Point of No Return


Six months after Alejandra Lopez bought a new computer monitor, its picture began to fade, then blur.

When she took it back last month to the Fry's Electronics store in Manhattan Beach, clerks plugged in the monitor to check things out. But even after the monitor began to smoke, the store wouldn't allow Lopez to exchange it because the purchase was made last October, well past Fry's 30-day deadline for returns.

"You don't buy a brand-new monitor expecting it to break in six months," Lopez argued.

But sometimes they do. And it's not just monitors. From fancy stereos and hand-held organizers to WAP phones and digital television recorders, the consumer electronics industry year after year cranks out a bewildering array of new devices. Many interconnect and have multiple functions--which means there's a higher risk of something going haywire.

As a result, the return process has become an unpleasant fact of life for many who dare to wade into the digital frontier. More than 8 million U.S. households had to return at least one electronic gadget in 1999 and 2000, according to a study commissioned by the Consumer Electronics Assn., an industry group in Arlington, Va.

For consumers, that has meant disappointment, frustration, scads of wasted time and, in some cases, money lost because of a common retail practice of charging customers a 15% to 20% "restocking fee." Manufacturers and retailers, meanwhile, lose millions of dollars a year on returned items, some of which have no defects but cannot be sold as new once the package has been opened.

The problem is especially acute with software. Consumers generally can't tell if a program has bugs until they try to install it. Most stores, however, won't issue refunds because software can be pirated easily then returned. At best, consumers can exchange it for a copy of the same title.

But that won't help if the program itself has glitches duplicated in every single disc. Such was the case with the popular computer game "Myst III: Exile," which recently shipped with problems ranging from an inability to recognize some hard drives to incompatibility with Intel-based video cards. The game's publisher, Ubi Soft Entertainment, has since issued fixes.

"Many users have tried and failed to return the game," said one user, Robert Cromartie. "My hope is that [consumer backlash] will lead to action at the state and federal level to reassert a consumer's right to get a refund for merchandise that doesn't perform to advertised specifications."

Fat chance.

"In the new consumer electronics market, we all have to be our own advocate," said Gail Hillebrand, senior attorney with Consumers Union in San Francisco, a consumer advocacy group.

These days, software and hardware often go hand-in-hand, further complicating the task of trouble-shooting. Toss in the nearly infinite number of PC configurations in the market, and the result is a Gordian knot of computer code.

"If you call the hardware folks, they blame the software. If you call software, they point the finger at the hardware," said Susan Henrichsen, a California deputy attorney general. "The home user has no clue. But somebody has to be responsible."

When it comes to software, it's unclear who is responsible, leaving consumers at the mercy of retailers and manufacturers. Software generally comes with a warranty and licensing agreement--known as shrink wrap agreements--that consumers don't get to read until they try to install the program. By that time, the package is opened and it's too late to get their money back.

Advocates at Consumers Union say they know of no legislation in Sacramento or on Capitol Hill that would address this issue. As a result, software shoppers generally must live by the rule of caveat emptor--buyer beware.

Returning hardware is easier, though not necessarily hassle-free. Surly clerks, blame-shifting and long lines are only the beginning. One of the most onerous features of this process is the restocking fee charged on opened boxes.

Retailers charge the fee because they often must discount opened or used merchandise. It's also used to discourage abuse.

"We found many products were purchased with the full intent to return them," said Bill Cimino, spokesman for Circuit City Stores Inc., based in Richmond, Va.

Nearly 70% of consumers in the CEA survey thought a restocking fee was "unacceptable." But only 6% of those who returned items were charged the fee, suggesting that the penalty is not uniformly imposed.

There are several ways around a restocking fee. If an item is defective, stores legally may not assess the fee. In California, retailers may not charge a restocking fee unless they post the policy either at the store entrance, at the cash register, on the price tag or on the receipt. And if customers persist, store managers often waive the fee.

Sandra Tsing Loh, author of the book "A Year in Van Nuys," recalled having to return two faulty notebook computers at Fry's Electronics and having to pay a $160 restocking fee on one because she had discarded the packaging. Although she wasn't charged a restocking fee for the other notebook, she did have to pay $70 to ship it back to the Burbank store from New York, where she was traveling.

"Within 30 days, I was out $230, and I still didn't have a laptop," Loh said.

Fry's no longer charges a restocking fee. The San Jose chain this year revamped its return process to resolve long-standing complaints about long lines at its return counters. Its biggest improvement: eliminating the requirement that customers must stand in two lines, one to obtain a credit voucher and another to cash the voucher.

"A year ago, we had complaints about our wait time. This year, we've had none," said Kathy Kolder, Fry's executive vice president.

After a consumer returns an item, there is a chance it will be returned to the shelf, even if it's defective. In California, those items must be distinguished from new merchandise, either through a sticker on the item or through a sign. Though clerks have to check returned items before reselling them, the CEA study found that only 26% actually scrutinized the contents.

Paul Pierce, a graphics designer from San Anselmo, recalled paying more than $700 for a copy of Adobe Photoshop at a Staples store in San Rafael. At home, he found that the box contained four empty discs and a ream of blank paper. When he returned to the store, the manager told him to contact the maker of the software.

"It's like you bought a gallon of milk and the milk is bad," Pierce said. "You don't go back to the dairy to return it. You go back to the store."

Pierce wrote a letter to the store manager.

The tactic worked. Pierce said he got a full refund. A spokeswoman for Staples Inc. said that although clerks are instructed to scrutinize returns, some merchandise can slip through unexamined.

Persistence also paid off for Lopez, who filed a complaint with the Better Business Bureau and kept calling several times a day for six days. Each time she talked to a different person, until she found someone sympathetic to her plight.

"You have to be flexible about the remedy," said Hillebrand of Consumers Union, which publishes Consumer Reports magazine. "Offer them a choice, so you're showing them you're not just out to take advantage of them."

Consumers in California are protected under the Song-Beverly Act, which says retailers must display their return policies if they differ from customary expectations, which are defined as seven days for a full refund or exchange with receipt. Items sold "as is" or as "final sale," for example, must be prominently identified as such.

Otherwise, items sold are protected under the act's "implied warrant of merchantability" clause, which states that goods sold must be reasonably fit for their intended purpose. But the definition of what is reasonable can be subjective.

Many consumers sign away that protection without even knowing it.

"The implied warrant of merchantability is often disclaimed or eliminated when you sign financing agreements and retail sales contracts," Hillebrand said. "At some stores, the waiver is printed on the backs of receipts."

Another disclaimer to watch out for is the "merger clause," which states that all prior conversations and claims made about the product are merged into the written document.

"It basically says all the oral promises don't mean anything," Hillebrand said.


Times staff writer Alex Pham covers the video game industry.


Return Policy

Store: Amazon.com

Policy: Buyers have 30 days within receipt of the shipment to get a full refund. Items must be in original condition and have original accessories and packaging. Buyers pay the cost of shipping returned items, unless the return is the result of Amazon's error.

Restocking fee: Software, music, videos and DVDs returned without their original packaging or in an "unsellable" condition incur a 50% restocking fee, even if they are returned within 30 days of purchase. Unless the return is the result of Amazon's error, all other items will incur a 20% restocking fee if returned more than 30 days after delivery.

Invoice required: No invoice required. Customer must, however, state reason for return on the back of the packing slip.

Opened software: Incurs a 50% restocking fee.

Store: Best Buy Co.

Policy: Most items require returns within 30 days of purchase. Computers, monitors, printers, laptops, camcorders, digital cameras and radar detectors must be returned within 14 days.

Restocking fee: 15% on opened laptops, camcorders, digital cameras and radar detectors unless the item is defective.

Receipt required: Yes.

Opened software: No refunds. Buyers can exchange defective items for the same title.

Online: Policy is the same. Items purchased online may be returned at stores. Buyers pay shipping charges unless the product is defective.

Store: Buy.com Inc.

Policy: Non-clearance items may be returned within 30 days of shipping date. Clearance store products may be returned within 14 days. Opened laser or inkjet printers, fax machines and wireless PDAs may be exchanged for the same item within 30 days of shipping but not refunded. Buyer pays for shipping unless the item is defective.

Restocking fee: No.

Invoice required: Yes.

Opened software: Exchanges only for the same title within 30 days.

Store: Circuit City Stores Inc.

Policy: Circuit City will exchange or refund most items if returned with the original packaging, all manuals and accessories within 30 days of purchase. Returns of laptops, computers and computer-related peripherals, such as PDAs, Web cameras, digital cameras, laptops, monitors, printers, scanners and mice must occur within 14 days.

Restocking fee: 15% on opened computer or computer-related equipment unless the item is defective.

Receipt required: Not if the customer gives a phone number at the time of purchase so that the transaction can be traced.

Opened software: No refunds, just exchanges for the same title.

Online: Policy is the same. Items purchased online may be returned at stores.

Store: CompUSA Inc.

Policy: Returns or exchanges within 14 days of purchase.

Restocking fee: 15% for opened boxes, unless the item is defective.

Receipt required: Yes.

Opened software: No refunds, just exchanges for the same title.

Online: Same policy. The company refunds shipping charges if the item is defective. Otherwise, the customer pays for shipping and insurance. Some items purchased online may not be returned at retail stores.

Store: Electronics Boutique

Policy: Full refund or exchange within 10 days of purchase.

Restocking fee: No.

Receipt required: Yes.

Opened software: Full refund or exchange within 10 days of purchase.

Store: Fry's Electronics Inc.

Policy: Refund or exchange within 30 days of purchase. Buyers of laptops, memory cards, CPUs and CD and DVD recorders have 15 days.

Restocking fee: No. Fry's might give partial refunds for used or damaged products or for items that are missing parts or their original packaging.

Receipt required: Yes.

Opened software: No refunds, just exchanges for the same title if defective.

Store: Good Guys Inc.

Policy: Return for exchange or refund within 30 days, with receipt. Cameras and camcorders have 14 days. No refunds on consumer electronics accessories such as batteries.

Restocking fee: Only if there are missing parts or if merchandise is damaged.

Receipt required: Yes.

Opened software: Refund if defective under the store's No Lemons Guarantee.

Online: Items purchased online cannot be returned at stores. TV sets larger than 13 inches purchased at Goodguys.com require a 15% restocking fee. The company pays all shipping charges.

10 Tips for Many Happy Returns

Short of going to Small Claims Court, there are several things consumers can do to get satisfaction.

1. Keep the receipt and the box, even though the return deadline may have expired. Retailers are much more willing to accept a return if the item is in its original packaging. "If you have a receipt, they tend to be quite liberal," said Tod Marks, senior editor at Consumer Reports magazine.

2. If you don't get the answer you want from one person, try again. Another store manager might be more sympathetic.

3. Be polite. "Honey wins over vinegar time and time again," Marks said.

4. Before buying, talk to the store manager. Establish a relationship with the manager and confirm all your expectations about the product so you have someone to turn to in case things go wrong. If possible, get the store manager to make a note on your receipt about things you agree to, such as waiving the restocking fee.

5. Use a credit card. In a dispute, the credit card company can withhold payment to the retailer and investigate the dispute.

6. Read the return policy. Ask as many "what if" questions as possible. Assume Murphy's Law: Anything that can go wrong will.

7. Try the product as soon as possible. Test all its features before the window of opportunity for returning the item passes.

8. Beware of items that are marked "As Is" or "All Sales Final." You will not be able to return these items, even if they are defective.

9. Be flexible about the remedy. Show that you aren't out to take advantage of the retailer. Suggest several outcomes that will satisfy you, such as replacing the item for a similar one of a different color or brand.

10. Write a letter detailing your predicament and send it to the store's manager, the retailer's headquarters if it is a chain, the Better Business Bureau, and state law enforcement if you think a law has been broken.

Sources: Tod Marks, Consumer Reports magazine; Gail Hillebrand, Consumers Union advocate group; Susan Henrichsen, California deputy attorney general for consumer affairs; and the California Department of Consumer Affairs

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