Cash refunds are rare at local businesses

According to the study, about 700,000 households, representing 34.8% of all households in 2005, returned at least one product in 2005.

By SHARON WROBEL
consumerism 88 298 (photo credit: Ariel Jerozolimski)
consumerism 88 298
(photo credit: Ariel Jerozolimski)
Very few businesses in Israel allow customers to return purchased products for a full cash refund if the consumer later regretted his purchase, according to a survey conducted by the Ministry of Industry, Trade and Labor in honor of World Consumer Day on Thursday. According to the study, about 700,000 households, representing 34.8 percent of all households in 2005, returned at least one product in 2005. Some 69% of returns or exchanges of goods were due to changes in the taste of the buyer or because they were unsuitable, while 25% of households exchanged or returned their goods because of defects. The survey, which was carried out at the beginning of 2006 among 1,000 Israeli households across the country, found that in comparison to the norm in the US and other Western countries, in Israel only few businesses allow the consumer to return the bought product for a full cash refund if the consumer changed his mind. Businesses exchanged goods for 49.2% of the requests, while in 2.1% of the cases, the goods were repaired and in only 10.1% of the cases did consumers receive a cash refund. According to the Israeli consumer law, every business needs to clearly state its return policy, but the business owner is not obliged to provide a cash refund if the buyer decides to cancel the purchase. Only in cases, in which the business did not have a clear sign determining its return policy, is the consumer entitled to return the product within seven days of purchase and receive a full cash refund. The survey found that only 46.3% of those questioned were aware of the law that obligates business owners to put up a sign that clearly states their return policy. The Ministry of Industry, Trade and Labor is in the process of advancing a bill proposal, by which the consumer would not have to be satisfied with the current return policy and could force the business owner to provide the consumer with a cash refund. Annual spending of all households on exchanges and returns stood at NIS 500 million in four main areas: housing equipment, books, computer games and footwear and clothing.