“All sales final.” “No refunds without receipt.” “Deposits non-refundable.” “Gift card expires in 12 months.” Walk through the plazas along Queen Street or Steeles Avenue and you will find signs like these taped beside many cash registers. Some of them are perfectly legal. Some are legal in part. At least one of the four is usually unlawful, and the store owner may have no idea.
Ontario’s consumer protection rules were mainly written to protect shoppers, but they matter just as much to the person behind the counter. Knowing them lets you write a clear policy, train staff, and settle a complaint before it becomes a ministry investigation or a Small Claims Court claim. Much of it is not difficult once you see how it is organized.
This article is general information for owners of retail businesses and is not legal advice. The governing statute is currently the Consumer Protection Act, 2002 (the CPA). A replacement statute, the Consumer Protection Act, 2023, has been passed, and the 2002 Act stays in effect until it is proclaimed in force, so check the current status before you redo your documents. These rules generally apply to individuals buying for personal, family, or household purposes, not to business purchases.
Your Return Policy Is Mostly Your Decision
This surprises shoppers more than it surprises retailers. Ontario law does not give a general right to return an item simply because the customer changed their mind. Refund, exchange, and store credit terms generally come from your own policy. The province does encourage stores to put that policy in writing and tell customers about it at the time of sale.
That leaves you with real choices, and with some real risks:
- State the policy where people will actually see it, on the receipt and at the till
- Say what is covered: time limit, condition of the goods, need for a receipt, restocking fee, and whether the remedy is a refund, an exchange, or a credit
- Identify items that cannot be returned, such as personal care products or custom orders
- Make your staff apply it consistently, and tell them who can make exceptions
The risk comes from what the policy cannot do. A return policy controls change-of-mind returns. It cannot override rights given by statute. A consumer may have a right to cancel for late delivery, for an unfair practice, or under a specific type of agreement, regardless of what the sign says.
Nor can it override quality standards. Goods sold to consumers must generally meet the implied conditions in the Sale of Goods Act, including that they are reasonably fit for their purpose and of merchantable quality. Under the CPA, these implied conditions and warranties cannot be waived in a consumer agreement. A “final sale” sign means you do not have to take back a working sweater that the customer no longer likes. It does not mean you can refuse to deal with a defective blender. Similarly, any term that tries to take away a consumer’s CPA rights is generally void, including, in most cases, clauses that force a dispute into arbitration or bar a class proceeding.
Be Careful About What You Say
Section 14 of the CPA makes it an unfair practice to make a false, misleading, or deceptive representation. The list of examples is long, and it reaches everyday retail conduct:
- Calling refurbished electronics “new”
- Claiming a product has features, certifications, or approvals it does not have
- Saying that goods are “authentic” or “original” brand items when they are not
- Exaggerating a discount from a “regular” price that was never really charged
- Claiming a limited supply when that is false
- Implying that a government rebate is available when the customer does not qualify
- Using ambiguous wording about a material fact, or leaving a material fact out
Section 15 adds “unconscionable” representations, such as taking advantage of a customer who, because of language, age, or disability, cannot protect their own interests, or charging a price that far exceeds what similar goods sell for elsewhere. Brampton’s many newcomers and multilingual customers are a good reason for retailers to train staff carefully here. A sales pitch that takes advantage of someone’s limited English may be more than bad manners.
A customer who entered an agreement after an unfair practice may rescind it, generally within one year, and a court can award damages, including punitive damages. Engaging in unfair practices is also an offence under the Act, and both the business and individual directors or officers can face charges.
Federal law adds another layer. The Competition Act, enforced by the Competition Bureau, prohibits false or misleading advertising in general, along with specific conduct such as drip pricing, where an advertised price is unattainable because mandatory extra fees get added on later. Taxes and duties can be added, but a mandatory “service” or “processing” fee should be part of the price shown. Be cautious about environmental claims and “sale” pricing as well, and be able to back them up.
Deposits, Layaways and Special Orders
Furniture, appliance, and custom clothing retailers run into this one often. An agreement where the customer pays or receives the goods later is generally a future performance agreement. If the total exceeds $50, it must be in writing, and the customer must get a copy. It should describe the goods, the itemized price with taxes and any other charges, the payment terms, and the delivery date or commencement date.
If the goods are not delivered within 30 calendar days after the agreed delivery date, the consumer may generally cancel at any time before delivery and get a refund. If no date was written down, the 30 days can run from the date of the agreement. A customer who accepts late delivery generally loses the right to cancel for that reason, and any change to the delivery date should be recorded in writing and agreed to.
So a wedding-wear shop with a custom lehenga on a long overseas lead time, or a furniture showroom relying on a supplier’s vague date, should not write in an optimistic date. Choose a realistic one, get any change agreed in writing, and keep the customer informed.
A deposit may or may not be kept when a customer simply changes their mind. It depends on your agreement, on whether the amount is a true deposit, and on how much loss you can show. Write clearly what is refundable and when, and do not assume that “non-refundable” solves every situation. Missing paperwork can also create a longer right to cancel, which means a text message and a handshake are not enough.
Gift Cards and Loyalty Points
The gift card sign described above is often the unlawful one. The rules are simple:
- Most retail gift cards cannot have an expiry date
- Activation fees, service fees, and dormancy fees are generally prohibited
- You may charge to customize a card or replace a lost or stolen one
- Restrictions and conditions must be clearly and visibly stated
Exceptions apply to cards for one specific service, such as a single massage, and cards issued for charitable purposes. Mall-wide cards have their own rule, which allows a dormancy fee of up to $2.50 a month after 15 months. A paper “credit note” given in place of a refund may be treated in the same way as a gift card, depending on how it functions, so be careful about writing “valid 90 days” on one without getting advice.
Loyalty programs have their own limits. Points generally cannot expire merely because time has passed. A program can close an inactive account if the membership agreement says so, subject to certain exceptions.
Selling Online and Over the Phone
If your store has a website, or if customers order through Instagram and pay by e-transfer, the CPA’s internet or remote rules may apply. For an internet agreement over $50, the business must disclose prescribed information before the customer commits, including its name and contact details, a fair description of the goods, itemized pricing, delivery details, and return or exchange terms. The customer must have an express chance to accept or decline and to correct errors, and they must receive a copy of the agreement within a set time. If you do not comply, the customer may have a right to cancel.
These rules apply when either the business or the consumer is in Ontario. A Brampton seller therefore cannot avoid them by saying its terms are governed by another jurisdiction’s law, and a website template written for a U.S. market may not fit. Deliver late and the customer may also have a cancellation right, with a specific time frame in the Act.
Door-to-door or at-home selling is a different category again. A direct agreement negotiated outside your place of business generally carries a 10-day cooling-off period. Certain products, such as furnaces and water heaters, cannot be sold at a consumer’s home unless the consumer initiated it. If you sell at a home show or a community event, ask whether your agreement is still “direct” and which paperwork is needed.
Refunds, Cancellation and Credit Cards
When a consumer validly cancels, the Act sets timing. After a cooling-off cancellation, for example, the business must refund within 15 calendar days, and the consumer must return any goods. Do not simply ignore the notice. A letter can be sent in any way that shows when it was delivered, including email, and you should have a process for dealing with such notices, so that they do not sit in a general inbox.
Under section 99, a consumer who paid by credit card and validly cancelled, or who paid in a way that contravened the Act, may ask the card issuer to reverse the charge. Retailers therefore have an extra reason to take these notices seriously, since chargebacks can follow.
If a customer gets an estimate for a service, such as a repair, you generally cannot bill more than 10 per cent above that estimate unless the customer agrees in writing to the extra charges. Include this in staff training for any service counter. Also, do not bill for goods or services the customer did not request, since consumers generally have no obligation to pay for unsolicited goods or services.
Handling a Complaint Before It Grows
Many problems can be resolved at the counter. Train staff to do the following:
- Listen, note the date, and write down what the customer wants
- Escalate instead of arguing, and give a name and a timeline for an answer
- Ask for the receipt or other proof, but do not assume the customer is lying without it
- Avoid threats, and avoid posting a customer’s details or video online
- Refer any written reference to the CPA, lawyers, or chargebacks directly to the manager
Consumers can complain to the ministry through Consumer Protection Ontario. The ministry can mediate, investigate, and take enforcement action, and it maintains a public Consumer Beware List. A consumer can also sue, often in Small Claims Court at 7755 Hurontario St. in Brampton, and an ambiguous agreement will generally be read in the consumer’s favour. A clean file of the receipt, agreement, delivery records, and messages is usually your best protection.
A Half-Day Compliance Check
Pick a slow morning and walk through your business as a customer would. Read every sign. Pull an example receipt, a deposit form, a gift card, and your website checkout. Then ask:
- Does each of our forms show the required information?
- Are any of our signs inaccurate as to rights the Act protects?
- Do our gift cards or credit notes state an expiry or a fee?
- Are our sale prices truthful and our fees all included?
- Can any staff member explain the policy correctly?
- Who answers a written cancellation notice, and how fast?
If you find problems, they are generally easy to fix. Our contracts team can review your sales forms and online terms, and our corporate law group can look at how they fit with your wider business documents. If a customer complaint or ministry letter has already come in, you can contact the firm so that your reply is accurate and measured.