Getting your deposit back after cancelling your wedding should be easy right? Especially if you give a few months’ notice so that the venue can find another wedding instead? It all depends on who adheres to the Consumer Protection Act (CPA) if you are cancelling your wedding.
After three failed attempts to have the wedding of their dreams that were dashed thanks to Covid-19-related lockdowns, a couple decided to cancel their wedding rather than risk another postponement, when uncertainty dogged the vaccine rollout.
They booked the venue and paid a deposit of R30 674 in December 2019 for the wedding that would cost them R52 814. Their happy day was initially scheduled for 30 May 2020, then March 2021 and finally, 26 November 2021.
However, in January 2021 they decided to cancel rather than face another postponement. They believed that 11 months’ notice was reasonable and fair and requested a refund of the R30,674 they paid, but the venue management refused.
The couple then called in the help of the Consumer Goods and Services Ombud (CGSO) and in reply, the venue management said it would only consider refunding R18 280 calculated as follows:
- The booking value was R52,814, with a (14% cancellation fee (R7 393.96)
- The R5 000 deposit is non-refundable if the wedding is cancelled
- The couple paid another R12 837, bringing the total to R25,674 (after the R5 000 non-refundable deposit is subtracted)
- When the cancellation fee of R7 393,96 is subtracted from the R25 674, the refund amount is R18 280.
What section 17 of the CPA says about cancelling your wedding
However, the CGSO rejected the venue management’s offer and referred it to section 17 of the CPA that protects the right of consumers to cancel advance reservations, bookings or orders.
It provides that consumers can cancel any advance booking, reservation, or order for any goods or services, but a supplier who commits to or accepts a reservation to supply goods or services on a later date can require you to pay a reasonable deposit in advance and impose a reasonable charge for cancellation.
A cancellation fee is unreasonable if it exceeds a fair amount in the circumstances considering the nature of the goods or services, the length of notice and the reasonable potential for the service provider, acting diligently, to find an alternative consumer between the time of receiving the cancellation notice and the time of the cancelled reservation.
The general practice of the relevant industry must also be considered.
According to the CGSO this section clearly requires the calculation of the cancellation penalty cannot be arbitrary but must consider the circumstances, including whether the notice period is sufficient to find a replacement booking.
Therefore, the CGSO told the supplier that its cancellation policies were contrary to the CPA and recommended an amount of R22,580.04 as a fair refund, considering that the cancellation was 11 months in advance and submitted in the context of the lockdown.
This is what section 51 says about non-refundable deposits
The CGSO also referred the venue management to section 51 of the CPA, after they insisted on retaining the initial R5 000 as a non-refundable deposit. Section 51 deals with prohibited transactions, agreements, terms or conditions.
According to section 51 suppliers must not enter a transaction or agreement subject to any term or condition if its general purpose is to defeat the purposes and policy of the CPA, mislead or deceive the consumer or subject the consumer to fraudulent conduct.
Suppliers are also not allowed to use terms or conditions that waive or deprive a consumer of a right in terms of the CPA, avoid their obligation or duty in terms of the CPA or set aside or override the effect of any provision of the CPA.
Terms and conditions are also prohibited if they:
- authorise the supplier to do anything that is unlawful in terms of the CPA
- allow the supplier to fail to do anything that is required in terms of the act
- limit or exempt a supplier from liability for any direct or indirect loss due to gross negligence of the supplier or anyone working for him or
- transfer the risk or liability to the consumer.
The CGSO explained to the venue management that in terms of section 51 of the CPA, contracts drawn up by the supplier cannot contain terms and conditions that are contrary to the provisions of the CPA.
“Our assessment was that any deposits received should be dealt with in line with the provisions of the CPA, as suppliers cannot contract out of the provisions of the CPA. Even if the client signed the agreement, the CPA prohibits contracting out of or waiving certain consumer protection.”
The venue management eventually agreed with the CGSO’s recommendation to deduct a reasonable cancellation penalty and refunded the consumer the recommended amount of R22 580 instead of the R18 280 initially proposed.