Getting your cash back

When you return an item to a store in Israel, you still are not guaranteed to get your money back. But now, five years after the first stab was made at passing a law requiring businesses to reimburse costumers for returned items, another attempt is gathering momentum.

That first effort had involved a proposed amendment to the Consumer Protection Act, which set down guidelines for when a consumer may return a product and get their money back, as opposed to store credit - which is what Israeli retailers usually provide.

Two years ago, in April 2008, the draft regulations came up for debate before the Knesset Economics Committee, but they were shot down. Now the legal team at the Ministry of Industry, Trade and Labor, headed by Michael Atlan and Hanna Tiri, and working with deputy minister Orit Noked, is having another go. A number of consumer protection organizations, such as Public Faith, as well as the Federation of Israeli Chambers of Commerce are also assisting the effort.

At present, the law states that the consumer may get his money back only in cases involving peddling, or when the transaction was completed remotely - and even then only under certain conditions. Each business sets its own policy on the returning of money, and must have a prominent sign hanging in the store clearly stating what that policy is. Retailers usually offer store credit that remains valid for a limited period of time, but they will not return cash to costumers.

Some stores, however, do return cash - most notably the big ones, such as Home Center, IKEA and Ace - without being legally required to do so.

Under the new rules taking shape, consumers will be able to demand money back on products that cost more than NIS 50. The rules will not apply to food, drugs or other perishable items though.

To protect certain companies that provide services to consumers, for example telecom companies, the rules state that if a hardware installation has been made or if the consumer has made relative use of the service, the company may retain up to NIS 100 of the amount paid to them. In some cases, companies will be permitted to charge cancellation fees, amounting to up to 5% of the transaction cost or NIS 100, whichever is the lesser amount.

The proposed rules would allow consumers to return a product bought from a chain to any branch of that chain. Also, the consumer would be able to get money back even if the product was purchased using gift vouchers.

Strict limits by product category

One major difference between the vague rules discussed five years ago and the draft being set out today, is that the legal team at the Ministry of Industry, Trade and Labor has set strict limits by product category. Clothing, for instance, may only be returned within one day of purchase, at least if the consumer wants cash back.

The draft rules are currently being perused by various ministries. Each ministry is examining the rules pertinent to its fief: the communications minister is looking at the rules pertaining to telecommunications, and so on. Each will have a chance to comment on the draft and institute changes as necessary. Tiri says the process is nearing its end.