days of purchase and get a full refund. Just send an email to us. That’s risk-free protection.” [Source]
  • SmithMicro. “Return Guarantee: There are no worries with our 30-day, ‘no questions asked’ return policy.” [Source: Advertising literature.]
  • Sunbelt Software. “100% Money Back Guarantee if Product is returned within 30 days of invoice date. … If Product was electronically delivered, a LOD (Letter Of Destruction) on company letterhead will be required.” [Source]

What Consumers Can Do Before You Buy. Although you have the right to return software, as a consumer there are a few things you can do to help avoid conflicts regarding software returns. Because there is some confusion about this issue, avoiding or reducing returns is the best practice.

  • Free Software. There are many free alternatives to commercial software such as AVG AntiVirus, Mozilla Firefox (for web browsing), Mozilla Thunderbird (for email), Open Office (spreadsheet, word processing, presentations, photo editing), and Picasa (for photo management). Look for reputable open source, freeware, and shareware alternatives.
  • Get Prior Approval. At the time of purchase, let the retailer know that because of the complexity of software, if it doesn’t work or causes problems, you want assurance that you can return it for a better product or full refund.
  • Read Reviews. Some software programs are just poorly designed, complicated to use, and have compatibility problems. Before trying a product on your own computer, do some research first to ensure (as best you can) that it will work. Ultimately, the only way to know for sure if a product will work on your computer is to buy it and install it. If it doesn’t work or it causes problems, it’s within your right to return it. If you believe the product is falsely advertised, contact the Federal Trade Commission by calling 1-877-FTC-HELP (1-877-382-4357) or via the FTC website.
  • Try Before You Buy. Whenever possible, customers should download demos of software before purchasing full versions from the store. Or, if no demo is available, but you know someone who uses the program, try using it on their computer.
  • Use Your Credit Card. When you have a legitimate complaint about a product, that can be verified by a third party (such as a computer consultant), then you can request a refund with your credit card company.

Understanding Return Policies. Because of wide-spread abuse (by consumers against retailers), retailers have had to be more strict about accepting returns. The following list describes some of the reasoning behind return policies.

  • Music. Music CDs can be easily copied and saved on a computer. If retailers were to widely accept returns of music CDs, there would most certainly be abuses of that situation where customers would buy a CD, take it home, copy it to their computer, and then return it for a full refund. In such cases, the retailer, the music label, and the recording artist lose out.
  • Movies. Whether you see a movie in a theater or purchase a DVD at the store and watch it at home, it has traditionally been understood that no refund is available afterward.
  • General Merchandise. There is a wide range of non-consumable products and merchandise used by consumers for parties and special events which later gets returned for a full refund. Rather than paying a rental fee, consumers buy products, use them, and then take them back. Examples include tools, hardware, home electronics, and clothing. Consumers who engage in this practice create problems for everyone.
  • Software. The problem with software is that most programs, once installed, continue working even after the software may have been returned to the store. With the high cost of software, some dishonest consumers would be motivated to purchase software, install it, and then return the media for a full refund while keeping the software. However, unlike music, software doesn’t always work as intended. There are complexities to software that may result in a specific program not working for a customer. Sometimes features listed on the box may not work as advertised (or as represented by a sales person). For these reasons, software is (and must be) returnable.
  • Video or Photography Equipment. Consumers have been known to purchase electronics equipment (such as a video camera or digital still camera), use it (at a wedding or while on vacation), and then return it when they are done. In such cases, the retailer takes a significant loss because the merchandise can no longer be sold as new at full price.

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