Insights overview

Store closures

Now that household names like John Lewis and Arcadia have announced the closure of their stores, we are seeing a wave of non-food retail store closures. This raises many practical issues for businesses and rightly, how the business best continues to pay its staff for as long as possible has been a key focus. But there are other areas retail operators will need to be thinking about. For example, how might the closure of stores impact a returns policy? If you would ordinarily accept a non-faulty return in store within 30 days of the date of purchase, do your customers now lose their right of return if your store closure makes it impossible for them to return their goods within that 30 day window? Perhaps you might consider amending your standard return policy to allow customers to return items purchased less than 30 days before the closure for 14 days after you re-open or even extend the usual period to 100 days like we’ve seen some stores do in the hope that they will have re-opened before that 100 day window expires. Either seems a sensible approach to us but retail operators will then need to think about how they implement the amendment from a contractual perspective.

Whilst accepting returns for non-faulty goods is expected across the retail sector, it’s not mandatory. By contrast, retail operators are legally obliged to provide a refund or exchange in certain circumstances where the goods in question are in some way faulty. The closure of all stores (and therefore the lack of a return point) therefore presents problems from a legal compliance perspective if consumers’ rights are prejudiced by the closure. If a retail operator has closed all of its stores, in so far as possible, it would be prudent to maintain a back office location that faulty goods can be returned to, even if only by post.

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