The seven-day cooling-off right for online sales

"No refunds on online orders" appears on a great many South African websites. It has no legal effect on a transaction covered by the cooling-off right, and a business relying on it is exposed rather than protected.

The right

Section 44 of the Electronic Communications and Transactions Act 25 of 2002 gives a consumer in an electronic transaction the right to cancel without reason and without penalty.

The period is seven days. It runs from the date of receipt of the goods, or from the date the agreement was concluded where the transaction is for the supply of services.

Two features make it stronger than most refund policies.

No reason is required. The consumer does not have to say the product was defective, misdescribed or unsuitable. Changing their mind is enough.

It cannot be contracted out of. A term in your terms and conditions excluding or limiting the right does not work. This is not a default position that a well-drafted contract can displace.

What happens on cancellation

The consumer returns the goods and the supplier refunds the payment.

The consumer pays the direct cost of returning the goods. That is the one cost the consumer carries, and it is worth stating clearly in your policy so that it is not a surprise.

The supplier refunds within 30 days of cancellation. Not on receipt of the goods, not when a manager approves it: within 30 days of the cancellation.

A supplier who fails to refund within the period is in breach, and that is a complaint to the Consumer Goods and Services Ombud or, depending on the sector, to the National Consumer Commission. For modest amounts the Small Claims Court handles it without an attorney, and our small claims checker works out whether a claim fits.

What it does not apply to

Section 42 sets out the transactions the protection does not reach, and the list is specific rather than general:

• financial services
• auctions
• foodstuffs, beverages or other goods intended for everyday consumption supplied to the consumer's home, residence or workplace
• services which began with the consumer's consent before the end of the cooling-off period
• goods or services where the price depends on fluctuations in the financial market outside the supplier's control
• goods made to the consumer's specifications, or clearly personalised, or which by their nature cannot be returned or are liable to deteriorate rapidly
• audio or video recordings or computer software which the consumer has unsealed
• newspapers, periodicals, magazines and books
• gaming and lottery services
• accommodation, transport, catering or leisure services provided on a specific date or period

Several of those are commercially important. A business selling custom furniture, personalised gifts, digital downloads or grocery deliveries is in a materially different position from a business selling stocked retail items, and it should know which.

The "services already begun with consent" exclusion is the one businesses most often fail to use properly. If a customer asks you to start work immediately, record their consent to starting within the cooling-off period, because that consent is what brings the exclusion into play.

How it sits with the Consumer Protection Act

There are two cooling-off rights in South African law and they are not the same, which causes confusion in both directions.

ECTA section 44 applies because of how the transaction was concluded: electronically. Seven days, no reason needed, no penalty.

The Consumer Protection Act contains a separate five-business-day cooling-off right for direct marketing, which applies because of how the consumer was approached rather than because of the medium. Our guide on the Consumer Protection Act cooling-off period covers that one.

The Consumer Protection Act also provides separate rights that are frequently confused with cooling off: the right to return goods that are not of good quality within six months, and the right to cancel advance reservations subject to a reasonable charge. Those are quality and cancellation rights, not change-of-mind rights.

A consumer may have more than one of these available. A business should be clear about which right a particular customer is exercising, because the periods and consequences differ.

What a compliant online store looks like

If you sell online, the cooling-off right is not the only thing ECTA requires of you. Section 43 obliges an electronic supplier to make a body of information available to consumers before the transaction is concluded, including who you are, where you are, how to contact you, a full description of the goods, the full price, the payment and delivery arrangements, the return and refund policy, and the security of the payment mechanism.

Practically, that means your site needs:

Real identity and contact details. A legal name, a registration number where applicable, a physical address and a working means of contact. A contact form alone is not enough.

A returns policy that states the seven-day right accurately, rather than one that contradicts it. Saying "no refunds" is worse than saying nothing.

Clarity about who pays return postage, since that cost is the consumer's and disputes arise where it was never mentioned.

A record of consent where a service is to begin within the seven days.

Total price disclosure, including delivery and any charges, before checkout.

Our POPIA compliance checker deals with the personal information you collect at checkout, which is a separate obligation entirely and is the other half of running a lawful online store.

Handling a cancellation without losing the customer

The operational side matters more than the legal analysis, because most disputes here are caused by process rather than by principle.

Acknowledge the cancellation in writing on the day it arrives. The 30 days run from cancellation, so you need a record of when that was, and so does the customer.

Give a clear return address and method. Customers who are told to "send it back" without being told where lose the parcel, and the argument that follows is about your instructions rather than their right.

Do not condition the refund on inspection. You may of course inspect, but a refund policy that makes payment contingent on your satisfaction reintroduces a discretion the right does not give you.

Refund to the original payment method unless the customer asks otherwise. Store credit offered in place of a refund is not a refund, and a customer who accepts it should be doing so by choice.

Keep the record. What was ordered, when it was delivered, when the cancellation came, when the goods came back, when the refund was paid. Those five dates answer every complaint that can be made about the transaction.

Businesses that handle this cleanly report that returns under the cooling-off right are a small fraction of orders and that the customers who use it often buy again. Businesses that fight it generate ombud complaints, chargebacks and public reviews over amounts smaller than the cost of dealing with any of those.

Why complying is cheaper than not

Businesses resist this right because it looks like an invitation to return anything.

In practice the exposure is smaller than it appears and the cost of resisting is larger. The period is short, the consumer carries the return cost, and the exclusions cover the categories where returns would genuinely be ruinous. Against that, a policy that contradicts the Act is unenforceable, generates complaints to regulators, and produces exactly the kind of public dispute that costs more in reputation than the refund would have.

A returns policy that accurately states a right the customer already has reads as confidence. One that purports to remove it reads as something to argue with, and is ineffective anyway.

Worked example

This example is illustrative. An online store sells a jacket for R1 800, delivered on 4 March. The customer decides on 8 March that they do not want it. The site's terms say all sales are final.

The customer has seven days from receipt, so they are in time. They need no reason. The term saying sales are final does not exclude the right, because the right cannot be contracted out of.

The customer returns the jacket at their own cost. The store must refund the R1 800 within 30 days of the cancellation.

Change one fact and the answer changes entirely. If the jacket had been made to the customer's measurements, it would fall within the exclusion for goods made to the consumer's specifications, and the store would be entitled to refuse. If the order had been a bulk grocery delivery to the customer's home, the everyday-consumption exclusion would apply.

The store's mistake is not its policy on custom items, which is sound. It is publishing a blanket term that is wrong for its main product line, and which a customer can simply ignore.