Guide to Retail Rights in Massachusetts

Definitions

A consumer is generally someone who is purchasing or leasing a product or service for personal, family, or household use. 

A merchant is generally someone who engages in retail sales or rental transactions of goods or services. “Merchant” does not mean an individual or private party who is making an isolated sale of real or personal property. Private parties are generally exempted from specific consumer laws, although there may be other laws that apply to them.

Advertising

Businesses are responsible for the truth of their advertisements. At all times a business representation should not be false or misleading; a merchant’s failure to disclose an important fact may be unfair or deceptive. Businesses therefore must disclose sale end-dates, may not base price comparisons on inflated prices, and may not advertise products they do not intend to sell as advertised. If mistakes are made in advertising, it is the businesses’ obligation to make corrections, and until the corrections are made, to honor the price offered, unless a reasonable consumer would recognize the mistake.

Sellers are required to have enough supply of advertised items available to meet reasonably anticipated demand and if they offer any form of a guarantee, must be clear on the details and characteristics of that guarantee.

It is not false advertising if a store runs out of an advertised item and any one of the following is true:

  • It had a reasonable quantity, but demand was extraordinary.
  • The ad stated that quantities were limited and no rain checks were available.
  • The seller offered a rain check.
  • The seller offered a comparable substitute item.
  • The seller can prove shipping delays.

A merchant should not try to attract consumers into store using one product’s advertisement, but then attempt to convince consumers to buy more extensive products once in the store.

Merchants cannot:

  • refuse to show or to sell the advertised products;
  • discredit advertised products’ terms and quality

If a store runs out of an advertised item, ask for a rain check, if one is offered, so you can buy the item at the advertised price at a later date. The store must notify you when the item is back in stock if it sells for $25 or more. The rain check must be honored within 60 days. The store may have a policy of no rain checks but this fact should be disclosed.

Warranties

In addition to any express warranties that a merchant makes about the goods it sells, implied warranties also protect consumers. Massachusetts law creates two implied warranties that no business may limit.

The implied warranty of merchantability means that a product must work as intended for a reasonable time. For example, the microwave will heat food. Massachusetts law states that any product purchased from a merchant should function normally, for its intended purpose and for a “reasonable amount of time”.

This warranty does not apply to to private party sales.

The implied warranty of fitness for a particular purpose means that the seller has reason to know of the particular purpose for which the consumer wants to use the goods, and that the buyer is relying on the seller’s skill or judgment to select or furnish suitable goods. Under this rule, the goods must be fit for that purpose, for example, the bike you tell the business that you want for off-road biking will be suitable for riding over rough terrain.

Only a judge can determine what is a reasonable amount of time for a given product.

To invoke this warranty the seller must have reason to know your particular purpose for buying a product; you must rely on the seller’s skill or judgment in selecting or providing a product to meet that purpose; and the seller must have reason to know that you are relying on his/her skill and judgment.

If the product is defective at purchase, or becomes defective during the period of the implied warranty, both the seller and the manufacturer are responsible for making it right.

Under Massachusetts law, a merchant cannot sell a product “as is”, “with all faults”, or with a “50/50” warranty”. A store’s regular return policy does not apply in the case of defective goods.

Refund, Return, and Cancellation Policies

Massachusetts law requires merchants to disclose their refund, return, and cancellation policies prior to the consummation of a transaction. A seller can have any type of return policy it wants... “all sales final,” “merchandise credit only,” “full cash refunds within 30 days,” and so on. A seller’s refund, return, or cancellation policy must be disclosed to the buyer clearly and conspicuously before the transaction is completed. Usually, this is done by means of a sign at the point of purchase. Printing the store’s return policy only on a cash register sales slip does not comply.

You may return goods within a reasonable period of time if no return policy was disclosed.

A seller cannot misrepresent its refund, return, or cancellation policy, or fail to honor any promises about it.

Defective Merchandise Exception

  • Merchant’s return, refund, and cancellation policy cannot apply to the return of a defective product.
  • If you purchase a defective product, then merchant must provide you with options of replacement, repair, or refund. See “Implied Warranty of Merchantability” for more information.

Specially-ordered merchandise may have additional restrictions

Restocking Fees

While there is no laws related to restocking fees, you want to check with the store prior to making your purchase if you think you may have to return an item.

Repairs and Services, Including Warranties and Service Contracts

It is an unfair or deceptive act or practice for a business to fail to provide in advance, upon the customer’s request, a written estimate of the cost of anticipated repairs, or the basis upon which the charge will be made, and the reasonably expected time to accomplish the repairs. It is also unfair or deceptive to misrepresent the need for repairs, to make or to charge for unauthorized repairs, or to state that repairs have been made if they have not, and to fail to disclose that there will be a service charge, even if no repairs are made for an in-home service call, if such is the case.

Cooling-Off Periods, Right to Cancel a Sale

There are certain limited situations in which a consumer has a right to cancel a contract and receive a refund for the return of the purchased item. The Attorney General’s Regulations and the Federal Trade Commission’s Cooling-Off Rule for door-to-door sales apply to sales of certain goods. Door-to-door sales are sales made away from the usual business place of the merchant (the main office or branch office); however, the rule does not apply to sales made entirely over the telephone or by mail.

At the time you agree to the door-to-door sale, you must be given:

  • Notice of the right to cancel,
  • Two copies of the cancellation form, and
  • A copy of your contract or receipt. The contract or receipt must be in writing, and list the name and address of the seller, the date of sale, an explanation of your right to cancel, and how you may assert that right.

To cancel, you must notify the seller in writing and or by the method provided in the contract, at the address given in the contract, by regular mail posted, by telegram sent, e-mail or by delivery, no later than midnight of the third business day following the signing of the contract. A business day under this law includes any calendar day except Sunday or holidays. Within 10 days of receiving your cancellation notice, the seller must return your payment. You must allow the seller to pick up the goods at your address, or if the seller requests, and you agree, you may ship them back at the seller’s expense and risk. If the seller does not pick up the goods within 20 days of the date of the notice of cancellation, they are yours to do with as you wish.

The FTC’s three-day cooling-off period applies to sales of goods priced at $25 or more at your home and sales over $130, made at a temporary location. It does not apply to sales of real estate, insurance, securities, or emergency home repairs. The Cooling-Off period applies to sales made at your home or when you buy an item at a location that is not the seller’s permanent place of business, and if you so choose, you have the option to cancel the sale and get a full refund until midnight on the third business day after the sale. Such sellers must include a Notice of Cancellation Rights in your receipt or contract at the time of sale, along with cancellation forms to be returned to the seller.

There are also Massachusetts statutes providing a three-day right to rescind for second mortgages, timeshares, health club contracts, and home improvement contracts.

The 3-day cancellation right does not apply to telemarketing solicitation sales agreements.

Unsolicited Merchandise

In Massachusetts, you are entitled to keep, without further obligation, merchandise delivered to you which you did not order. This rule applies whether the merchandise was mailed to you, or delivered by some other method.

Mail Order Rule

The Federal Trade Commission Mail Order Rule, applicable to items ordered by phone, fax, mail, television, or computer, states that a company must ship your order within the time limits it advertises. If no limit is advertised, the company must ship within 30 days after it receives your order, unless the company contacts you and you agree to a delay.

If you apply for credit to pay for the purchase (opening or extending a line of credit with the company), the time limit for shipping is extended to 50 days. This limit is not applicable to C.O.D. (cash-on-delivery) orders or orders for which your account is not charged until the order is shipped, or for orders for seeds and plants, photo-finishing, or magazine subscriptions (other than the first issue). Note that there is no rule that provides you cannot be charged for goods as soon as you order them, even if they will not be shipped right away.

Lay Away Plans

It is an unfair or deceptive act or practice for a store to fail to disclose or to misrepresent its lay away plan to those consumers seeking a lay away, or for a store to represent that a particular product chosen by the buyer or an exact duplicate is being “laid away” if that is not true, or to fail to disclose any time limits on the setting aside of merchandise.

It is also unfair or deceptive to increase the price of lay away goods, either by increasing payments or substituting lesser quality goods, or to fail to deliver the goods laid away or an exact substitute, when payments have been made, unless the buyer has previously agreed to changes in writing.

The store is also required to give the buyer a receipt for payments made as they are made, and, if requested, to give a list of the balance of payments made to that date.

Finally, it is unfair or deceptive to fail to disclose or to misrepresent in any way the policy concerning cancellations and repayments or non-repayment of payments already made, and if payments are not refunded, to fail to disclose that fact in writing.

Consumer Privacy When Purchasing by Credit Card or Check

Massachusetts has specific limitations on what information can be required when you use a credit card or check to buy something. When you make a purchase with a credit card, the merchant may not write or require you to write your address or telephone number on the slip, although the business may ask you this information if needed to ship or deliver your purchase to you.

If a business accepts a personal check as payment, it may not require you to provide a credit card number, or any personal information other than a name, address, driver’s license or state I.D. number, and daytime telephone number. A business may verify the name, signature, and expiration date on a credit card; it may not use this information to check whether the check writer has a line of credit to cover the check, unless this is agreed upon in the business’s contract with the card issuer.

However, a business, like a video rental store, may request and record a credit card number and expiration date as a deposit to secure payment in the event of default, loss, or damage.

Shopping Tips

Remember to read all advertisements carefully.

If you have questions about the ad, ask the seller. This applies to sales in person, or by mail or other means.

Comparison shop before you make any major purchase.

Since a seller is not required by law to give you a later sale price if the item you buy goes on sale after you buy it, feel free to ask if an item is going on sale soon, or if you do not need it right away, ask if there is a special season to buy items on sale. For Example:

  • Sales of linens tend to be in January; new motor vehicles often go on sale in the late summer or early fall, when the “model year” changes.
  • Seasonal items often go on sale mid-way through the season — after July 4th, summer clothing items are often marked down substantially

Fill out order forms clearly. If you do not want the merchant to substitute another item for one that is out of stock, let the seller know.

Do not give your credit card number or checking account number to a seller unless you are certain you know who the seller is, what the seller’s return, cancellation and refund policies are, and where you can contact the seller if you have problems or complaints.

When you use a credit card, you have additional rights to contest payment for defective or misrepresented goods, if the dispute involves a purchase over $50, made within your state or within 100 miles of your home.

Remember, paying for something with a debit card subtracts money from your account immediately. It is more difficult to dispute such transactions than it is to dispute credit card transactions.

Before ordering anything from on line from a catalogue, print advertisement, telephone or tv solicitation be sure you know the business you are buying from, the complete details of the product you are ordering, and understand all the terms of the transaction.

Gift Cards and Certificates

Purchasing & Using Gift Certificates

Inspect gift cards before buying. Verify that none of the protective stickers have been removed. Also make certain that the codes on the back of the card have not been scratched off to reveal a PIN number. Report tampered cards to the store selling the cards.

Read all accompanying literature that comes with the card or visit the website of the company you are purchasing the card from to ensure that you know what you are getting. Be sure to provide all of this information to the person to whom you are giving a gift card or gift certificate

Gift cards may look like credit or debit cards, but they are not. Even if a gift card carries a Visa or Mastercard logo, the card is not a credit or debit card and does not automatically come with the same protections if it is lost or stolen.

Using the Card or Certificate

Some gift cards or certificates can be used only at the retailer's store locations; others can be used at any retailer and online. Some large corporations own chains of different stores, and often their gift cards/certificates can be used at all chains (for example, Gap, Inc., sells gift cards that may be used to purchase merchandise from Gap, Banana Republic, Old Navy, and Piperlime). Read the fine print and make sure you understand the terms and conditions before you buy.

If you are the recipient of a gift card or certificate, make sure that you have the card's terms and conditions, the original purchase receipt, or the gift card's ID number. If they weren't given along with the card/certificate, ask for them from the person who gave you the gift, and then keep them in a safe place.

Expiration Dates

Massachusetts Gift Certificate Law

Under Massachusetts law, a gift certificate or a merchant credit slip (given for returned merchandise) must be redeemable for a minimum of seven years from its date of issuance ( M.G.L. c. 93, s. 14S). The seller must clearly indicate the date of issuance and expiration date on either the face of the certificate, or, if it is an electronic card with a banked dollar value, on the sales receipt, or by means of an Internet site or a toll-free number ( M.G.L. c. 200A, s. 5D ). If the expiration date is not made available by these means, the gift certificate/card is to be redeemable in perpetuity. This law is effective as of April 1, 2003. Gift certificates issued but not yet redeemed as of this date are also to be good for seven years from the date they were issued.

Once a gift certificate has been redeemed for 90 percent of its value or more, the consumer may elect to receive the balance of the remaining value in cash. A purchaser or holder of a gift certificate which, by its terms, authorizes the purchaser or holder to add value, which has been redeemed in part, such that the value remaining is $5.00 or less, must make an election to receive the balance in cash or continue using the gift certificate. A gift certificate with a zero balance is void.

Note: The term "gift certificate" does not apply to pre-paid phone cards ( M.G.L. c. 255D, s. 1).

Gift Card Expiration

Some gift cards have expiration dates; others let the user "reload" or add money to the balance on the card. Information about expiration dates and fees may appear on the card/certificate itself, on the accompanying sleeve or envelope, or on the issuer's website. If you don't see it, ask. If the information is separate from the gift, give it to the recipient with the gift to help protect the value of the card/certificate.

State law does not apply to gift cards issued by a national bank, even though these cards may be issued by an entity other than the bank. However, Federal law allows for fees to be assessed for a certificate or card if three conditions are met.

Expired Cards

If your card or certificate expires before you've had a chance to use it or exhaust its value, contact the issuer. Federal law now prohibits the sale or issuance of a gift card or certificate that has an expiration date of less than five years after the card or certificate is issued or funds were last loaded. If the card has expired and the funds are still valid, you may request a replacement card or certificate.

For example, if you have a reloadable gift card that has an expiration date but you have loaded new funds on it before the card expires, you may request a new card with no fee imposed.

Some issuers have stopped charging inactivity fees or imposing expiration dates, so it pays to check with the issuer to make sure you've got the most up-to-date information.

Fees

Some gift cards or certificates may have fees, such as: activation fees; transaction fees (either for all transactions, for a high number of transactions, or for certain types of transactions); monthly maintenance fees; replacement fees for lost or stolen cards/certificates; balance inquiry fees; fees for inactivity (especially for gift cards - if the card holder has not used the card over a long period of time, a fee might be deducted from the balance each month); or shipping and handling fees if the card or certificate is purchased online or by phone. Some fees may be paid in cash, but others are simply deducted from the value of the card or certificate. Before buying, consider potential purchase fees, as noted above. Also consider any potential fees for the recipient.

Generally, under Massachusetts law, a gift certificate or a merchant credit slip (given for returned merchandise) must be redeemable for a minimum of seven years from its date of issuance. State law, however, does NOT apply to gift cards issued by a national bank, even though these cards may be sold by an entity other than the bank.

For instance, certain mall gift cards may not follow the seven year rule and may also charge fees, because the cards are issued in conjunction with a national bank. National bank-issued cards may be redeemable for a shorter period of time-five years. These cards may also have fees attached that will diminish the value of the card over time-some have monthly "maintenance" or "dormancy" fees that may kick in when the card is not used within a few months; they may also have fees assessed for checking on the value remaining on the card; lost or stolen card fees; or replacement fees if the card expires by its own terms but you still have value remaining on the card you want to use. These fees must be disclosed to you, and can only be assessed if three conditions are met:

  • The card or certificate has to be inactive for at least one year;
  • No more than one such fee is charged per month; and
  • The consumer is given clear and conspicuous disclosure about the fees.

Services fees are defined as both account maintenance fees as well as activity-based fees.

Store Closing & Bankruptcy

If you have purchased a gift card or certificate and the retailer goes out of business, you may be able to receive some reimbursement for the value of the gift certificate.

If the retailer does not file for bankruptcy, but simply closes, that does not necessarily mean that you won't be able to use your gift certificate. Some businesses file in state court for an "assignment for the benefit of creditors," and that procedure may also provide for an orderly distribution of assets. Some businesses may otherwise provide for a way to transfer the value of a gift certificate to another location or to someone who buys the customer list.

If a business unfairly took advantage of consumers, the AGO may also bring a legal action seeking recovery of the value of unredeemed gift certificates or gift cards. Contact the Consumer Advocacy & Response Division (CARD) for help.

Bankruptcy

If the retailer files for the protection of the bankruptcy court, you should file a document called a "proof of claim" with the court. Include whatever information you have about the value of the certificate, and a photocopy of the certificate or gift card. Bankruptcy allows for the payment of claims depending on assets available.

If a company has announced that it has filed for Chapter 11 bankruptcy and is "reorganizing," the company may ask the court for the ability to honor gift certificates. It may be in the best interests of a company to maintain goodwill if it wants to continue operating, so this request makes good business sense, but it is not always certain that this request will be made to the court.

If a company files for "liquidation" in bankruptcy, through Chapter 7, there may not be assets available to pay off all or even some of the value of consumer gift certificates. Some bankruptcy courts consider gift certificates to be "consumer deposits" under the bankruptcy code, entitled to certain unsecured creditor priority over some other claims, but not all courts consider this to be the case.