With the upcoming holiday season, many South Africans have already made their holiday bookings in advance or are looking to secure last-minute accommodation. Consumers have various rights and protections, including the crucial right to cancel certain transactions. Regarding the cancellation of holiday accommodation bookings, Section 17 of the Consumer Protection Act (CPA) serves as a pivotal legal framework, outlining the rights and responsibilities of both consumers and accommodation providers. This article aims to illuminate the legal intricacies surrounding the cancellation of holiday accommodation bookings in South Africa and why the “no refunds’ cancellation policy might actually be illegal.

Section 17 of the Consumer Protection Act

Section 17 of the CPA expressly states that a consumer has the right to cancel any advance booking, reservation, or order for goods or services to be supplied, subject to the following conditions:

A consumer may cancel a booking, reservation, or order for any goods or services to be supplied, subject to the following:

(a) The consumer may cancel the transaction without reason within five business days after the later of the date on which—

(i) the transaction or agreement was concluded; or

(ii) the goods were delivered to the consumer.

(b) The consumer must return any goods supplied in terms of the transaction to the supplier at the consumer’s risk and expense, within 15 business days after the date of cancellation of the transaction.

(c) The supplier must refund to the consumer—

(i) the full purchase price paid by the consumer, including the cost of delivering the goods to the consumer; or

(ii) if the consumer has already made a payment of any part of the purchase price in terms of the transaction, the supplier must credit the consumer with the purchase price paid by the consumer, including the cost of delivering the goods to the consumer, and apply the credit as agreed in terms of the transaction.

Consideration of Penalties or Charges under Regulation 5(3)

In addition to the rights provided under Section 17, Regulation 5(3) of the CPA further regulates the imposition of penalties or charges. This regulation stipulates that any penalty or charge, as contemplated in Section 14 of the CPA, may not exceed a reasonable amount. The determination of what constitutes a reasonable amount is guided by several factors, including:

Regulation 5(3): The penalty or charge contemplated in section 14 may not exceed a reasonable amount, taking into account the following factors:

(a) the nature and duration of the supplier’s business relationship with the consumer;

(b) the amount of the transaction;

(c) the value of the goods or services that are the subject of the transaction, as the case may be;

(d) the cost to the supplier of recovering any goods that are the subject of the transaction, or of rectifying any non-performance of the agreement; and

(e) the general practice in the relevant industry.

Summary of Consumer’s Rights

  • Timing: The CPA stipulates that consumers may cancel a reservation within five business days after concluding the transaction. This cooling-off period is designed to give consumers the opportunity to reconsider their decision without facing financial consequences.
  • Written Notice: To exercise the right to cancel, consumers must provide written notice to the accommodation provider. This notice should clearly express the intention to cancel the booking and be sent within the specified timeframe.
  • Refund of Payments: Upon cancellation, the accommodation provider is obligated to refund any payments made by the consumer within 15 business days. This includes any deposits or partial payments that may have been collected.

Understanding both Section 17 and Regulation 5(3) is crucial for both consumers and accommodation providers, as these provisions delineate the conditions for cancellation and ensure that any associated penalties or charges remain reasonable in accordance with the factors specified in Regulation 5(3).

By understanding these provisions, both consumers and accommodation providers can navigate cancellations in a manner that is legally sound and fair. It is crucial for consumers to be aware of their rights, including the timing and notice requirements, to make informed decisions and protect their interests when cancelling holiday accommodation bookings. Accommodation providers, in turn, must ensure compliance with the law to maintain transparency and uphold consumer rights in the realm of holiday reservations.