Purchase in Montreal Canada with Expected Return in Boston MA

[Need2KnowPls]

Hello - we live in MA and trying to determine if we can file a small claims suit against a major retailer. We purchased an item in Montreal, Canada because they told us we would be able to exchange it in our local store (I looked at the back of the receipt and it states no money could be refunded but item could be exchanged). That was purchased on Black Friday and given as a present for Christmas. The item did not fit (too big) and when we went to exchange at our local store, the clerk did not even review our item but said that since it was purchased in Montreal it had to be returned or exchanged there. We explained that was not what we were told in Montreal and showed our receipt that supports the "exchanges not refunds". We asked to speak to a manager, one wasn't available. Shift supervisor tried to help and texted a colleague who they knew worked in the corporate office (New York) and who told them that is not possible. In the meantime, we were on the phone with the Montreal store and they were telling us we could. After a lot of going back and forth, our local store said no, they couldn't do it and we had to go back to Montreal to exchange the item.

Is it possible to sue the retailer for reimbursement of our travel expenses and loss of wages?

Thanks in advance for your help!

 

[Taxing Matters]

Is it possible to sue the retailer for reimbursement of our travel expenses and loss of wages?

Thanks in advance for your help!

There is a lot I don't know about your situation. But the chances are pretty good that the retailer that you bought the item from in Canada is not exactly the same one in Massachusetts. International corporations tend to create a separate corporation for each major country in which they do business — so the stores in Canada may be owned by a Canadian corporation and the U.S. stores owned by a corporation organized in the U.S. That can be a problem because technically your contract in that situation is with a Canadian corporation, and unless that Canadian corporation had a presence in Massachusetts the U.S. company might argue that it is not the proper party to sue for this, and the Canadian corporation might argue that it is not subject to suit in the U.S.

There is also the problem of what exactly the exchange policy is. Is it the case that you can exchange it at any of the company stores worldwide, or was it supposed be only Canada?

That said, you certainly could try suing the U.S. corporation/branch in Massachusetts and see how the chips fall. But all you can sue for is the value of the item you bought. You don't get reimbursement of travel expenses or lost wages in pursuing the case.

 

[Need2KnowPls]

Thanks for your response @Taxing Matters! We confirmed and the "Corporation" is the same here in the US as in Canada...the "slip/receipt" which is our "sales contract" states "exchanges only no monetary refunds" which is what we were looking for.

When it comes to suing for the value of the item purchased, we were able to exchange it but had to go to Canada to do so which is why we would like to have them reimburse the travel expenses. Had we known (and we EXPLICITLY asked when we were purchasing in Canada about the option of exchanging specifically in our home store) that we would not be able to, we would not have purchased. Would we be able to sue for the value of the item even though we have it?

 

[adjusterjack]

Would we be able to sue for the value of the item even though we have it?

You mean sue for your money back? No. You already know that there are no refunds, only exchanges per your purchase contract. It's just a matter of where the exchange takes place.

However, Massachusetts small claims requires a dollar amount so you would have to sue for a refund just as a matter of strategy. It's possible that, once the local retailer gets served with the summons and complaint, you may end up getting your exchange.

 

[Zigner]

The OP has recourse - a lawsuit would not be successful.

 

[Taxing Matters]

The OP has recourse - a lawsuit would not be successful.

I disagree. If the contract was that the OP may do the exchange in any store of the seller, including stores in the U.S., and the U.S. store is refusing to do the exchange, then the store has breached the contract and the OP does have a good claim to sue. If the retailer won't exchange it then the OP would be entitled to sue for the money paid for the item.

 

[justalayman]

call corporate headquarters and complain to them

I looked at the back of the receipt and it states no money could be refunded but item could be exchanged).

Did it say worldwide? Did it specify anything that would make you believe it included stores outside of Canada?


Regardless of what was said regarding a single business entity, I still suspect a dual entity. It’s too common for major businesses to create a dual entity when operating in two different countries. If true, any possible action would be against the Canadian branch, and taking place in Canada under their laws.

No, no chance of being awarded costs to travel for the suit.

 

[eerelations]

I have worked for numerous multinationals (as an employee, and also as a consultant) and I have never encountered one that hadn't set up separate corporate entities in every country in which it operated. I also know of several multinationals (that I've never worked for just know about them) including Sears, IKEA, Home Depot and Costco, that have set up separate corporate entities in every country they're in. In fact I don-t think it-s (sorry Mexican keyboard acting up again) even legally possible for a company incorporated in one country to operate in another country without incorporating there.

OP, when you "confirmed" that the Canadian company is operating under the US corporate umbrella as the American company, what did you mean by that_ What kind of research did you conduct_

 

[Taxing Matters]

In fact I don-t think it-s (sorry Mexican keyboard acting up again) even legally possible for a company incorporated in one country to operate in another country without incorporating there.

It depends on the country, but in many countries it is indeed legally possible to operate that way. For the U.S. specifically, there is nothing preventing, say, a Canadian corporation from operating in the U.S. through a branch rather than forming a separate business entity (corporation, LLC, etc). I've dealt with the situation of Mexican, Canadian, and European corporations that have done just that — operated here in branch form. But that is the less common way to do it. It is much more common to form a U.S. subsidiary corporation or LLC for the U.S. operations. Similarly, I have dealt with U.S. corporations that have operated in Europe and Canada in branch form (although since the IRS check the box entity classification regulations that is less common than before). Within the EU it is not uncommon for a company in one EU country to operate in another without forming a new entity in the other European nation. The common market rules make that easier.

On the other hand, it is my understanding that it is very difficult if not impossible to do business in China without forming a local Chinese business entity. I have no direct knowledge of that to know for sure since none of my clients have done business there.

How any particular business chooses to operate in another country often comes down to their particular business details, the tax and other laws of each country, and the options available to it. In at least a number of countries, though, operating in branch form is possible. It may not be an option often used, but it's there.