A consumer coup
The Refund Law does not allow for cash refunds when customers have opened the original packaging or plugged in the appliance. But how is one supposed to check out a product without opening the package or plugging it in?
Following prolonged delays, the Refund Law yesterday finally took effect, enabling Israel consumers to return merchandise and get back their money. The era of credit slips is officially over. From now on, buyers will receive cash.
Although the law was passed in the Knesset five years ago, it took until now to flesh out all its regulations. The idea was to put Israeli consumers on par with their American counterparts. But there was no need for a law over there. Competition took care of that. Merchants understood that a liberal policy of speedy and simple cash refunds could provide a great boost to sales.
Consumers tend to buy more when they know they won't be stuck with merchandise they don't need. They buy more easily when they know they can examine the goods at home and then make a final decision. And when consumers go back to the store to return merchandise, there's a good chance they'll buy something else while there. That's why cash refunds are an excellent sales ploy.
At their own initiative some time ago, several Israeli retail chains, which sell a wide variety of products ranging from clothing to electrical appliances, introduced a policy of cash refunds. By demonstrating their confidence in their products, they knew it would also help build up their customer base.
But representatives of the merchants fought the law tooth and nail, eventually forcing the the Industry, Trade and Labor Ministry to water it down with complex and unnecessary regulations. Products were divided into seven groups, each with a different cancellation date and method of return. Merchants were allowed to charge customers 5 percent of the cost of the sale, as well as unclear credit fees.
The law does not allow for cash refunds when customers have opened the original packaging or plugged in the appliance. But how is one supposed to check out a product without opening the package or plugging it in? And there are a host of other unclear restrictions that pertain to sales of furniture and cosmetics.
This is why Industry, Trade and Labor Minister Benjamin Ben-Eliezer cannot afford to rest on his laurels. He must amend the law to make it simpler and more easily implemented, so that all consumers and merchants can benefit from it, as they should.