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Depreciation after return

Written by Jolien Pastoors
 

At ValuedShops, we regularly receive questions regarding returning items and the associated regulations. In this blog we will discuss when a consumer returns a damaged product. What rights do you have as a merchant in these situations and how can you correctly record depreciation in your terms and conditions and return policy?

What is depreciation?

Impairment means that a product has become worth less after it has been returned by a customer. This can happen due to damage to the product, incomplete returns (for example, missing accessories or manuals), or signs of use caused by use beyond what is necessary to evaluate the product. When this happens, you may charge depreciation to the customer. In some cases, you can even apply up to 100% depreciation!

When can you deduct depreciation?

You may deduct depreciation from the purchase price if:

  1. The product is damaged: For example, due to careless use or poor packaging during return.
  2. The product is incomplete: When the product is returned incomplete, such as missing parts, instructions for use or accessories.
  3. Obvious signs of use are visible: When the product shows signs of use beyond what is necessary to evaluate the product.

It is important that you can prove that the depreciation was caused by the customer, regardless of whether it happened during the 14-day cooling-off period or the return. This means inspecting the product properly upon return receipt and clearly documenting the damage.

For example.

Scenario 1: Spills/Spills while trying on

Suppose a customer buys a white blouse and drops a glass of red wine over it while trying it on. In this case, you don't have to accept the return outright. By law, you are entitled to offset the damage against the refund. If the blouse has become unsellable due to the stains, you can charge the depreciation. We recommend accepting the return and paying out at least the difference between the purchase price and the selling price to the customer.

Scenario 2: Blouse broken while trying on

When a customer buys a blouse and pulls off some buttons while trying on, the blouse may be saleable again after repair. In this case, you can charge for the repair and refund the remaining amount to the customer.

Damage during shipment and return

Damage during shipping is at the webshop's risk. An exception to this rule is when the customer has explicitly requested a different shipping method than the standard shipping method you offer as a webshop. The risk of damage during a return shipment is always at the customer's risk. Even if you yourself offer a free return option by, for example, providing a free return label, this does not mean that you are responsible for the return.

General conditions and return policy

To apply depreciation, it is necessary to clearly define this in your general terms and conditions and return policy. You must also comply with the obligation to inform the consumer. Keep the following statements in the general conditions and return policy:

  • Clearly state that depreciation can be applied if the product is damaged, incomplete or overused upon return.
  • Give examples of situations where depreciation may be applied, such as damage due to careless use or missing parts.
  • Make sure your customers are aware of the terms and conditions and return policy. By complying with the duty to inform, you will avoid many problems.

So.

You may legally never refuse a return on the grounds of damage, but you may pass the damage on to the customer. Want to know more about rights and obligations surrounding damage during shipping and returns? You can read more in this blog.