Bill seeks refunds, repairs for defective goods


Watu Credit has secured key certification in recognition of client protection efforts. PHOTO | SHUTTERSTOCK

Kenyan consumers will have the right to reject goods and obtain refunds, or compel manufacturers to repair or replace faulty and poor-quality products if Parliament approves changes to the law aimed at protecting buyers from substandard products.

The Consumer Protection (Amendment) Bill, 2023 seeks to add a new section to the Consumer Protection Act, 2012 that grants consumers the right to reject goods as well as get refunds.

The proposed law seeks to empower consumers to return goods within a week of delivery if they are defective, unsafe, not of merchantable quality, or were not examined by the suppliers before delivery.

The Bill further seeks to shift the burden of proof to a supplier of goods.

The current law states that a supplier is deemed to warrant that the goods or services provided under a consumer agreement are of reasonable merchantable quality.

“The proposed amendment seeks to insert the words: ‘therefore the burden of proof is on the supplier’ after the word 'quality',” the Bill reads.

The Parliamentary Budget Office (PBO), which advises MPs on fiscal matters, estimates that the enactment of the Bill will result in a tax loss of approximately Sh211.1 million in the first year of implementation.

“Businesses are required to charge and collect value-added tax (VAT) on their sales. When goods are returned, the business may be required to issue a refund to the consumer for the amount of tax that was paid on the original sale,” the PBO brief to MPs states.

“Based on the underlying assumption, the tax loss implication of the proposed legislation is approximately Sh211.1 million in year one, Sh229.2 million in year two and Sh242.3 million in year three.”

The Bill sponsored by Vihiga Woman Representative Beatrice Adagala comes at a time when there is a rise in complaints about e-commerce firms supplying defective products sold by third-party merchants on their sites.

E-commerce firm Jumia was last month held liable for the safety and quality of products sold on its platform by third-party merchants after the competition watchdog in the Common Market for Eastern and Southern Africa (Comesa) forced it to overhaul its terms and conditions.

The Comesa Competition Commission, which has been investigating the conduct of Jumia Group since September 2021, has now forced the company to make the changes in a move aimed at protecting consumers.

The watchdog found that Jumia had excluded itself from being party to the contract for sale or purchase between customers and its agents, effectively shielding the e-commerce platform from any liability arising from the transactions.

Product liability cases have dogged e-commerce firms, including Amazon, in recent years as they turned their stores into an online bazaar fuelled by millions of third-party vendors.

The e-commerce firms have always held that they are not legally responsible for defective products sold by third-party merchants on their sites.

The Comesa settlement could force Jumia to recall defective and unsafe products sold by third-party agents.

Jumia offers e-commerce services through a marketplace and first-party sales, food delivery, logistics services as well as payment services through its fintech JumiaPay.

“We have had several cases and I have been a victim of ordering goods through e-commerce that ended up being defective,” Ms Adagala told the Budget and Appropriations Committee (BAC) chaired by Kiharu MP Ndindi Nyoro during the pre-publication scrutiny of the Bill.

“Unfortunately, consumers who order goods through the internet marketplace are forced to pay before delivery of the items. It's impossible for them to get refunds.”

Ms Adagala said there are too many defective products being sold through the internet and social media.

"You find that most suppliers ask for upfront payment but when you receive them, they are damaged or are substandard and it is difficult to get your money back. We need to protect such consumers and they must be able to get refunds,” she said.

The Competition Authority of Kenya (CAK) is mandated to handle cases of complaints by consumers.

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