LA CONSOLACION UNIVERSITY PHILIPPINES

GRADUATE SCHOOL DEPARTMENT

Ms. MARIA CRISTINA G. MORFI Dr. MARTIN ARMANDO CRUZ

DBA 516 PROFESSOR

1. Is the No Return /No Exchange and or No Refund policy legal in the

Consumer Protection Act of the Philippines? Kindly elaborate on your
answer.

A No Return, No Trade Strategy is explicitly disallowed under the law. Under

Republic Act No. 7394, also called the "Purchaser Demonstration of the
Philippines," just as it’s Carrying out Rules and Guidelines, it is mandated explicitly
that the words "No Return, No Trade" or words to such impact will not be composed
into the agreement of offer, receipt in a business exchange, in any record proving
such deal, or anyplace in a store or business foundation.

Note that a "No Return, No Exchange" Policy is prohibited because this is

considered deceptive. Under the Consumer Act, in conjunction with the New Civil
Code of the Philippines, sellers are obliged to honor their warranties and grant
corresponding remedies to consumers. As such, consumers should be allowed to
return or exchange the goods or avail themselves of other treatments if secret
blames or run away or any charge the purchaser didn't know about at the hour of
procurement.

By guarantees, we mean the affirmations or portrayals of a merchant to a

purchaser about the item or great sold. These guarantees may either be express
or inferred. Express guarantees are those unequivocally spread the word about for
the purchaser, typically contained in a guaranteed card that determines the
certifications to the purchaser in clear and justifiable language. These express
guarantees must, in any event, include the name of the warrantor and the
warrantee, the specific parts or services warranted, the extent of the guarantee
(full or limited), duration, the procedure for claiming against the warranty, and the
remedies of the buyer in cases of malfunctions or defects.
 LA CONSOLACION UNIVERSITY PHILIPPINES
GRADUATE SCHOOL DEPARTMENT

Ms. MARIA CRISTINA G. MORFI Dr. MARTIN ARMANDO CRUZ

DBA 516 PROFESSOR
Inferred guarantees, then again, allude to those which are innate in a deal
exchange. Under our New Polite Code, a merchant will be answerable for
guarantee against covered up abandons which the thing sold may have, should
the imperfection render it unsuitable for its expected use, or if the inadequacy
decreases its qualification for such help so much that, had the purchaser known
thereof, he would have purchased the thing sold at a lower cost, or basically,
retained the buy. The merchant will be obligated for this suggested guarantee
despite that he is uninformed of the covered-up defect(s). Then again, should the
imperfection be so patent or self-evident, the purchaser can't make the dealer
responsible for a similar decency.

All in all, in instances of penetrate of the vender's guarantees, the Shopper Act
qualifies the purchaser for pick any of the accompanying elective cures: (a) fix of
the item, in entire or to some extent; (b) supplanting of the item with a like or
identical item; (c) discount of the price tag of the item less a sensible stipend for
use; or (d) installment of sensible harms.

This "No Return, No Exchange" policy only refers to those goods that had
hidden defects or imperfections at the time of the sale. It cannot be availed the
defect of the goods was due to the mishandling of the buyer, or in cases of "as-is-
where-is" transactions, or sale of second-hand articles. Much less, the buyer
cannot demand a return or refund because he had a change of heart.

2. What are the salient points of RA 7394.

The Philippine government adopted RA 7394 (Consumer Act of
1991) as the legal basis for consumer protection in the country. The law embodies
the state policy on the protection of consumers and establishes standards of
conduct for business and industry in the country.
 LA CONSOLACION UNIVERSITY PHILIPPINES
GRADUATE SCHOOL DEPARTMENT

Ms. MARIA CRISTINA G. MORFI Dr. MARTIN ARMANDO CRUZ

DBA 516 PROFESSOR
The Act aims to protect the “interest of the consumer, promote his general
welfare and establish standards of conduct for business and industry” by adopting
the following measures:
• protection against hazards to health and safety.
• Protection against deceptive, unfair, and unconscionable acts and
practices.
• Provision of information and education to facilitate sound choice and
the proper exercise of rights by the consumer.
• Provision of adequate rights and means of redress; and
• involvement of consumer representatives in formulating social and
economic policies.

3. What benefits that an individual or groups can get from the Consumer
Protection Act.
The following are the benefits that I identified in the Consumer Protection Act
as I understand it.
• Consumers are protected against the marketing of goods and services which
are hazardous to life and property.
• Consumer sovereignty in the choice of goods is guaranteed.
• Consumers are entitled to a speedy, simple, and inexpensive relief under the
Act.
• The authorities under the Act are made responsible for the protection of specific
rights. They are the right to safety, freedom to choose, right to be heard, and
right to consumer education. It is enabling legislation and is aimed to be
progressive.
• The penalty under the Act helps to check arbitrary trade practices in the
Philippines. Also, it helps in mutual trust in the consumption of goods and
services in a consumption-based economy like India.
 LA CONSOLACION UNIVERSITY PHILIPPINES
GRADUATE SCHOOL DEPARTMENT

Ms. MARIA CRISTINA G. MORFI Dr. MARTIN ARMANDO CRUZ

DBA 516 PROFESSOR
• The Act has proposed provisions for product liability. If the product is under
defect, then the service provider must repay the consumer. A manufacturer or
a service provider must compensate a consumer if the goods/services cause
injury or damage to the consumer. It might be due to a manufacturing defect or
poor service. It allows for compensation to an injured consumer.
4. What are the advantages that we as a consumer enjoy under this Act? Cite
at least two examples based on your own experiences?
Based on my own experience, there are many advantages that the
Consumer Protection Act has provided me in all aspects of my purchase activities.
One instance that I can say I was able to be benefited from this Act is when there
is a wrong shelf tag/price tag in one of the supermarkets here in Batangas. It is just
a small case, but the effect will be more significant if it is ignored. Imagine a .50
cents difference between the shelf tag and the POS. That small amount, if
multiplied, will give the supermarket additional income by deceiving people. They
say it is just a mistake by the merchandizer, but still, the consumer has the right to
know the correct amount before buying anything. I called the attention of the store
manager. I explained to them that what they are doing is deceiving the consumers.
They may be liable to the Department of Trade and Industry to regulate fair and
honest pricing for the benefit of the consumers.
Another instance is when I bought my son’s gadget. It was good on its first
couple of days. And on the 7th day, which is the last day of the return policy, bugs
down. To make the story short, I went to the store to ask for a replacement, but the
store did not replace the unit. It is also clear that it was a factory defect, and they
told me that it was on our end; that is why it bugs down. Since I know my right as
a consumer, I explained to them the possibilities of their action, that I can sue them
considering that it is still on the 7th day of the replacement period and the cause is
a factory defect. I explained that they might be liable for not replacing the unit,
given the circumstances I mentioned. And at the end, the company returned, and
they are thankful for some lecture I provided them. It is also evident that most
 LA CONSOLACION UNIVERSITY PHILIPPINES
GRADUATE SCHOOL DEPARTMENT

Ms. MARIA CRISTINA G. MORFI Dr. MARTIN ARMANDO CRUZ

DBA 516 PROFESSOR
salespersons are not knowledgeable of consumer acts, which I think is necessary
for them to learn. It may also help them in situations as we have.

5. Briefly discuss the eight (8) consumer rights identified under RA 7394.
a. The first right refers to basic needs. This right ensures the availability of
essential goods and services to consumers at affordable prices and good
quality. It includes adequate food, clothing, shelter, health care, education,
public utilities, water, and sanitation to lead a decent life. Based on these
human needs, the United Nations Guidelines on Consumer Protection defines
sustainable consumption as including “meeting the needs of present and future
generations for goods and services in ways that are economically, socially and
environmentally sustainable” (United Nations, 1999). The Universal
Declaration of Human Rights in 1948, Paris (Article 25), as cited by United
Nations Educational Scientific and Cultural Organization (UNESCO), further
signifies that "Everyone has the right to a standard of living adequate for the
health and well-being of himself and his family, including food, clothing,
housing, and medical care and necessary social services..."
b. The second right pertains to safety. This right assures consumers to be
protected against the marketing of goods that are harmful to health and life.
Consumers are assured that manufacturers of consumer products undertake
extensive safety and performance testing before selling their products in the
market. Products should be labeled appropriately with information about the
contents, use, precautions, warning signs, and how to prepare them if the need
arises.
c. The third is the right to information. It means consumers' right to be
protected against dishonest or misleading advertising or labeling and the right
to be given the facts and knowledge needed to make an informed choice.
Consumers have the right to receive adequate information about products on
which to base buying decisions. Information to consumers includes product
 LA CONSOLACION UNIVERSITY PHILIPPINES
GRADUATE SCHOOL DEPARTMENT

Ms. MARIA CRISTINA G. MORFI Dr. MARTIN ARMANDO CRUZ

DBA 516 PROFESSOR
specification, place of origin, safety warnings, price, mode of payment, date of
quality assurance, description of after-sale services, warranty, ingredient,
nutritional facts, etc. Consumers expect complete information about the
product to be purchased, including its use, elements or chemical contents,
limitations, and expiry date. Consumers must be informed about the safety
precautions to be taken while using the product to avoid loss or injury. Limited
information is one of the factors causing the exploitation of consumers.
d. The fourth is the right to choose. It deals with the right to select products and
services at competitive prices, with an assurance of satisfactory quality.
Consumers expect a wide array of goods and services offered in the market
with diverse brands, sizes, shapes, colors, and differences in price, quality, and
use. Consumers have the right to be assured that a selection of quality products
and services is available to purchase at competitive prices. The right to choose
also intends to protect competitors from each other, particularly the small firms
from the large and powerful ones.
e. The fifth right refers to representation. The right to expression is also known
as the right to be heard. It is the right to express consumer interest in the
making and execution of government policies that will impact the supply of
goods and services to consumers. Consumers expect legislators would
propose laws that would ensure that consumers would have the chance to live
a better life by getting the best value for their hard-earned money. Consumers
have the right to equal and fair consideration in government policy-making
situations, as well as prompt treatment in administrative courts or legal
communities. Consumers have the right to complain when there are problems
or concerns. The right to be heard involved an assurance that consumers would
be considered in the formulation of government policy and during regulatory
proceedings. Some business enterprises advocate this consumer right in
formulating their policies.
 LA CONSOLACION UNIVERSITY PHILIPPINES
GRADUATE SCHOOL DEPARTMENT

Ms. MARIA CRISTINA G. MORFI Dr. MARTIN ARMANDO CRUZ

DBA 516 PROFESSOR
f. The sixth is the right to redress. It is the right of consumers to be
compensated for misrepresentation, shoddy goods, or unsatisfactory services.
Under this right, consumers expect defective goods to be replaced or money
refunded by the seller or dealer. Consumers also have the right to seek legal
remedies in the appropriate courts of law. Through this right, the consumers
are assured that their complaints will receive due attention. The right provides
due compensation to consumers if they have suffered a loss or are put in
jeopardy due to the fault of the supplier or manufacturer. Aaker and Day (1978)
pointed out that consumers should be allowed to voice dissatisfaction and settle
satisfactorily. Various innovations, including free legal service for the poor,
consumer class action suits, and arbitration procedures, have substantially
enhanced the right to recourse and redress or fair settlement of just claims.
g. The seventh right pertains to consumer education. It is the right to acquire
the knowledge and skills necessary to be an informed consumer. Consumers
may look forward to the three sectors of society: business, government, and
the consumer would embark on an information campaign through tri-media on
consumer-related issues and series of seminars, conferences, for training and
public hearings for the welfare of the consumer. To prevent market
malpractices and exploitation of consumers, consumer awareness and
education are essentially required. Recognizing the importance of consumer
education, Singh (2002) lays down four essential aspects: (a) Informed Choice-
Consumers must learn to obtain information on goods and services,
discriminate between sources of information, understand the psychology of
selling and advertising; (b) Value Systems- Consumer education must enable
the consumer to understand that individual consumer decision have a broad
social impact and influence on such important things as the overall allocation
of resources within the society; (c) Wise Decision Making- Consumers need
the information to make careful, wise decisions and informed choices; and, (d)
Catalyst for Action Consumers must be aware of the available avenues of
 LA CONSOLACION UNIVERSITY PHILIPPINES
GRADUATE SCHOOL DEPARTMENT

Ms. MARIA CRISTINA G. MORFI Dr. MARTIN ARMANDO CRUZ

DBA 516 PROFESSOR
consumer complaint and redress and learn to use them for their benefit. In
addition, Prajapati et al. (2009) acknowledge the help of consumer education
in making wise choices, especially in developing countries where it becomes
more critical because there is a variety of products and there is little control
over standards.
h. The eighth right concerns a healthy environment. This right assures
consumers to live and work in an environment that is neither threatening nor
dangerous and permits a life of dignity and wellbeing. Consumers expect the
government to exert effort regarding the alarming increase in the degradation
of the environment, especially on the forest, dying wildlife, depleted landfill
space, and environmental contamination, to prevent further damage and the
constant monitoring of our seas, coral reefs, forest and waste disposal being
committed by factories to check if there is a violation of the laws on
environmental protection. Dumalagan (2004) emphasizes that all consumers
are entitled to a healthy environment and should be protected from the
devastating effects of air, earth, and water pollution that may affect the
performance of daily marketplace operations. Consumers have the right to live
and work in an environment that does not threaten the well-being of present
and future generations.

REFERENCES
1. Client Protection in the Philippines | Center for Financial Inclusion. (2021)
2. No Return, No Exchange? No Deal! | DivinaLaw. (2020)
3. Consumer Rights and Responsibilities - consumer protection. (2021)
4. Aaker, D. & Day, G. (1978) "A Guide to Consumerism." In Consumerism: Search
for the Consumer Interest, New York: The Free Press
5. Singh, b. (2002). Consumer Education on Consumer Rights and Responsibilities,
Code of Conduct for Ethical Business, and Importance of Product Labelling.
 LA CONSOLACION UNIVERSITY PHILIPPINES
GRADUATE SCHOOL DEPARTMENT

Ms. MARIA CRISTINA G. MORFI Dr. MARTIN ARMANDO CRUZ

DBA 516 PROFESSOR
6. Prajapati, R., et al. (2009). A Study of Consumer Awareness Regarding Household
Goods and Services Among Female of Mehsana City.
7. Dumalagan D. (2004). Economic Globalization and Its Impact on Consumer rights
in the Philippines, Thailand, and Indonesia.