Enabling Business, Empowering Consumers

NO RETURN, NO
EXCHANGE POLICY
Series of 2013

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Empowering Consumers

NO RETURN, NO EXCHANGE
POLICY

The words " No Return, No

Exchange, or words to such effect
shall not be written into the
contract of sale or receipt in a
sales transaction, in any document
evidencing such sale or anywhere
in a store establishment. (Sec. 2,
Rule VI, Chapter 4, Title III of the
Implementing
Rules
and
Regulations, RA 7394).

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WHY IS THIS POLICY PROHIBITED?

It is deceptive
It creates a misconception on
the part of consumers that
they do not have the right to:

Return shoddy or defective

goods; or
b) Demand for remedies in
case of
defective or
imperfect service.
a)

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WHEN AM I ENTITLED TO REFUND,

REPLACEMENT OR REPAIR?

Under the law, you are entitled either

refund, replacement or refund if
something you bought:
Is faulty or defective and you were
not aware of it;
Does not do the job you were led
to believe it would do;
Does not match a sample you
were shown; or
Was not as described on the box
or in an advertisement.

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CONDITIONS FOR THE 3Rs

You cant prove that you bought

it (e.g. you dont have a receipt)
You changed your mind about it;
You have damaged it;
You knew or should have known
about a fault when you bought
it (e.g. factory seconds).

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Q. WHAT IS THE LEGAL BASIS OF THE PROHIBITION ON

THE NO RETURN, NO EXCHANGE POLICY OF
BUSINESS ESTABLISHMENT?
A.

Pursuant to the Implementing Rules and Regulations

of R.A. 7394, of the Consumer Act of the Philippines,
especially Title III, Chapter I, Rule 2, Section 7 of
Department Administrative Order (DAO) No. 2, we
rues 1993, the words : No Return, No Exchange or
words to such effect shall not be written into the
contract of sale, receipt or sales transaction, in any
document evidencing such sale or anywhere in the
store or business establishment.

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Q.

WHAT IS THE RATIONALE

FOR THIS PROVISION?

A.

The prohibition is aimed to correct the

misconception of a lot consumers that they
do not have the right to return shoddy or
defective goods or demand for remedies in
case of defective or imperfect service
because of the No Return. No Exchange
notice in the receipts or anywhere in the
business establishments.

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Q. WHY IS THE PRESENCE OF A NO

RETURN, NO EXCHANGE NOTICE

CONSIDERED DEFECTIVE?
A.

Such
statement
is
considered
deceptive because consumers may
return or exchange the goods or avail
of other remedies in case of hidden
faults or defects, or any charge not
known to the buyer. By provision of
law, sellers are obliged to honor their
implied
warranties
and
grant
corresponding remedies to consumers.

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Q.

CAN BUSINESS ESTABLISHMENTS STILL ISSUE OFFICIAL

RECEIPTS WITH THE NO RETURN, NO EXCHANGE?

A.

Business establishments with unused Official Receipts should

erase or blot out the words No Return, No Exchange before
issuing such receipts and henceforth, such words should no
longer be printed in their receipts or anywhere in their
business establishments.

Q.

IF AN ITEM BOUGHT FROM STORE Y TURNS OUT TO BE

MORE EXPENSIVE THAN A SIMILAR ITEM IN STORE X, CAN
THE CUSTOMER RETURN THE ITEM AND ASK FOR A REFUND?

A.

No, while consumers have the right to choose and make a

canvass of prices, once a sale is consummated and the
product has no defect, one cannot return the goods nor ask
for refund.

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Q. CAN A STORE EXERCISE ONLY A POLICY OF EXCHANGE

BUT NOT REFUND?
A.

Consumers are entitled to either an exchange or

refund, as long as there is defect in the quality of
goods or imperfection in the service.

Q. IF THE DEFECT IS DUE TO MISHANDLING ON THE

PART OF THE BUYER, CAN HE STILL RETURN THE ITEM
AND DEMAND AN EXCHANGE OR REFUND?
A.

No, the prohibition covers only hidden defects, shoddy

goods or imperfect service.

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Q.

IF AFTER BUYING A CERTAIN ITEM , A CUSTOMER

CHANGES HIS MIND AND WANTS TO RETURN SAID ITEM,
CAN HE INVOKE THE PROHIBITION ON NO RETURN, NO
EXCHANGE?

A.

No, the prohibition is not an excuse for the consumers to

return the goods because of change of mind.

Q.

IS THERE A TIME LIMIT WITHIN WHICH A BUYER MAY

RETURN DEFECTIVE PRODUCTS?

A.

There is no hard- and- fast rule on the period within which

a customer may return the products he purchased. A rule
of reason should, however, be observed, taking into
consideration the nature of the item purchased and the
expressed/implied warranties mandated by law, i.e., the
Consumer Act and the New Civil Code of the Philippines.

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Q. CAN A BUYER RETURN DEFECTIVE GOODS WITHOUT

OFFICIAL RECEIPT?
A.

The official receipt is the best proof of purchase. However, a

buyer may still demand replacement or refund if he can
prove that a defective item was bought from a certain store.

Q. CAN A STORE PRINT IN THEIR INVOICES THE STATEMENT

EXCHANGE OF MERCHANDISE WILL NOT BE ACCEPTED
WITHOUT A VALID RECEIPT OR OTHER EVIDENCE OF
PURCHASE?
A.

NO, because there may be goods exclusively manufactured

or sold by a company and there is no need to prove
purchased of the item.

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Q. WHAT SHOULD A CONSUMER DO IN CASE A

STORE IS FOUND VIOLATING THE PROHIBITION ON
NO RETURN, NO EXCHANGE POLICY?
A.

He/She can file a complaint with the DTI, with the

following information:
The name and address of the complainant and
the firm/entity being complained about;
The acts or omissions constituting the offense
including the approximate date, place and time
of its commission;
The remedy he is seeking from the Department,
other than damages;
Any other relevant information the consumer
may have regarding the matter.

Q.

A.

B.

WHERE SHOULD THE

COMPLAINT BE FILED?
All complaints should be addressed to
the provincial Office of the Department
of Trade and Industry.
Evidence available should be brought by
the complainant to the DTI Provincial
Office, such as the following:
product bought, preferably unopened
or sealed;
Xeroxed copy of the receipt issued to
him as evidence of the sale advertising
materials or;
brochures advertising the product; etc.

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Q.

WHAT ARE THE REMEDIES AVAILABLE TO

CONSUMERS UNDER THE RULES MENTIONED
ABOVE?

a) For quality imperfection, the customer has the right

to choose:
replacement of the product by another of the same
kind in a perfect state of use;
immediate reimbursement of the amount paid;
proportionate price reduction;

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b)

For product quantity imperfection, the

consumer may demand alternatively at his
option:
the proportionate prices;
the supplementing of weight or measure
differential
the replacement of the product by another of the
same kind, mark or model, without said
imperfections;
immediate reimbursement of the amount paid
with monetary updating without prejudice to
losses and damages, if any.

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Q.
A.

Q.
A.

CAN THE STATEMENT EXCHANGE WILL NOT BE ACCEPTED

ON ITEM IN ANY WAY USED, DAMAGED OR ALTERED BE
PRINTED ON INVOICES?
NO, because there may be items which can be determined as
defective only when used. Moreover, the right to determine
whether goods are damaged or altered cannot be reserved
exclusively for the company since this is a matter between the
customer and the company.

IS THE CONDITION SALE ITEMS ARE NON-REFUNDABLE

ALLOWED?
This has the same effect as the No Return, No Exchange
provision. However, in the case of sales promotions like
water or fire-damaged sale, the statement may be allowed,
provided the defects are apparent and visible to the consumer
and that proper disclosure in the form of tags or notices are
made at the time of purchase.

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Q. WHAT IS THE PENALTY FOR VIOLATION OF THIS PROVISION?

A.

a)
b)

CRIMINAL PENALTIES
a fine of not less than five hundred (P500.00) pesos but not
more than twenty thousand pesos (P20,000.00);
or imprisonment of not less than three (3) months but not
more than two (2) years or both, at the discretion of the court

Provided, that, if the consumer product is one which is not a food,

cosmetic, drug, device or hazardous substance,
a) the penalty shall be a fine of not less than two hundred pesos
(P200.00) but not more than five thousand pesos (P5,000.00);
b) or imprisonment of not less than one (1) month but not more
than one (1) year or both at the discretion of the court.

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B.

ADMINISTRATIVE
Imposition of administrative fines in such amount as
deemed reasonable by the Secretary, which in no case
be less than Five Hundred Pesos (P500.00) nor more
than Three Hundred Thousand Pesos (P300,000.00)
depending on the gravity of the offense and;
an additional fine of not more than One Thousand
Pesos (P1,000.00) for each day of continuing violations.

(Please refer to Article 164, Consumer Act,

for other Administrative Penalties)

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