The new case deals with “non-refundable” deposits in South Africa

The Consumer Goods and Services Ombudsman (CGSO) recently addressed the issue of “non-refundable” deposits and whether such a concept also exists in South Africa.

The case centered on a couple who had to repeatedly put their marriage plans on hold due to the impact of the Coivd-19 pandemic.

After three unsuccessful attempts to have the wedding of their dreams, only to have their plans scrapped by Covid-19, the couple decided to cancel their marriage altogether. After booking and paying a deposit on the office in December 2019, the happy day was initially scheduled for May 30, 2020, then for March 2021 and finally set for November 26, 2021.

In January 2021, when uncertainty dogged the vaccine launch in South Africa, the couple informed the supplier that they would rather cancel rather than risk another postponement.

Believing that 11 months’ notice was reasonable and fair, the couple requested reimbursement of R30,674 they had paid to the supplier. The supplier refused and the couple subsequently asked the CGSO for help in obtaining a reasonable refund.

“We engaged with the supplier, who shared their calculations, explaining that they would only consider a refund if the couple rebooked the venue,” the ombudsman said.

“We have addressed the supplier Section 17 of the Consumer Protection Act (CPA)stating that consumers have the right to cancel an advance booking subject to the payment of a reasonable penalty and that the circumstances must be considered, including whether the notice period is sufficient for the service provider, acting diligently, to find a booking replacement. “

As a result, the CGSO advised the provider that its cancellation policies were contrary to the CPA and recommended an amount of R22,580.04 as a fair refund. However, the supplier refused to pay the amount because it included a non-refundable deposit of R5,000.

Section 51 of the CPA

The CGSO subsequently referred the supplier to section 51 of the Consumer Protection Act which states that the contracts entered into may not contain terms and conditions contrary to the provision of the CPA as the law will prevail.

“Put simply, you can’t bargain outside the statute. Even if the customer signs the agreement, the law prohibits bargaining or waiving certain consumer protections under that legislation.

Most ultimately agreed with our recommendation and paid in full the recommended amount of R22,580.04, “the ombudsman said.

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