Peronal finance: All present and correct for Christmas refunds

The toy is broken, the cardigan doesn't fit, and the perfume smells awful - but getting your money back could be tricky.

BOXING DAY was once the highlight of the season's festivities, when employers distributed Christmas "boxes" to devoted employees and servants. However, in modern Britain it is the day when reality somewhat belatedly sinks in.

It hits us like a hangover, the orgy of spending in which we squandered billions of pounds on overpriced presents that no one wanted. And so back to the shops, where the pre-turkey smiles of helpful sales assistants have been replaced by the churlish frowns of the jobsworths.

And where the queue itself doesn't defeat you, the law conspires with retailers to make it as difficult as possible for you to get your money back.

Where something has turned out to be broken, you have an unequivocal right to your money back under the Sale of Goods Act, which promises a full refund on any item "of unsatisfactory quality" or "not fit for the purpose". However, "unsatisfactory quality" does not extend to "value for money", which will be a sore point with many parents today who have paid a high price for a big box with not much inside.

I scoured several high streets for a chocolate-making kit, one of the big sellers this season, of which there are a number on the market. When I finally found some at a large toy chain, the manager told me straight that it was "not worth the money".

He stopped short of recommending that I didn't buy it but did warn that I would be paying nearly pounds 20 for a bar of chocolate, half a packet of biscuits and a couple of moulds. Those who have coughed up on similarly disappointing packages face a hard struggle for compensation.

The Office of Fair Trading says "satisfactory quality" can involve very subjective judgements. Consumers can only complain to their local trading standards office. Even where goods are obviously broken, shoppers need to act quickly. A full refund is mandatory only where the goods have not been "legally accepted", which means that they must be returned to the store at the earliest opportunity.

Don't be fobbed off with the offer of a repair, a credit note or a return of the goods to the manufacturer. Your contract was with the retailer, and you are owed a full cash refund, if that is what you want.

Aside from faulty goods, your statutory rights for an exchange or refund are more limited. In fact they are zilch. Under the law, if you don't like the colour or an item doesn't fit you, that's tough.

However, most of our major retailers will offer some form of exchange, provided you have a receipt. But their refund policies are complex, and some items, such as cosmetics, underwear and swimwear, are never accepted back.

Dixons, which owns Currys, PC World and The Link, will not offer anything at all without a receipt. Even with one, you must return an item within seven days or it's yours for life, except for mobile phones, which can be returned after 14 days. Headphones, software, pre-recorded videos, tapes and CDs must be sealed.

The Kingfisher group has different rules for all its stores. B&Q will give you your money back or exchange only with a receipt and within 28 days of purchase. Without a receipt you are on your own.

Woolworths, also part of the Kingfisher group, will offer an exchange or gift vouchers without a receipt, but warns that it may refer faulty products to the supplier to establish the fault. Forget that; you are owed a full refund.

Superdrug is alone among cosmetic retailers, in that it will offer a no-quibble promise to refund the purchase price on health and beauty products even without a receipt. But this extends only to Superdrug branded products. Refunds and exchanges are given on other brands only with a receipt.

At MVC, also within the Kingfisher group, it is all much more civilised. Every purchase is computerised, so the store itself knows what was bought and where. This means that full refunds are available, irrespective of receipts.

John Lewis, Boots and Marks & Spencer all operate a similar policy of offering cash refunds with a receipt and either an exchange or vouchers without, provided the item is in tip-top condition.

But what happens when you don't know the price? In some stores it's simple, because they re-barcode the label every time the price changes.

However, Marks & Spencer, one of the few stores with no time limit on exchanges or refunds, says that it relies on customers' honesty on price.

A spokesman says: "We ask when it was bought, and that is the price they get. If someone tells us it was a Christmas present, even though the item has been selling at half that price in the sale for more than a month, we refund the pre-sale price.

"Of course, there is nothing to stop someone buying in the sale, then returning the item and claiming it was bought for more, and receiving an exchange for a higher value. But we prefer to err on the side of the customer, rather than suspect everyone of fraud."