Policy and consumer objectives
- Section 2 declares it is the policy of the State to protect the interest and promote the general welfare of the consumer and to establish standards of conduct for business and industry.
- Section 2 directs the State to implement measures to achieve consumer protection objectives, including:
- Protection of consumers against deceptive, unfair and unconscionable sales acts and practices.
- Institutionalization of the industry practice of giving exact change to consumers of goods and services.
- Provision of information and education to facilitate sound consumer choice and proper exercise of rights.
- Provision of adequate rights and means of redress for consumers.
- Provision of penalties for offenders.
Key definitions for enforcement
- Section 3(a) defines “Business establishment” as any person, natural or juridical—single proprietorship, partnership, or corporation—including a government-owned and -controlled corporation or a government entity exercising its proprietary functions, engaged in selling goods or providing services in the Philippines.
- Section 3(b) defines “Change” as the excess in the payment given by a consumer for goods and services purchased or received from a business establishment.
- Section 3(c) defines “Consumer” as a natural person who purchases goods or services in cash.
- Section 3(d) defines “Goods” as all types of tangible property that could be bought and sold, with possession transferable in whole or in part, temporarily or permanently.
- Section 3(e) defines “Gross sales” as the total invoice value of sales, before deducting for customer discount, allowances and returns.
- Section 3(f) defines “Insufficient change” as a change that is less than what is due the consumer.
- Section 3(g) defines “Price” as any device written, printed, affixed or attached to a good, or displayed in a consumer retail or service establishment, indicating the retail price per unit or services.
- Section 3(h) defines “Services” as all types of commercial activities that enable the supply, access to, consumption or use of goods, intellectual property, or other services.
- Section 3(i) defines “Shortchange” as the act of giving insufficient or no change to a consumer who purchased a product or service.
Duties and prohibited conduct
- Section 4 imposes on business establishments the duty to give the exact change to the consumer without waiting for the consumer to ask for it.
- Section 4(a) provides that it is unlawful for any business establishment to shortchange a consumer even if such change is only a small amount.
- Section 4(a) further provides that nothing in the Act restricts business establishments from giving an amount greater than the sufficient change.
- Section 4(b) makes it unlawful for a business establishment to give change in any form other than the present currency.
- Section 4(b) makes it unlawful for a business establishment to ask consumers for permission to be exempted from the Act, including for reasons such as nonavailability of small bills or coins.
- Section 4(c) requires business establishments, when appropriate, to use price tags indicating the exact retail price per unit or service, which already includes the taxes applicable to the goods or services offered.
- Section 4(c) requires business establishments to put signs in conspicuous places or reflect in the official receipts issued the taxes incorporated in the retail price per unit of goods or services to avoid misleading consumers as to the exact price to pay and the exact change due them.
Consumer complaint and DTI investigation process
- Section 5(a) requires the consumer to write and submit a letter of complaint to the Department of Trade and Industry (DTI) not later than ten (10) working days after a violation has been committed.
- Section 5(b) requires the DTI to conduct an investigation and issue a notice to the establishment involved within not more than ten (10) working days after the complaint has been submitted.
- Section 5(c) requires the DTI, after a full investigation, to issue its decision and findings not later than thirty (30) days from receipt of the complaint.
- Section 5(d) preserves consumer rights by providing that nothing limits or impairs the rights and remedies of a consumer under any other law.
Penalties, escalation by offense count
- Section 6 provides that any violation determined by the DTI under Section 5 is punished with escalating penalties by offense count.
- First offense: a business establishment is fined PHP 500.00 or three percent (3%) of gross sales on the day of the violation, whichever is higher.
- Second offense: a business establishment is fined PHP 5,000.00 or five percent (5%) of gross sales on the day of the violation, whichever is higher.
- Third offense: a business establishment is fined PHP 15,000.00 or seven percent (7%) of gross sales on the day of the violation, whichever is higher, and its license to operate is suspended for three (3) months.
- Fourth offense: a business establishment is fined PHP 25,000.00 or ten percent (10%) of gross sales on the day of the violation, whichever is higher, and its license to operate is revoked.
- Section 6 requires that, in addition to the fine, the business establishment must pay the complainant the total amount of change it failed or refused to give, as determined from the DTI audit.
Implementation and consumer education
- Section 7 mandates the DTI, in consultation with appropriate stakeholders and other government agencies, to promulgate implementing rules and regulations within one hundred twenty (120) days from the effectivity of the Act.
- Section 8 requires the DTI to conduct an education campaign to inform consumers of the Act’s provisions.
- Section 8 requires the DTI to regularly publish a list of establishments found to have violated any provision of the Act.
Separability, repeal of inconsistent laws
- Section 9 provides a separability rule: if any part or provision of the Act is declared invalid, the declaration does not affect the other provisions.
- Section 10 provides that all laws, decrees, executive orders, issuances, rules and regulations, or parts thereof inconsistent with the Act are repealed, amended, or modified accordingly.