Question: BAKER v. BURLINGTON COAT FACTORY, 175 MISC. 2D 951, 673 N.Y.S.2D. 281 (1998)

FACTS Plaintiff Catherine Baker purchased a fake fur coat for $127.99 from defendant Burlington Coat Factory Warehouse in Scarsdale, New York. She returned the coat two days later after it began shedding profusely. She demanded a refund of her $127.99 cash payment. Burlington offered either a store credit or a new coat of equal value, but refused to issue a cash refund. Baker filed suit, alleging, among other things, breach of contract, and breach of the implied warranty of merchantability. Burlington noted that it displayed several large signs in its store, which stated: "Warehouse policy: Merchandise, in New Condition, May be Exchanged Within 7 Days of Purchase for Store Credit and Must Be Accompanied by a Ticket, and Receipt. No Cash Refunds or Charge Credits." In addition, the front of Baker's sales receipt stated: "Holiday Purchases May Be Exchanged Through January 11th, 1998 In House Store Credit Only No Cash Refunds or Charge Card Credits." The back of the receipt stated: "We Will Be Happy to Exchange Merchandise In New Condition Within 7 days When Accompanied By Ticket and Receipt.

However, Because Of Our Unusually Low Prices: No Cash Refunds or Charge Card Credits Will Be Issued. In House Store Credit Only." Baker stated that she had not read this language and was not aware of Burlington's "no cash refunds" policy. DECISION The court found for Baker, stating: Under most circumstances retail stores in New York State are permitted to establish a no cash and no credit card charge refund policy and enforce it. Retail store refund policies are governed, in part, by General Business Law § 218-a, which requires conspicuous signs on the item or at the cash register or on signs visible from the cash register or at each store entrance, setting forth, its refund policy including whether it is "in cash, or as credit or store credit only". Although plaintiff professed ignorance of defendant's refund policy; the court finds that defendant's signs and the front and back of its sales receipt reasonably inform consumers of its no cash and no credit card charge refund policy. Notwithstanding its visibility the defendant's no cash and no credit card charge refund policy as against the plaintiff is unenforceable. Stated, simply when a product is defective as was the plaintiff's shedding Fake Fur, the defendant cannot refuse to return the consumer's payment whether made in cash or with a credit card.

UCC§ 2-314(2)(c) mandates that "a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind(2) Goods to be merchantable must be (c) fit for the ordinary purposes for which such goods are used." Should there be a breach of the implied warranty of merchantability then consumers may recover all appropriate damages including the purchase price in cash. The court finds that defendant sold plaintiff a defective and unwearable Fake Fur and breached the implied warranty of merchantability. The plaintiff is entitled to the return of her purchase price of $127.99 in cash and all other appropriate damages. The court specifically noted that the UCC's provisions regarding the implied warranty of merchantability preempt any contrary provisions in General Business Law Section 218-a permitting a no-cash-refund policy. If the coat had not been defective and Baker had simply had a change-of-heart about her purchase, Section 218-a would have applied and Baker would not have been entitled to a refund. Because the coat was defective, however, the limitations in the exchange policy did not apply.