Introduction
Imagine buying a product online and discovering, after delivery, that it is completely different from what was advertised. You contact the seller and request a refund, only to receive a familiar response:
“No refund.”
The same response is often printed on receipts, displayed in shops, written on social media pages, or included in the terms and conditions of online businesses.
But does writing “NO REFUND” on a receipt or posting it on Instagram make the policy legally enforceable?
Not necessarily.
In Nigeria, businesses are entitled to establish reasonable terms governing their transactions. However, those terms cannot simply override statutory rights granted to consumers by law. The principal legislation governing consumer protection is the Federal Competition and Consumer Protection Act, 2018 (FCCPA).
The FCCPA provides consumers with specific rights relating to cancellation of bookings and orders, return of goods, quality of goods and services, misleading representations and unfair contractual terms. (FCCPC)
What is a “No Refund” Policy?
A no-refund policy is a term or business practice by which a seller or service provider informs customers that money paid for goods or services will not be returned after payment.
Such policies take different forms, including:
- “No refund after payment.”
- “Goods sold are not returnable.”
- “No refund or exchange.”
- “All sales are final.”
- “Deposit is non-refundable.”
- “Tickets purchased cannot be refunded.”
Businesses may adopt these policies for legitimate commercial reasons. For example, a business may want to discourage frivolous cancellations, protect itself against losses arising from specially ordered goods, or ensure that customers take transactions seriously.
However, the existence of a commercial reason does not mean that the business can contract out of every legal obligation imposed upon it.
Does Nigerian Law Permit a Blanket “No Refund” Policy?
A blanket policy which purports to deny a consumer every possible right to a refund cannot automatically defeat rights created by the FCCPA.
This distinction is important.
The law does not mean that every customer who changes their mind after purchasing an item is automatically entitled to demand a refund in every circumstance. Rather, the FCCPA establishes particular circumstances in which consumers have rights to cancel transactions, return goods or obtain refunds.
Therefore, the legality of a refund refusal depends substantially on why the customer is requesting the refund, what was purchased, the terms of the transaction, and the statutory rights applicable to the transaction.
The Right to Cancel an Advance Booking, Reservation or Order
Section 120 of the FCCPAis particularly important.
It provides consumers with a right to cancel an advance booking, reservation or order for goods or services, subject to a reasonable charge for cancellation by the supplier or service provider.
The provision is significant because it demonstrates that a business cannot simply announce that payment automatically eliminates every possibility of cancellation.
The cancellation charge, however, must be reasonable. The law therefore does not necessarily require a business to absorb every financial consequence arising from a customer’s cancellation.
The important point is that the business’s cancellation terms must operate within the framework established by the FCCPA.
When Can a Consumer Return Goods and Demand a Refund?
Section 122 of the FCCPAprovides important protection for consumers.
A consumer may return goods and receive a full refund where the statutory conditions are satisfied. These include situations where goods intended for a particular purpose communicated to the supplier are subsequently found to be unsuitable for that purpose.
The provision also addresses situations where a consumer did not have an opportunity to examine goods before delivery and, within a reasonable time after delivery, rejects them because they do not correspond with their description or sample, or are not of the type and quality reasonably contemplated in the sales agreement.
This is particularly relevant to online shopping.
A customer ordering clothing, electronics, furniture or other goods online may have paid for an item without physically examining it. If what is delivered materially differs from the agreed description, sample, type or quality, a seller cannot simply rely on a printed “no refund” statement to defeat the consumer’s statutory rights.
The FCT High Court had also considered the application of section 122 in the case of BARRISTER DAUDA D. MUHAMMED v. RAZOR SHARP COLLECTIONS LIMITED & ANOR where the court recognised the statutory circumstances in which a consumer may reject goods and receive a full refund.
What if the Goods Are Defective?
The position is even clearer where the goods are defective or unsafe.
The FCCPA recognises a consumer’s right to return unsafe or defective goods under applicable law. Section 122 also provides additional circumstances in which goods may be returned for a full refund.
Consequently, a statement such as:
“No refund even if the product is defective”
cannot simply be treated as an effective way of removing statutory consumer protection.
A business cannot ordinarily transform defective performance into acceptable performance merely by printing a disclaimer on its receipt.
What if the Customer Simply Changes Their Mind?
This is where businesses and consumers sometimes misunderstand the law.
A consumer’s right to a refund is not necessarily unlimited.
For example, a customer who purchases a perfectly satisfactory product, changes their mind and simply decides that they no longer want it may not necessarily stand in the same position as a customer who receives a defective product or a product that materially differs from the agreed description.
The specific circumstances of the transaction therefore matter.
A lawful refund policy can establish reasonable procedures for:
- requesting cancellations;
- returning goods;
- identifying defective goods;
- processing refunds;
- imposing reasonable cancellation charges where permitted;
- dealing with customised or specially ordered products; and
- addressing circumstances where the consumer is responsible for damage to the goods.
What a business cannot safely do is formulate an absolute policy which purports to eliminate statutory rights altogether.
Section 129: Can a Contract Remove Consumer Rights?
Section 129 of the FCCPA is particularly significant when examining contractual terms and exclusion clauses.
The FCCPA restricts businesses from imposing terms and conditions that purport to limit, exclude or waive certain consumer rights protected by the Act. The FCCPC expressly identifies section 129 as prohibiting notices or agreements that attempt to limit or exclude liability in circumstances covered by the Act, including rights relating to defective performance and implied obligations. (FCCPC)
This means that the fact that a customer agreed to a term does not necessarily end the legal enquiry.
Freedom of contract is important, but contractual freedom operates within the limits imposed by legislation.
A business cannot necessarily say:
“The customer agreed to our terms, therefore the FCCPA does not apply.”
Where the contractual term conflicts with a mandatory statutory consumer protection, the statutory provision may prevail.
The Case of Patrick Chukwuma v. Peace Mass Transit Ltd
One of the clearest Nigerian decisions concerning a “no refund” policy is Patrick Chukwuma v. Peace Mass Transit Ltd.
The claimant purchased a transport ticket but subsequently sought a refund after experiencing significant delay affecting the journey. The transport company relied on its “no refund of money after payment” policy.
The matter came before the Enugu State High Court, which considered the relationship between the company’s policy and the provisions of the FCCPA.
The Court declared the “no refund” policy illegal, null and void and awarded ₦500,000 in damages against the company. The decision was based principally on sections 104, 120 and 129 of the FCCPA. (TheCable)
The decision is particularly important because it demonstrates that a business cannot necessarily rely on an internally created policy to defeat a consumer’s statutory rights.
The FCCPC subsequently described the judgment as one of the decisions reinforcing consumer protection in Nigeria. (FCCPC)
What About Online Businesses?
The issue is particularly important for online vendors.
Unlike a traditional physical shop where a customer may examine a product before purchasing it, an online customer may rely entirely on photographs, descriptions, specifications and representations supplied by the vendor.
This creates greater potential for disputes concerning:
- colour;
- size;
- quantity;
- quality;
- specifications;
- functionality;
- authenticity;
- condition; and
- whether the product corresponds with the description provided before payment.
A vendor cannot necessarily avoid responsibility for inaccurate representations by simply adding “no refund” to its page.
The FCCPA also protects consumers against false, misleading or deceptive representations concerning material facts relating to goods and services. (Businessday NG)
Can a Business Have a Refund Policy?
Yes.
The law does not prevent businesses from establishing refund policies.
In fact, a clear refund policy can be useful because it informs customers in advance about the procedures applicable to cancellations, returns, exchanges and refunds.
The problem arises where the policy is drafted as an absolute exclusion of rights that the law has already granted to consumers.
A better approach for a Nigerian business is therefore not simply to write:
“NO REFUND.”
Instead, the business should formulate a refund and returns policy that identifies the circumstances in which refunds, replacements or exchanges will be available, while expressly preserving rights that cannot lawfully be excluded.
This approach protects both parties.
What Should a Business Do When Drafting a Refund Policy?
A business should consider the following:
1. Clearly state the circumstances in which refunds are available.
Customers should know what happens where goods are defective, unsuitable, incorrectly supplied or materially different from their description.
2. State the procedure for making a refund request.
The policy can reasonably require customers to notify the business within a specified period and provide relevant information concerning the transaction.
3. Distinguish between cancellation and defective goods.
A customer’s decision to cancel a transaction may raise different legal questions from a situation in which the business supplied defective or misrepresented goods.
4. Avoid absolute language that purports to remove statutory rights.
Statements such as “no refund under any circumstances” are particularly problematic where the law expressly provides a consumer with a right to cancel or obtain a refund.
5. Make the terms available before payment.
A customer should not be confronted with a significant contractual condition only after payment has been made.
What Should Consumers Do When a Business Refuses a Refund?
A consumer who believes that a refund is legally due should first identify the basis of the claim.
The consumer should preserve:
- receipts;
- invoices;
- payment evidence;
- screenshots of advertisements;
- product descriptions;
- photographs or videos of defective goods;
- WhatsApp or other correspondence with the vendor;
- booking confirmations; and
- the business’s refund or cancellation policy.
The consumer should then make a clear written request for the appropriate remedy and identify the relevant facts.
Where the matter cannot be resolved directly with the business, a consumer may consider pursuing the available complaint and dispute-resolution mechanisms under Nigerian consumer protection law, including approaching the Federal Competition and Consumer Protection Commission (FCCPC) where appropriate. The FCCPC has statutory responsibility for consumer protection and actively receives consumer complaints.
Conclusion
The phrase “No Refund” is not a magic legal formula.
A business may establish reasonable commercial terms governing cancellations, returns and refunds. But those terms operate within the framework of Nigerian law.
Under the FCCPA, consumers have statutory rights relating to cancellation of advance bookings and orders, return of certain goods, defective or unsuitable goods, quality of services and protection against contractual terms that unlawfully deprive them of statutory rights.
The Nigerian courts have also demonstrated that businesses cannot necessarily rely on blanket “no refund” policies to defeat those rights.
For businesses, the lesson is simple: have a refund policy, but make it a lawful refund policy.
For consumers, the lesson is equally important: seeing “NO REFUND” on a receipt does not, by itself, determine whether you have a legal right to a refund.
The circumstances of the transaction and the applicable law ultimately matter.
Disclaimer
This article is provided for general information and educational purposes only. It does not constitute legal advice and should not be relied upon as a substitute for advice from a qualified legal practitioner on the facts of a particular case. Laws and judicial decisions may change, and the application of the law depends on the specific circumstances of each transaction.
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