Bill holds sellers culpable in case of defective goods

Consumers will now have legal rights to seek a refund should they purchase goods that are defective or poorly packaged once the Consumer Protection (Amendment) Bill 2023 sponsored by Vihiga Woman Representative Beatrice Adagala is passed by the house.

The bill, which has already been approved by the Budget and Appropriations Committee (BAC) and is now scheduled for introduction in the house once it is published, seeks to grant consumers the right to reject goods and obtain refunds, repair or replacement if the goods are deemed defective, unsafe, not of merchantable quality or were not examined by the supplier before delivery.

The proposed law states that even though the consumers will have the right to seek a refund on the affected goods that are not in their original packaging or have been used, those who choose to repair or replace the goods have been given up to fourteen days to do so. 

“The supplier will be required to repair or replace the goods within a reasonable time and without causing significant inconvenience to the consumer,” reads the proposed law.

Adagala who had appeared before BAC to defend the bill, said that the gains in the bill outweigh the losses that her bill will occasion.

 She cited Nigeria, India, New Zealand and the US as the best-case scenarios for consumer protection against substandard, faulty and poorly packaged goods among others.

“There are businesspeople who often supply substandard goods and what I am saying is that consumers need to be protected. Customer satisfaction should be the hallmark of any business transaction,” says Adagala.

Adagala added that consumers for a long time have been hoodwinked especially those who engage in online transactions.

She said, “They demand that you pay first before the goods are supplied. But when they are delivered, you find that they don’t meet the requirements of the law. Some consumers also get harassed by these suppliers along the way. This must stop.”

According to Fiscal experts at the Parliamentary Budget Office (PBO), it is estimated that once the bill becomes law, the government will lose in the region about Sh211.1 million in taxable sales in the first year of its implementation, Sh229.2 million in the second year and Sh243.3 million in year three on rejected and returned goods because businesses may be able to claim a tax deduction or credit for the cost of goods that are returned hence reducing the amount of taxable income and therefore reduced tax bill.

 Article 46 of the constitution provides for consumer protection and prohibition against unfair or dishonest advertising.

Revenue losses

“The committee may propose any changes to the Bill that may deem suitable to minimise revenue losses but addresses the need to protect the consumer right. Businesses are required to charge and collect VAT on their sales, which is the largest amount of taxes collected by the government from sale of goods,” the fiscal experts said.

Teso South MP Mary Emaase, who is the committee’s Vice Chairperson said that the biggest threats to consumer freedom is online fraud. “I have lost money before. I bought an item that was never delivered,” said Emaase.

Currently, there are various government agencies with the responsibility of consumer protection including the Competition Authority of Kenya with the power to initiate investigations into consumer violations and impose administrative remedies, Energy Petroleum Regulatory Authority, Pharmacy and Poisons Board and the Kenya Bureau of Standards.