Nintendo is breaking the law

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writer icon Kay Lagercrantz     Ernesto Rodriguez   |   Business     🕐 01. Mar. 2018

The Norwegian Consumer Council (NCC) is taking on video game giant Nintendo for breaking the consumer purchase law. Nintendo does not include the option to ask for a refund on their digital platform Nintendo eShop. This means that consumers are not able to return a purchase once it is made.

Normally this law does not apply to digital products, as they are “opened” and therefore used right away and exempt. However, if you want to be one of the first owners of a video game, it is sometimes possible to buy a game in advance. This way you secure ownership of the game prior to its release. You do not have to stand outside a shop, waiting in line, to be among the first to buy it. It will download to your device as soon as the game is launched, and you can start playing immediately.

A company may release a game months in advance, with excitement being generated around the launch of the pre-order date, as well as the actual release date for the game itself. The problem arises when a customer wishes to cancel their purchase in advance of the game’s release. This can happen for a number of reasons. It is worth noting that, in accordance with consumer law in Norway, and incidentally, much of Europe, a consumer has no obligation to explain their request for a refund.

In the case of a pre-order, the customer may have received more information subsequently released about the game, which changes their perception of the product. This would mean that the product they expected and paid for is no longer the same as the product they are now going to receive. In this case, they may want to cancel their purchase, and this is where the issues begin.

No returns on digital purchases
Nintendo has no option for claiming returns on digital items sold in their eShop, including in the case of a pre-order. The customer can be enticed to by a product that is not even launched yet, and unable to change their mind further down the road, for whatever reason they may have. Nintendo state that all purchases are final. They do not even give you the chance to cancel a pre-ordered game, despite the finished product not being on the market yet.

Right to cancel
When you are in a physical shop and you buy a product, you have up to 14 days to return the product. If you do so, you will receive a full refund, provided it is unused. This extends to the digital world where provided the product is not used, a purchase can still be returned. This is less common as digital products are generally considered used at point of purchase.

The Consumer Rights Directive states that the consumer does not have the right to cancel a purchase “if the supply of the digital content has begun with the consumer’s prior express consent and his acknowledgement that his consent entails that he thereby loses his right of withdrawal.” This is in order to differentiate between used and unused content.

However, Nintendo does not give an option to cancel a pre-ordered purchase, which is problematic because pre-ordered purchases are not exempt from the right to a refund. The digital content has not yet begun, and the product itself is not yet released.

Cancelling should be easy
Other companies have also been criticised for the very lengthy and complicated process they put customers through. Customers who wish to get a refund need to fill in long forms, or have to contact customer service.

The guidelines from the Norwegian Consumer Council suggest that in order to fulfil the criteria in the Consumer Rights Directive, it should be quick and easy to cancel a purchase, for example by clicking on a clearly marked button that is placed appropriately.

In the case of Nintendo, there is no option to ask for a refund, it is simply omitted. They could try to argue that it is possible to cancel a purchase. However, by not including any specific information for customers it becomes very difficult for someone to confirm a cancellation and apply for a refund.

The Norwegian Consumer Council have contacted Nintendo with a demand for clarification of their terms and conditions for cancellations and refunds. Meanwhile, there are gaming platforms with digital shops, such as Steam and Origin, who have distinct and easy options to refund a pre-order, by the simple click of a button. It is clearly possible to implement, so what might Nintendo have as grounds for their omission?

Moral responsibility
One could question if it is acceptable to refuse consumers the right to withdraw purchase during a pre-order period, when they have not had a chance to see the finished product. Aside from the legality of this issue, does Nintendo have a moral responsibility to lead by setting a good example?

As one of the largest video games companies in the world, with net sales of over 4.4 billion US dollars in 2016, the rest of the video game world is watching them. Some might consider Nintendo to be above the law in this respect, but surely their high status should have the opposite effect? Are we right to expect more from giants like Nintendo, or should we just expect less of everyone else?

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