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Recently, a young Nigerian woman, Ada King, came online to call out a hair vendor for selling a wig to her sister that she described as entirely different from what was ordered. She alleged that the seller knowingly sent a different item.
In the clip, the X user said that the problem she had with the seller was that the latter mentioned that she operates a no-refund policy in her business.
Ada’s experience highlights a new trend in Nigeria’s retail and service industry around notices such as “no refund after payment.” These notices are often intended to manage operational risks associated with product returns or order cancellations.
Most times, this policy is usually conveyed to buyers through in-store signage, printed receipts, or the terms and conditions of online platforms.
As part of DUBAWA’s media and information literacy project, we examined the position of Nigerian laws on refund policy within the business climate.
What does the law say?
The no-refund policy is a common practice in which a business explicitly states that payments for goods or services are non-refundable. This effectively limits or excludes the purchaser’s right to recover the purchase price after the transaction is completed.
To understand the legality of the no-refund policy, we looked at the provisions of the Federal Competition and Consumer Protection Act (FCCPA) 2018.
We found in the Act that section 122 provides that consumers have the right to return goods and receive a full refund if the products are defective, unsafe, or do not match the specifications or samples agreed upon at the time of purchase.
Section 127 of this Act prevents businesses from enforcing agreements or terms that are manifestly unfair, unreasonable, or unjust to consumers.
Section 129 also makes it illegal for a service provider or vendor to include terms in a contract or ticket that waive, limit, or deprive a consumer of their rights under the Act.
Additionally, we also gathered that the Sale of Goods Act (1893), which is the main law governing the sale of goods in Nigeria, further reinforces these protections.
The Act, adopted as part of the colonial laws, contains implied conditions that goods must be reasonably fit for their intended purpose and of merchantable quality. Therefore, where goods fall short of these standards, the buyer has the right to seek remedies.
These reliefs include, but are not limited to, a refund, regardless of any no-refund policy. This means that the implied conditions considerably limit the enforceability of no-refund policies.
Lawyers react
In a bid to fully grasp the meaning of these provisions, we reached out to Lawal Awwal, an Abuja-based legal consultant.
Lawal explained that the FCCPA is a primary law regulating consumer protection and commercial fairness in Nigeria.
Speaking further, he said the Nigerian law does not have an absolute or blanket no-refund policy because the clause seeks to prevent citizens from enjoying the rights granted to them by the country’s Act on consumer protection.
“Even though businesses have the power to regulate returns of goods under legitimate situations, they cannot go outside the limits provided by the law of the nation [where they are operating] as the law overrides any contractual terms,” he told DUBAWA.
Fakunle Ikeoluwapo, a legal associate with Lagos-based Iris Attorneys LP. Fakunle stated that the Nigerian law allows purchasers of goods and services to get a full refund under some situations.
“The law is clear on the no-refund policy. The FCCPA governs businesses and particularly the interests of consumers. The Act explicitly states that consumers may return goods to customers and also get a full refund under different circumstances,” she said.
She added: “In fact, Section 120 [of the same Act] permits consumers to cancel advanced bookings subject to some conditions while the supplier also reserves the right to demand a cancellation order.”
Fakunle explained that a Nigerian court can order a refund, although the peculiarity of each case will determine whether or not it will be granted and the amount.
What are the Nigerian courts saying?
Both lawyers referenced the judicial decisions in Patrick Chukwuma v. Peace Mass Transit Ltd (2021) and Edem Ekeng & Anor v. Wakanow.com Ltd (2022) while sharing their thoughts.
DUBAWA dug up the details of the cases and studied them, including the courts’ position.
In the first case, Patrick purchased a N500 transport ticket from Peace Mass Transit in Enugu. After a two-hour delay waiting for the vehicle to fill up, he decided to cancel his journey. The transport company refused to refund his money, citing their strict ‘no refund after payment’ policy.
He sued the company, and the court held that a transport company’s refusal to refund a passenger following undue delay violated the FCCPA, in spite of its no-refund policy and awarded damages against the company.
In a similar vein, the facts of the second case are that Edem and another claimant booked flights through Wakanow.com Limited and later requested a refund following a service failure. Wakanow refused the refund based on an internal policy that was only disclosed to the customers after payment was processed.
They sued Wakanow for a breach of contract, arguing the company failed to disclose its no-refund policy prior to the transaction. Here, the court declared a no-refund duties policy illegal where it was communicated only after payment and used to justify failure to fulfil its contractual obligations.
According to the two lawyers, it is not enough to claim that a consumer agrees to a refund policy of a business before purchase. Once the consumer returns the goods in reasonable condition, such a person should be allowed the right to a refund.
Lawal said that once goods or services are unfair, unreasonable, defective or in bad condition, a consumer can go ahead to seek a refund for their money. He added that whenever this is denied, the customer can approach the court for the enforcement of the right.
The lawyer cautioned that the Nigerian laws allow businesses to have control over their operations, in a bid to ensure buyers do not use unscrupulous means to dupe them.
However, he said, any form of business regulation should be made in a way that is lawful and includes consumer rights.
Conclusion
DUBAWA’s research reveals that the Nigerian laws provide for consumer rights to a refund in situations where goods/services are defective, unfair or in bad condition.
While businesses can formulate internal policies to have control over their modus operandi, this does not mean they should hide under a no-refund policy to prevent consumers from getting their money back in situations where what was sold is different from what was ordered.
