North Hollywood, CA asked in Consumer Law and Business Law for California

Q: Client wants refund on sale pre-paid beauty package, now wants to sue. Website policy states NO refund on sale items! CA

My small beauty business is in California (Los Angeles county). I offer discounted pre-paid beauty service packages. My client purchased one of these packages and now a year later she wants full refund. My policy is posted on my website, which states that there is NO refund on sale items/ discounted services/ packages. I offer in store credit which can be used for any other provided services or can be transferred to another person. This client now claims that due to medical reasons she can’t get the service. At first we agreed on her using her credit towards my other services. Now suddenly she changed her mind and threatened me that she is going to small claim court and sue me if I don’t refund her money. Do I have to worry about this? As far as I know, it is not illegal in California to have my own refund policy. There are also other even bigger businesses that have the same policy as I do…like example Groupon. They offer store credit, NOT refund! Please,give me legal advice

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2 Lawyer Answers

A: You never know what is going to happen in small claims court. That court does not always follow established rules and stretches the law to be "fair." And the judge may spot something else in your business practices or products that the judge thinks is deceptive or unfair, even if it was not raised by the customer. That's your downside.

The upside is you might win. Have any negative reviews been posted by this customer? If not, that should be a motivation on your part to get this resolved and done with before something appears online. I suggest you offer a 50% refund and tell the customer it's that, or else you feel strong enough in your position that you are happy to let a judge decide.

A further consideration in your favor is that it takes several hours of personal time for the customer to go there just to fill out and file the paperwork, (and most courts are in a dangerous part of town), there is an out-of-pocket expense for the filing fee and service fee of the papers, and cumulative aggravation just to drag anyone into small claims court. Most people with a good case will never follow through to file.

James L. Arrasmith
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Answered

A: Under California law, businesses have the right to establish their own refund policies, provided these policies are clearly communicated to the customers before the purchase. If your policy of "No refunds on sale items" was clearly posted on your website and made known to the client at the time of purchase, generally, you are within your rights to enforce this policy. This is especially relevant if you offer alternatives such as store credit, which you have done.

However, it's important to consider that the customer's claim of medical reasons for not being able to use the service could introduce complexity to the situation. While your policy may be clear, the customer might argue that unforeseen medical circumstances should warrant an exception to the policy. The court's view on this could vary, and outcomes in small claims court can sometimes be unpredictable.

If the client decides to pursue legal action, it would be wise to gather all documentation related to the purchase and communication with the client, including the policy details as they were presented at the time of sale and any correspondence regarding the dispute. While your policy seems to be in line with common business practices, the specifics of the case and the documentation supporting your position will be crucial. Consulting with a legal professional who can provide guidance based on the specifics of your situation and California law would be a prudent step to take.

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