Cancellation and the right to return goods and services

The consumer may cancel orders for goods and services prior to delivery or performance. If a product has been delivered, the consumer has no general right to return it, except in distance selling.

Cancellation

  • The consumer may cancel
  • a product before it is delivered to the buyer;
  • this also applies to services that have been requested and
  • to additional work, even if work has commenced.
  • If a consumer cancels, the seller cannot demand payment, except for services already provided and any work that must be completed in spite of the cancellation.
  • The seller may demand damages because of loss or damage sustained due to cancellation. The seller shall prove his or her loss or damage, unless the parties have agreed that damages shall be paid in the event of cancellation, in which case there is an obligation to limit the loss or damage.
  • Compensation must be determined by taking into account, among other things, the total price of the service. The consumer's payment obligation, however, can never be greater than the total price of the negotiated project.

The right to return goods

  • As a rule, a purchase is a binding agreement between the seller and the buyer, unless the parties have agreed on the right to return, e.g. if the product is purchased on a trial basis.
  • In general, therefore, there is no right to return, except in the case of distance sales (door-to-door sales, itinerant trading, telephone sales, and mail order and Internet sales). Many shops, however, grant consumers the right to return goods in accordance with agreed conditions.
  • If a product is defective, certain rules apply.

The right to return regarding distance sales

  • In door-to-door and distance sales in Iceland, the consumer can withdraw from the purchase within 14 days, without having to provide a reason, and have the goods refunded. The consumer must return the product undamaged to the seller.
  • If a buyer purchases a product from a seller within the EEA, e.g. over the Internet, he or she shall in all cases be entitled to a cooling-off period of 7 working days from the receipt of the product. In some countries the cooling-off period is longer.
  • In the event of a dispute relating to a consumes transactions in other European countries, redress may be sought from, in which case the Consumers Association of Iceland will handle the matter.
  • If a consumer has withdrawn from the purchase, the seller is under obligation to refund all payments that may have been collected. Refunds shall be take place as soon as possible and not later than after 30 days.

Rules of procedure pertaining to the right to return

Guidelines concerning returns, credit notes and gift certificates have been issued. Their main provisions are:

  • If a product is labelled with a gift label, no receipt is necessary when the product is returned.
  • The consumer must either receive a refund or credit receipt for a product that is returned.
  • If a product is returned after discount sales have begun, the refund is based on the discounted price of the product.
  • Credit receipts are valid for four years from the date of issue unless otherwise provided for on the receipt, but never for less than one year. If a credit receipt is issued within 14 days before the beginning of a discount sale, the receipt cannot be used during the discount sale except with the approval of the seller.
  • Credit receipts remain in effect with respect to any parties to which the seller may assign his or her retail operations.
  • Some shops go further than the rules of procedure provide for, e.g. by refunding goods instead of issuing credit receipts, or granting a longer cooling-off period.

Links of interest

Laws and regulations