Warning letter to Naked Underwear: No refund after withdrawal
The French online shop ‘Naked Underwear’ has systematically refused to refund the purchase price to customers who have returned goods they ordered, offering store credit instead. According to the Centre for European Consumer Protection (ZEV), this constitutes a clear breach of the European right of withdrawal. We issued the company with a formal warning and were later forced to impose a contractual penalty due to further breaches.
Case summary
The case began with a German consumer who had ordered women’s underwear, including lingerie sets and nightwear, worth 1,400 euros. However, the goods delivered did not meet her expectations. She decided to withdraw from the purchase within the statutory 14-day withdrawal period.
However, ‘Naked Underwear’ only offered two credit note options for future purchases:
- 70% store credit if the customer kept the goods
- 100% store credit if the customer returned the items in their original packaging.
A refund of the purchase price was categorically refused by the company, citing its returns policy and French rules under which underwear is allegedly excluded from the right of withdrawal for hygiene reasons.
Our legal assessment
Under EU law, the right of withdrawal can only be excluded in the case of sealed hygiene products, and only if the seal has been broken and it is not reasonably practicable to clean the items.
In the case of ‘Naked Underwear’, this was not the case: the items were delivered unsealed, simply packed in fabric bags and grouped together in a shipping box. Nevertheless, the shop categorically denied the right of withdrawal regardless of the condition of the goods.
In ZEV’s view, this business practice contravenes applicable consumer law. Furthermore, we have received additional complaints regarding ‘Naked Underwear’. It is likely that numerous customers across Europe are affected.
What ZEV did
ZEV sent the company a warning letter and called on it to stop the illegal practice. ‘Naked Underwear’ subsequently issued a cease-and-desist declaration and amended its returns policy.
However, shortly afterwards, ZEV received further complaints.
Consumers who contacted the company to exercise their right of withdrawal and request the return address were once again only offered alternatives to withdrawal, such as a credit note instead of a refund.
In ZEV’s view, this constituted a further breach of the signed cease-and-desist declaration.
ZEV subsequently claimed a five-figure sum in contractual penalties and demanded that ‘Naked Underwear’ issue a new cease-and-desist declaration.
The company paid the penalty and issued another declaration, undertaking to act in accordance with the law in future.
Next steps
ZEV will monitor the company’s future practices closely to check whether the promised changes are being implemented.
If systematic breaches occur again, ZEV reserves the right to demand an additional (higher) contractual penalty and, if necessary, take legal action.
Consumer information
Have you had similar experiences, such as problems with returning online orders or having your right of withdrawal refused? If so, please get in touch.
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