Here are some key concepts from the CPA that will help your business comply with the law. This section also outlines what you need to know to meet your consumer protection obligations under the act.

Information

The products or services you sell, and how and where you do business, will determine what information you must provide to consumers, and more importantly, the rights that consumers have.

For example, a lawn care company whose consumers sign agreements at their home should have a different kind of agreement than a lawn care company that has its consumers sign an agreement at their company’s place of business.

A consumer who enters into an agreement at their door for lawn care services is entitled to a 10-day cooling-off period in which they have the right to cancel the agreement if they change their mind. A person who enters into an agreement at the business’ location does not have the same entitlement.

If the consumer cancels the agreement, your business must provide a full refund within 15 calendar days and the consumer must return anything (that can be returned) that your business left with them under the agreement. There is one exception to refund/return in “direct agreements” that cover emergencies, such as home repairs. A “direct agreement” is a consumer agreement that is negotiated or concluded in-person, at somewhere other than your place of business; more information is in the Type of Agreements section.

Estimates

Does your business include estimates of work to be performed in its contracts with consumers? If so, you cannot bill a consumer more than 10% above the estimated price, unless the consumer agrees to the additional charges in writing. Furthermore, you should make every effort to ensure your estimate is as accurate as possible. If the project changes in a major way, make sure you provide the consumer with a revised written estimate, and we recommend that you both sign off on the new price. Learn more about consumer rights.

Did you know?

Consumers in Ontario have one year to withdraw from an agreement based on an unfair practice by a business.

Refunds

There are very specific situations when refunds are required by law. These apply in situations where consumers did not receive their goods or services on time, or did not receive the product that they requested. Please refer to the section that applies to the types of agreements your business requires, so that you know what the timelines are for the repayment.

Unfair practices

It is an unfair practice for a person to make a false, misleading, or deceptive representation. (Section 14 of the Consumer Protection Act, 2002)

Here are some examples of false or deceptive representation. Note that these examples are not an exhaustive list:

  • An appliance store salesperson informs a consumer that the model and style of a refrigerator currently on sale is the most eco-friendly, top consumer-rated, newest model the manufacturer makes—but the salesperson knows that information is outdated and no longer true
  • an owner of a spa that provides massage services tells clients that its staff members are all registered massage therapists when they do not possess the designation and have not been appropriately trained
  • an owner of a spa that provides massage services tells clients that its staff members are all registered massage therapists when they do not possess the designation and have not been appropriately trained
  • a store sells electronics that they advertised as new when they have been refurbished
  • a heating, ventilation, and air conditioning (HVAC) sales representative presents themselves as being affiliated with government programs, or their products/services to be eligible for government rebates, when they are not

There is a secondary category of unfair practices, known as unconscionable representations. Examples of these include:

  • asking a consumer who is vulnerable, for example, because of age or language barriers, to sign an agreement for goods or services when they are not able to protect their own interests
  • selling a water purification system to a consumer for thousands of dollars more than what a consumer could purchase for the same product elsewhere
  • Pressuring a consumer to enter into an agreement

It is also against the law to pressure someone to renegotiate an agreement when the business has the consumer’s goods in its possession. For example, if a moving company is transporting a consumer’s goods, it is illegal for the movers to refuse to deliver the goods in an attempt to try to negotiate a higher fee.

These examples are important for every business to understand because consumers have the right to withdraw from—or what the act calls “rescind”—agreements" if they entered into the agreement as a result of an unfair business practice. It is also an offence under the CPA to commit an unfair business practice, overall. If the consumer takes the matter to court, and is successful, the court may award damages, including punitive damages. Overall, there are potential penalties for non-compliance which we would highlight in the Consumer Complaints section.

If a consumer withdraws from an agreement with your business, your business is obligated to provide a satisfactory response within 30 calendar days, which may include a refund.

Rules for loyalty reward points

Many businesses offer reward points programs to thank customers for their loyalty. Through these programs, you can:

  • earn reward points based on purchases
  • accumulate the points over time
  • exchange these points for goods or services at a later date

Before consumers can sign up, the business should ensure that the agreement includes:

  • how to earn points
  • what points can be used for
  • any limits or conditions, for example, some programs have blackout periods when consumers cannot use points or require them to stay active in the program

Some points can’t expire

On January 1, 2018, rules came into effect that stop the expiration of reward points based only on the amount of time that has passed since they were earned. However, the rules are not an all-out ban on expiring points. In some cases, reward points may still expire, including if the:

  • reward program your business created closes accounts when a member is inactive (does not earn or redeem any points) for a long period of time and this is stated in the membership agreement
  • program issues a voucher as a reward (for example, a discount on a purchase), that is considered a gift card and cannot expire
  • reward points cannot be redeemed for any single item over $50

Any points (earned at any time) which expired between October 1, 2016, and January 1, 2018, due to the amount of time passed since they were earned, and are not exempt, are required to be returned or reinstated.

Gift cards, gift certificates and vouchers

If you sell these products, there are a few legal requirements that you should be aware that most retail businesses cannot have an expiry date on these products. There are some exceptions, which include: gift cards for one specific service (for example, a gift certificate for a massage at a spa may come with an expiry date and lose its value if not used); or those issued for a charitable purpose.

Under the act, your business cannot charge extra fees, such as:

  • activation fees or added service fees to purchase the card or to use the card
  • fees that reduce the value of the gift card over time, sometimes called dormancy fees

Your business is allowed to charge for:

  • customizing a gift card
  • replacing a lost or stolen card

Learn more about specific rules, including on gift cards, gift certificates and vouchers.