Restocking fees and return shipping fees: when stores can charge them, and when you can push back

What's the rule?

Two charges catch people out at returns time: a restocking fee, usually a percentage taken off your refund, and a fee for shipping the item back.

There's no federal law that bans either one. A store can set its own return policy, including no returns at all, as long as it's honest about it. What protects you is a mix of state disclosure laws, the store's own written policy, and your rights when you pay by credit card.

At a glance

• Restocking fees are legal in most cases, but some states require stores to disclose them before you buy.
• New York says a posted refund policy must list any fees, "including a restocking fee," and the dollar or percentage amount.
• California says a store that doesn't clearly post a limited or no-return policy must give a full refund within 30 days with proof of purchase.
• Credit card rules let you dispute a charge for goods you returned or that weren't delivered as agreed.

What state laws say

New York. General Business Law section 218-a says retailers must post their refund policy conspicuously: on the item, at the register, or at the store entrance. Online sellers must show or link it near the item or before checkout. The policy must say whether refunds come as cash or credit, and list any fees, including a restocking fee, with the amount. If a store doesn't follow the rule, it must take returns for up to 30 days from purchase, for a cash refund or credit, as long as the item is unused and you can show when you bought it.

California. The state Attorney General's office explains that under Civil Code section 1723, a store that won't give a full refund, credit or exchange within seven days must clearly display its policy. If it doesn't, you can return the item with proof of purchase for a full refund within 30 days. Food, plants, custom orders, final-sale items and used or damaged goods are excluded.

Florida. Statute 501.142 says a shop that offers no refunds or exchanges must show a "no refund" sign at the point of sale. Without one, it's treated as having a refund policy, and it must refund unused goods returned within 7 days with proof of purchase.

Faulty or wrong items are different

A restocking fee is meant for change-of-mind returns. If the item arrived broken, isn't what you ordered, or never turned up, you're not simply returning it. You're asking the seller to fix its mistake, and you can dispute the charge with your card issuer if the seller won't.

Under the Fair Credit Billing Act, a billing error includes a charge for goods you didn't accept or that weren't delivered as agreed. You must write to the card issuer within 60 days of the statement that first showed the charge. For quality problems, a separate rule lets you withhold payment for a disputed purchase of more than $50 made in your home state or within 100 miles of your mailing address, after you've tried in good faith to sort it out with the seller.

A worked example

This is an illustration, not a real case.

Maria buys a $600 camera online. The store's policy, shown on the product page before checkout, says opened cameras carry a 15% restocking fee and buyers pay return shipping. She opens it, changes her mind, and sends it back. The store keeps $90 and refunds $510. With the $14 she paid to ship it, she's $104 down, and that's lawful, because both charges were disclosed.

Now say the camera arrived with a cracked screen. The store still tries to keep $90. That's no longer a change-of-mind return. Maria photographs the damage, asks the store for a full refund in writing, and when it refuses, writes to her card issuer within 60 days to dispute the $90 and the shipping cost.

What to do now

1. Read the return policy before you buy, especially for electronics, appliances, furniture and anything oversized.
2. Screenshot the policy and the product page on the day you order. Policies change.
3. Photograph faults on arrival and tell the seller in writing straight away.
4. Dispute in writing within 60 days if a seller charges a fee its policy didn't allow, or refuses a refund for faulty goods.
5. Report misleading policies to your state attorney general and at ReportFraud.ftc.gov.

Questions

Is a restocking fee legal if it wasn't mentioned?

It depends on your state, but a fee you weren't told about is hard for a store to defend. In New York the policy must list it. Ask for it back in writing, then dispute the charge with your card issuer if needed.

Do I have to pay return shipping?

Only if the policy says so. Many stores charge it for change-of-mind returns but not for wrong or faulty items. Check the policy before you print a label.

Ways to save

Buying gadgets as gifts? Check each brand's return terms as well as the price. Promo Magpie lists current offers from EarFun for earbuds and speakers, and TP-Link Tapo for smart home cameras and plugs.

Sources: New York General Business Law section 218-a, California Attorney General: Refund policies, Florida Statutes section 501.142, 15 U.S.C. 1666: correction of billing errors, 15 U.S.C. 1666i: claims and defenses, CFPB: How do I dispute a charge on my credit card bill?