# Regulatory Compliance Category > Consumer Protection Act Forum >  Help with Consumer Act

## Massimo

Hey i dont know where to post this so please let me know if it is wrong.

We where getting married on the 1st april 2012 at a venue. We paid the deposit of close to R30 000 and for unforeseen circumstances we have had to call the wedding off. The venue has told us that we loose the entire deposit ? Surely we should be able to get something back? If anyone knows what i should do it would be great

Kind Regards
Massimo

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## BusNavig8

What were the terms of the agreement esp the cancellation terms?

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## sterne.law@gmail.com

You can definteley get your money back, probably most.

Even if the contract is worded that deposits are cancelled, such a clause is contra to the CPA and will be struck down.

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## Dave A

By my understanding, the venue can claim "reasonable" cancellation costs, though. Just what is considered "reasonable" and how it is calculated is probably going to be in issue here.

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## IMHO

What is the purpose of a deposit? Surely it is to confirm your attendance, so the place is kept for you. Your deposit guarantee that the venue is not given to someone else. What would you do if you arrive and are told, sorry, we can not give you the venue, due to unforeseen circumstances we had to give it to this very deserving case. 

What did you think the deposit is for? That if you cancel, you will get it back? Or to safeguard the entity against a no show? I think you are very unfair. Because you had a problem, now the people who rented you the venue must lose out? It is not their misfortune, it is yours! They now already lost out by not getting the full amount they would have, if they rented the venue to someone else. They have their own set of misfortunes, do other people have to pay up on their behalf? I think not!

As far as the amount is concerned, you agreed to it, as fair, by paying it. It is a deposit, not a down payment on your wedding!

If the venue was not used that night and stood empty, I have no sympathy. If it was rented out after all, you may have a case in getting something back, in which case the people owing the venue would probably have offered you a fair outcome, covering their real expenses and profit loss.

I think this is just a stunt to try and use the consumer act, to get out of your responsibilities.  I can only hope that the consumer act will not allow the abuse of the act like that!

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## sterne.law@gmail.com

IMHO you have some valid points and quite possibly you respond from a supplier perspective.

I have had substantial involvement in leisure industries and events and cancellations are often a problem and do cost money.

However, to return to Dave's point, a reasonable amount can be withheld.
It is the balance that needs to be struck. It is not fair for the supplier to gain a benefit for doing nothing, but neither should they lose unnecessary funds.
Turning to reasonable deductions with particular reference to the above situation:

If the company has already spent money on stuff that can't be recovered and was very specific to the booking would be a reasonable claim.

The nature of the goods: A wedding dress made would be very specific and thus difficult to sell.
The time span or length of notice: This offers the company an opportunity to book it out, hence this is not such a reasonable claim. 
Reasonable potential to find an alternative consumer:If the company turned down a booking and then also fails to make another that would strengthen their claim. If however they have not turned a booking down and then fail to make another booking, then they would have a minimal claim if any.

Where the cancellation is due to illness or death then no cancellation fee may be charged.

A further issue on deposits: All deposits must be kept in a separate account or in a manner that shows that the money was not used. That is, a deposit may not be used for any purpose other than the persons transaction

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## IMHO

> possibly you respond from a supplier perspective.


Yes I am. And I am fed up with people who try to shove there misfortune onto me. You are right, it is not fair to try and make double profit out of a cancellation and I never do it. I also take into consideration whether I showed bookings away. But this is very difficult to prove. You do not take details of customers that you could not help. A customer will phone and ask for availability on a specific date. You answer negative and he hangs up. You have no way to prove this. Therefore I expect to be believed. I have many examples to prove that I do refunds if I did not turn someone away, but that discretion is up to me. 

I once had the same situation with my fathers death. I was able to change flight arrangements to a later date, (pure luck, as my seat could be filled) but accommodation was my lost. Death certificate did not help anything.

As far as the deposit account goes, good point. Never thought it necessary to have a separate account. Is it really necessary though?




> Where the cancellation is due to illness or death then no cancellation fee may be charged.


This one really upset me. That is not my misfortune. Why must I lose money because of it? I will deal with it no different from other cases. The point is to be fair. Charge what you spend and can not recover. Take re-rent possibility into consideration. Be fair, work both ways.


But you did not answer the question. What is the purpose of a deposit? Is it not the clients prerogative to go elsewhere if he is not prepared to lose the deposit, due to it being too high or unfair, in case of cancellation? In my view, the client is fully aware of this beforehand, but fight it just to try afterwards to minimize his losses. An attitude of lets try, if it works, it works, if it does not, then at least I tried. 

What makes me further upset is that the consumer act seems to be unfair and does not take all sides into consideration. At least, that is what it is made out to be in the media. For goodness sake, how can you buy an item, use it and then after some time decide it is not what you want, or you can not afford it anymore and then return it for a full refund, with some lame excuse? I have seen this many times at a big retail store where I worked for 20 years. Xmas presents is the big thing. Toys is highest on the list. Dad needs a fix from his babelas, then Johnny's present that he broke or does not like so much is returned the day after Goodwill day and Johnny is promised something else at a later date. 

Another example I have to do with lately is hunting bows. So this mean a customer can buy a R14 000 bow on Thursday, go for the weekend hunt and return it for a full refund on Monday! The thing is used, for goodness sake! You know by how much you have to mark it down to be able to make someone interested in it again? And if you pretend it to be new, someone is going to know and spill the beans. Gone is your reputation! Great for the customer, but what is going to happen to business?

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## BusNavig8

Guys, these are what you would call business risks - how can you expect to be in business without the risk of being in business, So IOW you want the reward but dont want to take on the risk. We write off literally thousands in lost fees a year because people take the work that we do and code it on efiling themselves and SARS has made it easy for them by a click of a button they can transfer the profile from us to them and there is naught we can do about it.

The CPA is to protect the consumer against unscrupulous operators of which there are many and the retail trade are the worst. They dont give the consumer the correct advice, put them in the picture regarding warranties and guaranties so that they can make an informed decision. 

Life happens, and I promise you that if you had a good business and a good name you will be able to recover your costs, re hire the venue and be able to only deduct the reasonable wasted costs. If it were me, I would create so much goodwill out of the exercise and ensure that I received at least a referral so that I could occupy the venue for that time. If you played your cards right, you would be able to get that referral and much more.

Businesses need to learn how to leaverage their situations and not take advantage of consumers by being unjustifyibly enriched which is what has been happening in the past.

Just for interest sake the CPA does not take on cases where there is no case so there is fairness involved. If you get a reference number for a complaint, then you know you have a valid complaint.

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## BusNavig8

Warren Buffet has two rules - rule 1  - dont lose money and Rule 2 - Dont forget Rule 1.

Protect yourself within the Act, and reduce your Business Risk. This will take some strategy on your part but will be worth it in the end and you would need to know the CPA and how you can use it to your benefit and believe me you can. Dont moan about something if your not going to do anything about it. Do something!

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## IMHO

> Guys, these are what you would call business risks - how can you expect to be in business without the risk of being in business, So IOW you want the reward but dont want to take on the risk. We write off literally thousands in lost fees a year because people take the work that we do and code it on efiling themselves and SARS has made it easy for them by a click of a button they can transfer the profile from us to them and there is naught we can do about it.


Well, it is not nearly the same thing we talk about here, is it? The hospitality industry have its own set of risks, many times even life threatening, competition is fierce, market is shrinking and more and more operators entering, Govt taxes and levies invented by the day, admin getting more and more, costs skyrocketing, labour issues getting worse and worse, but it has nothing to do with committing to a deposit and then try and wiggle out of it.




> because people take the work that we do and code it on efiling themselves


And why not? It is a rip off to pay R250 to enter a CC on line and pay the annual R100 fee, totaling R350. I get charged R1050 for 3 CC's, which the anual levy is only R300 and the work is 15 min on line on a slow connection.

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## wynn

> I also take into consideration whether I showed bookings away. But this is very difficult to prove. You do not take details of customers that you could not help. A customer will phone and ask for availability on a specific date. You answer negative and he hangs up.


Get his details before you tell him you can't help him, tell him nicely you already have a booking for that time but if there is a cancellation you will get back to him, maybe he will still be looking? :No:  :Yes:

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## IMHO

hehe, I can only smile.  :Smile: 

Die beste stuurman staan aan wal / it is easy to criticise when you're not doing something yourself / teaching grandmother to suck eggs

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## Dave A

I get where IMHO is coming from - and people trying to pass on their own problems to people who have absolutely no responsibility for causing them is a tad irritating to me too.

Wynn does make an interesting suggestion, though.

One of the things we've done quite well as an organisation is when the same problem keeps coming up, we look really hard at ways to eliminate it - or at the very least reduce its impact. And quite often that's done by setting up things way in advance of the problem's crux point.

My best example is our client info sheet on electrical COCs. The biggest problems that gave rise to that was:
a horribly steady stream of vociferous criticism for faults that have nothing to do with the electrical COC (particularly fixed appliances not working)failure to have access available to *all* rooms (meaning making second, third and sometimes 4th appointments - expected at no extra charge)no notification of vicious dogs being on the premisesappointments to do tests when the client knew the elecrticity had been disconnected

Not only did the info sheet drastically reduce the number of times we had those problems, it has been a powerful marketing tool. And of course nowhere on the sheet does it say - we were inspired to create this because we are sick and tired of being stuffed around.

In similar vein, Wynn's suggestion might just prove useful in ways that might not be directly obvious. Just how much would it hurt to say "I'm speaking too? Your contact number is? I regret the venue is not available on that day.." and continue with offering alternative dates and a phonecall if the existing reservation cancels.

You get some goodwill.
You could add them to your marketing list.
And if you try it for a while, there might be other benefits that were entirely unexpected.

If nothing comes of it - what harm was done?

IMHO - I understand your "setting things up in advance" is the forfeitable deposit, but perhaps there are other options too.

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## sterne.law@gmail.com

Returning (no pun intended) to the issue of the customer who returns the hunting bow.

It seems a misunderstood concept, particularly from the consumer side, that the CPA allows them to just return anything. There is also no doubt that this is misused and also used as a threat. However, only where direct marketing was involved, can a consumer merely return an item without fault or reason. All other returns need to be fault based.

Dave also raises the issue of goodwill, which a venue/supplier should factor in. The intention is not for the Consumer to get away scott free, but neither should a supplier merely "hit a luck", the striking of a balance is the aim (not always easy and not always possible) the CPA is a mechanism to try and level the playing field, albeit tilted towards the consumer.

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## BusNavig8

> Well, it is not nearly the same thing we talk about here, is it? The hospitality industry have its own set of risks, many times even life threatening, competition is fierce, market is shrinking and more and more operators entering, Govt taxes and levies invented by the day, admin getting more and more, costs skyrocketing, labour issues getting worse and worse, but it has nothing to do with committing to a deposit and then try and wiggle out of it.
> 
> 
> And why not? It is a rip off to pay R250 to enter a CC on line and pay the annual R100 fee, totaling R350. I get charged R1050 for 3 CC's, which the anual levy is only R300 and the work is 15 min on line on a slow connection.



Well actually, our market is shrinking too with the advent on efiling and SARS telling everyone how easy it is to do efiling. SARS marketing budget is much higher than our would ever be with radio and TV coverage, not to mention Kiosks at Malls. The LAW changes every single year. More Tax Consultants enter into the market all the time. Lawyers are now creating tax departments. Audit firms are increasing their tax departments. So please dont tell me its not the same thing, its exactly the same thing. Its the risk of being in business. How many businesses have gone out of business because of this very same thing - no market? Change is a way of life for an entreprenreneur, that what sets you apart from all the rest. your ability to bounce back and change your strategy in the face of these threats.

As for CIPC transactions I do not charge R250 to enter a cc online I charge R50 for the CONVENIENCE of having the work done and you not having to worry about it being done incorrectly, out of time. It is to cover our admin costs and our bandwidth. We do not charge where there is no skill involved. We charge for things where we have developed IP and where we have used our knowledge and skill. Where we have prepared a tax return, spent 4 hours collating a logbook in the SARS format, calculated the rental, capital gains and foreign withholding tax and when sent for approval the taxpayer merely copies the end result into the efiling system at SARS. That too is unfair and it is not even governed by an act. I get upset but realise that I must just change the way I do things, to make the best I can out of the situation. Complaining about the situation and not doing anything will keep giving me the same result. So now I first get a mandate, a proper mandate. Regarding the deposits, I really feel that only wasted costs can be withheld otherwise it is unjustified enrichment. You obviously will not fill it with the same person who phoned previously (well chances are slim) but people will be making enquires all the time or should be. My husband does wedding photography and we get urgent requests all the time.

Another point, regarding the CIPC issue is that it does not only take 15 mins of your time. It takes 15 mins physically doing the returns, it takes another ? time registering as a customer, it takes another ? mins transferring the funds into your virtual account. This is not your core function, however it is ours. How much time have you now lost when you could have been marketing your business which is your core function? Just asking?

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## BusNavig8

I really dont get it...must be a blonde thing :Confused: 


How come this does not fall into the category of a business risk? I mean one cant expect every single deal to be profitable or to go through. There will be cancellations and lost business, either due to unforseen circumstances, twists of fate and just general bad timing including a host of other reasons. How can one expect everything to be profitable? You have to build in a margin in your pricing for the deals that go south surely? 

How can you take someone's full deposit, and then still hire out a venue? No, you can only have the wasted costs and refund the balance. Its too easy then for me as a venue to keep cancellations funds, and say, sorry couldnt find a replacement booking and not even try- no costs - no extra staff - no linen - no cleaning - no nothing - almost 100% profit not bad. That's the problem and what the CPA is trying to address.

Law changes, markets shrink, Life happens!

The CPA didnt go and kill anyones' business, just the one's that didnt comply and were enriching themselves at the expense of unsuspecting consumers, of Im sure we were one at some stage in our lives.

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## IMHO

> So now I first get a mandate, a proper mandate.


haha, I rest my case! I first get a deposit, a proper deposit! :Boxing:

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## Dave A

Before we get too carried away about unfair enrichment, may I point out that there is nothing to indicate that the OP has a 100% deposit at risk here.

@IMHO  :Rofl: 
Touché!

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## BusNavig8

The proper Mandate is about changing a stategy when the current one is not working. I dont need to justify myself nor my trading ways. The point remains the same the CPA is the CPA, its enacted. You WILL HAVE TO ABIDE BY IT LIKE IT OR NOT. It was open for comment. It is a statute. It has precedent. Thats that. Every business is faced with the same issues. The wise thing for me to do is to leave the thread, which I intend to do, it was a ball I should not have hit and an error of judgement on my side for it has just turned into a slinging match.

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## Dave A

> The wise thing for me to do is to leave the thread, which I intend to do, it was a ball I should not have hit and an error of judgement on my side for it has just turned into a slinging match.


Please don't get grumpy when everyone doesn't _seem_ to agree to your view.  :Flowers: 

You said what needed to be said. Your points are relevant. And the posters aren't the only readers.

We spread the seeds. Sometimes they land on fertile ground and sometimes fallow...

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