Customer demanding refund bespoke item

[amandaj58]

Hi,

We recently took an order from a customer for a bespoke front door. Normally, we take a 40% deposit and then the remaining balance a couple of weeks prior to dispatch. However, the customer insisted on paying in full upfront. They have now changed their minds and want a refund.

Although we haven't started or purchased any materials yet, we have done a survey and the money has already been integrated into the general cash flow of the business. We can't afford to refund the entire amount at once.

Can anyone advise what we should/can legally do? It's not that we don't want to refund the money and resolve this issue, but we simply can't afford to do it all at once.

Thank you.

 

[Onthebrightside]

Is there a contract? What's the time span between them ordering the door and requesting the refund?

 

[Lisa Thomas]

What do your terms say in relation to refunds? Did you keep their money in a separate bank account, held on trust for the customer?

 

[Gecko001]

The legal eagles here may need to confirm this, but to try to keep some of the money as damages for time you spent doing the survey is about all you could keep as you had not ordered the materials. They might challenge you in the courts though, even if you just did that, so I would go for the simple option of giving them a full refund, learn from it and move on. Remember you have had the use of this customer's money, for a while and that is something.

 

[tony84]

Not being able to afford to refund them is not a reason to not refund them... It is I suppose, but not a good one.

I reckon you could offer a full refund minus costs (maybe £50-60?) to cover the time for the survyeor. But that would be about it, maybe also offer to knock that off any future purchase as the survey is done?

But beyond that, you have no legitimate reason to refuse a refund.

In fairness, at that point they could take you to court but the costs would probably put them off. Or they could offer you a bad review, which is potentially going to cost you more than £50-60.

Failing that, if you are happy to offer a full refund but cant, maybe just be upfront with them. Refund what you can and just explain times are a bit slow at the moment so you will reund the difference over a couple of months. I suppose it depends on how much we are talking about.

 

[Newchodge]

Hi,

We recently took an order from a customer for a bespoke front door. Normally, we take a 40% deposit and then the remaining balance a couple of weeks prior to dispatch. However, the customer insisted on paying in full upfront. They have now changed their minds and want a refund.

Although we haven't started or purchased any materials yet, we have done a survey and the money has already been integrated into the general cash flow of the business. We can't afford to refund the entire amount at once.

Can anyone advise what we should/can legally do? It's not that we don't want to refund the money and resolve this issue, but we simply can't afford to do it all at once.

Thank you.

Has the money been in your account long enough for it not to be recoverable? It seems a touch suspicious that they should insist on paying in full and then want a refund.

 

[JL-KBB]

Hi,

We recently took an order from a customer for a bespoke front door. Normally, we take a 40% deposit and then the remaining balance a couple of weeks prior to dispatch. However, the customer insisted on paying in full upfront. They have now changed their minds and want a refund.

Although we haven't started or purchased any materials yet, we have done a survey and the money has already been integrated into the general cash flow of the business. We can't afford to refund the entire amount at once.

Can anyone advise what we should/can legally do? It's not that we don't want to refund the money and resolve this issue, but we simply can't afford to do it all at once.

Thank you.

Hi There,

I run a bespoke company and we have had this exact situation, only that it was a substantial deposit not paid in full.

If they are outside of the 14day cool off period and they have paid a deposit or payment in full, they are legally obligated to proceed with the order.
I have sought legal advice on this very matter and discussed at length with Trading Standards, my sister who's a solicitor and a friend who's a barrister.

Irrelevant that you've had 'their money to use' as someone else said. And what? You run a business, you're entitled to use that money whatever way you wish, so long as you hold up your end of the bargain and complete the order. Honestly, I'm baffled sometimes.

If you wish to enforce your right to provide the service you were contracted to do, you must notify the people via email and or letter of your intention to do so and give them a date of install. If they decline, offer another date or ask them for a date that is suitable. If they decline altogether you can take them to court for breach of contract.

The other thing that comes into play is the 'moral standpoint', which others here seem to be more leaning towards. This is if you are in a position to help the customer out and wish to do so, then whatever you come up with, in terms of a discount or refund of any amount, will be considered a gesture of good will.

If they leave you a bad review as other have said, what are they going to say? We ordered a bespoke item and then they wouldn't let us cancel?
You are also entitled to reply to reviews, so don't be bullied or back into a corner with the threat of that.

So to summarise; legally, balls in your court. Morally; whatever you feel is fair and just.

Hope this helps.

 

[pentel]

It looks like the OP is in a position where they are robbing Peter to pay Paul and will be dependent on the next deposit to pay for materials for the person who wants to cancel.

I think we all know where this is going to end.......

 

[Lisa Thomas]

Has the money been in your account long enough for it not to be recoverable? It seems a touch suspicious that they should insist on paying in full and then want a refund.

Good point, Cyndy. Could potentially be money laundering issues here!

 

[Newchodge]

Good point, Cyndy. Could potentially be money laundering issues here!

Or even a straightforward scam!

 

[MyAccountantOnline]

Hi,

We recently took an order from a customer for a bespoke front door. Normally, we take a 40% deposit and then the remaining balance a couple of weeks prior to dispatch. However, the customer insisted on paying in full upfront. They have now changed their minds and want a refund.

Although we haven't started or purchased any materials yet, we have done a survey and the money has already been integrated into the general cash flow of the business. We can't afford to refund the entire amount at once.

Can anyone advise what we should/can legally do? It's not that we don't want to refund the money and resolve this issue, but we simply can't afford to do it all at once.

Thank you.

I'd discuss it with your customer - explain your position and that you have incurred costs on this and try and agree a fair refund.

It is worrying when you say you cant afford to refund the entire amount.

 

[BusterBloodvessel]

I assume you have some of what they paid left for the materials you have yet to buy? What % of the total order is that, as you could offer that as a starting point as a partial refund. Your moral argument could be based around the survey (how long does that take) as well as when were you due to start making it? If they cancelled the day before production started then you could argue it's impossible for you to fill that production slot. Bit different if it's 3 months before!

i appreciate the above is separate to the legal standpoint kindly outlined by JL above.

Moving forward I would suggest seriously looking at your terms & conditions of ordering if you don't have any to cover this kind of instance! Separately to that though I would echo some of the above comments, it's slightly worrying that cancelling one order for a door is causing such an issue when you haven't spent a penny on the job yet. "Integrated into the cashflow of the business" what does that even mean?

 

[DontAsk]

I'm confused. You can afford to operate with only a deposit but when paid in full you suddenly do not have the funds. Where did the payment go? It sounds like the business is living hand-to-mouth.

 

[amandaj58]

Hi There,

I run a bespoke company and we have had this exact situation, only that it was a substantial deposit not paid in full.

If they are outside of the 14day cool off period and they have paid a deposit or payment in full, they are legally obligated to proceed with the order.
I have sought legal advice on this very matter and discussed at length with Trading Standards, my sister who's a solicitor and a friend who's a barrister.

Irrelevant that you've had 'their money to use' as someone else said. And what? You run a business, you're entitled to use that money whatever way you wish, so long as you hold up your end of the bargain and complete the order. Honestly, I'm baffled sometimes.

If you wish to enforce your right to provide the service you were contracted to do, you must notify the people via email and or letter of your intention to do so and give them a date of install. If they decline, offer another date or ask them for a date that is suitable. If they decline altogether you can take them to court for breach of contract.

The other thing that comes into play is the 'moral standpoint', which others here seem to be more leaning towards. This is if you are in a position to help the customer out and wish to do so, then whatever you come up with, in terms of a discount or refund of any amount, will be considered a gesture of good will.

If they leave you a bad review as other have said, what are they going to say? We ordered a bespoke item and then they wouldn't let us cancel?
You are also entitled to reply to reviews, so don't be bullied or back into a corner with the threat of that.

So to summarise; legally, balls in your court. Morally; whatever you feel is fair and just.

Hope this helps.

Thanks so much for your reply it really helps.

 

[amandaj58]

It looks like the OP is in a position where they are robbing Peter to pay Paul and will be dependent on the next deposit to pay for materials for the person who wants to cancel.

I think we all know where this is going to end.......

Thanks for your comment but is this not cashflow???

 

[Gecko001]

Thanks for your comment but is this not cashflow???

I thought it was cashflow as well, as you said you could not afford to pay the full amount back.

 

[Paul Kelly ICHYB]

If you have not incurred costs, just refund and move on.

Yes, you could hide behind the bespoke order regs, but why have the stress.

 

[pentel]

Businesses have ups and downs in order levels. Leaving enough cash within your business to cover those ups and downs is having adequate cashflow. Being dependant on the next job to pay for the materials and labour for the current job is undercapitalisation.

 

[amandaj58]

Thanks everyone for all your advice/comments. The customer decided to go ahead with the order in the end and she’s thrilled with her new door.