The End of Store Credits?

Customers to get money back in cash, if Knesset committee approves new consumer regulations.

Knesset committee must still approve new consumer regulations

Customers may finally be able to return something they bought and get their money back in cash, if the Knesset Economic Affairs Committee approves regulations submitted yesterday by Industry, Trade and Labor Minister Benjamin Ben-Eliezer (Labor ).


But the proposed new regulations have a number of catches: For example, every return of a product or cancelation of a service will cost the consumer 5% of the value of the transaction, or NIS 100, whichever is less.

The new regulations relate to returns or cancelations without any specific complaint or justification. Faulty products may already be returned for full refunds.

If approved, the regulations will take effect immediately, without any need for further legislation. But the Federation of Israeli Chambers of Commerce objects to the proposal, saying Israelis will abuse the new rules, and has hired lobbyists to pressure MKs to vote against it.

The regulations were a long time coming. Five years ago, the Knesset passed a law requiring stores to refund money to customers who returned purchases, instead of just giving them store credits or exchanges. But the law was never implemented, since the ministry never published the regulations needed to enforce it.

Six months ago, however, MK Eitan Cabel (Labor ), who sponsored the law, petitioned the High Court of Justice on the matter. Since then, the ministry's legal department has been working hard to formulate the regulations and get them approved by other ministries.

The Economic Affairs Committee, chaired by MK Ofir Akunis (Likud ), will start discussing the regulations tomorrow.

The law stipulated that the store must return the money in the same manner the customer paid: cash for cash or checks, and cancelation of credit card charges. But it gave the industry, trade and labor minister the authority to determine which products and services could be canceled or returned for monetary refunds.

Ben-Eliezer called the proposed change good news for consumers. "The State of Israel has taken a step forward in protecting consumers," he said, noting that Israel will be one of the first countries to mandate cash refunds by law.

Save your receipts

The regulations list specific goods that can be returned for cash, such as furniture, household and garden items, electric appliances, shoes, clothing - except undergarments - and any goods still in their original packaging.

But the rules only applies to purchases over NIS 50.

As to services, the list includes lodging, transportation, entertainment, courses, aesthetic and cosmetic services, vacation packages, communications services such as cellular telephones, memberships in gyms or spas, and gambling and dating services, among others.

The rules also state how long the customer has to cancel the deal - usually two weeks from the time the deal is signed or the merchandise is received. But in the case of certain products, such as shoes and clothing, the period is much shorter, only one day.

The regulations will also apply to goods received as a gift, such as those paid for with gift vouchers.

Certain items, however, are excluded - for example, furniture that is installed in the customer's home, or merchandise produced especially for the customer. Food, drugs and nutritional supplements are also not included.

The customer will have to prove that he bought the goods by producing the receipt, or some other form of proof.

In some cases, such as electrical and electronic items, the store can charge a 10% cancelation fee if the original packaging has been opened.