RELATING TO CONSUMER PROTECTION.

SB2956

THE SENATE

S.B. NO.

2956

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to consumer protection
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

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SECTION 1.
�
The legislature finds that the majority of
merchants that sell cosmetics allow return of goods for refund or exchange.
�
However, a small but growing subset of
merchants that sell cosmetics
refuse
to accept returns of goods for refunds or exchanges.
�
Merchants that sell cosmetics and refuse to
accept return of goods for refund or exchange generate frequent consumer
complaints to the office of consumer protection.
�
Merchants that sell cosmetics that refuse to
accept returns also reportedly engage in high-pressure sales tactics and
reportedly target visitors from out of state.
�

These merchants may operate under the belief that visitors to the
State are not familiar with state consumer protection laws requiring merchants
to post conspicuous signage notifying purchasers of one of the following
limitations:

����
(1)
�
Refunds only;

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(2)
�
Refunds or merchandise credit only;

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(3)
�
Exchanges or merchandise credit only;
or

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(4)
�
No refunds, merchandise credits, or
exchanges.

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The
legislature also finds that these merchants may believe that visitors to the
State will be less likely to pursue legal remedies against a merchant for
violation of consumer protection laws.

����
The
legislature further finds that merchants that sell cosmetics and refuse to
accept returns or exchanges cause widespread consumer dissatisfaction and harm
to the business reputation of the State.
�

Consumers who have made purchases from merchants that sell cosmetics
have frequently reported a lack of visible signage indicating "no
refunds" or "all sales final".
�

Reasons for lack of visible signage include that there is none posted,
it is too small to read, or transactions are completed in a location where
signage is not visible.

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The
legislature further finds that consumer complaints reveal that merchants that
sell cosmetics are currently selling costly LED light therapy devices to
consumers with increasing frequency.
�
Merchants
that sell cosmetics advertise the LED light therapy devices for various
cosmetic purposes, including acne treatment, skin rejuvenation, collagen
production stimulation, and cutaneous wound healing.
�
These LED light therapy devices are
reportedly sold for thousands, tens of thousands, or in some instances hundreds
of thousands of dollars.
�
Consumers have
commonly reported learning only after the purchase is made that no returns are
allowed.
�
These consumers suffer
significant financial harm when a merchant refuses to accept a return of goods
in these situations.
�

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Accordingly,
the purpose of this Act is to
ensure
transparency, accountability, and fair treatment for consumers who purchase
cosmetics by:

����
(1)
�
Defining the term
"cosmetics";

����
(2)
�
Clarifying conspicuous signage
requirements;

����
(3)
�
Requiring merchants that sell cosmetics
to accept returns of new or unopened goods within specified timeframes; and

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(4)
�
Beginning January 1, 2027, r
equiring
merchants that sell cosmetics and receive three or more warning letters from
the office of consumer protection for failing to post conspicuous signage to
post storewide return and refund policy signage.

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SECTION
2.
�
Chapter 481B, Hawaii Revised
Statutes, is amended by adding a new section to part I to be appropriately
designated and to read as follows:

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"
�481B-
�
Returns and refunds; mandatory signage;
office of consumer protection.
�
Any merchant that sells cosmetics and
receives three or more warning letters from the office of consumer protection
for failing to post a conspicuous sign as required by section 481B-5.5 shall
post return and refund policy signs visible at the entrance of the store, and
up to five additional signs throughout the store, ensuring that no fewer than one
sign is visible from each point of sale.
�

The signs shall be distributed to the merchant by the office of consumer
protection at no charge to the merchant.
�

Each sign shall be not less than twenty inches in height and thirty
inches in length; have a yellow background with black letters and numbers not
less than three inches in height, and contain the following language:

"Refunds accepted within 30 days of
purchase.
�
Between 30 and 60 days of
purchase, the merchant may choose whether to provide a refund, merchandise
credit, or exchange.
�
No returns accepted
after 60 days."

The merchant shall be reminded of
this signage requirement in each warning letter issued by the office of
consumer protection.
"

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SECTION

3
.
�
Section
481B-5.5, Hawaii Revised Statutes, is amended to read as follows:

����
"
�481B-5.5
�
Returns
for refunds, merchandise credits, and exchanges.
�
(a)
�
As
used in this section, unless the context otherwise requires:

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"Ancillary
charges" includes all charges paid to the merchant that are necessary for
the use of the goods for their purchased purpose and all sums paid for
agreements for service, warranty, or replacement.

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"Conspicuous
sign" means a sign posted in the merchant's place of business in a [
location
reasonably calculated to bring the sign to the attention of
]
manner
designed to ensure that it is noticed by
purchasers before a purchaser
makes a purchase[
.
]
, written in boldface type with a minimum font
size of fourteen point, which may be included:

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(1)
�
On a sign attached to the item
itself;

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(2)
�
On
a sign affixed to each
cash register or point of sale;

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(3)
�
On
a sign so situated as to
be clearly visible to the purchaser from the cash register, payment terminal,
or digital device used to process sales and issue receipts to purchaser; or

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(4)
�
On
a sign posted at each
store entrance used by the public;

provided
that the language included in the conspicuous signage shall also be disclosed
on the merchant's website, if applicable.

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"Cosmetics"

includes all
articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced
into, or otherwise applied to the human body or any part thereof for cleansing,
beautifying, promoting attractiveness, or altering the appearance.
�
Examples of cosmetics include but are not
limited to skin moisturizers, perfumes, lipsticks, fingernail polishes, makeup,
cleansing shampoos, permanent waves, hair colors, deodorants, and LED light
therapy devices, as well as any substance intended for use as a component of a
cosmetic product.
�

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"Exchange"
means a transaction between a merchant and a purchaser in which a previously
purchased item is exchanged for another item.

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"Full
amount of the payment" includes the amount paid for the returned goods,
including any ancillary charges or taxes incident to the purchase of the
returned goods, and without any deduction for restocking of the merchant's
inventory, or for administration of the refund, exchange, or merchandise
credit.

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"LED light therapy device"
includes any instrument that employs light-emitting diodes to produce
wavelengths on the visible light or infrared spectrums for various cosmetic
purposes, including acne treatment, skin rejuvenation, collagen production
stimulation, and cutaneous wound healing.

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"Merchandise
credit" means the crediting to the purchaser of the full amount of the
payment upon return of the goods and allowing the purchaser to purchase goods
from the merchant with the merchandise credit, or applying to the purchaser's
credit account with the merchant, in the amount of the merchandise credit.

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"Merchant"
means any person engaged in the business of offering goods for sale to
purchasers at retail.

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"Point
of sale" means
the
location or system where a retail transaction is completed, involves the
exchange of goods or services for payment, and typically includes equipment
such as cash registers,
payment terminals, and digital
devices used to process sales and issue receipts to customers
.

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"Proof
of purchase" means a sales slip, receipt, credit card slip, or any other
documentation that substantiates the sale of the goods from the merchant and
the amount of payment.

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"Purchaser"
means a natural person who is returning goods that were purchased or received
primarily for personal, family, or household purposes.

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"Refund"
means the return to the purchaser of the full amount of the payment upon return
of the goods, in accordance with this section.

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"Repacking
and transportation charges" means the charges for repacking, pick up, and
transportation of goods previously delivered, unpacked, and set up by the
merchant at the direction of the purchaser.

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"Return"
or "return of goods" means the acceptance by the merchant of goods
from a purchaser, whether for refund, merchandise credit, or exchange, and
includes the cancellation of a custom or special order before the merchant is
obligated to make payment on the order and the cancellation of a layaway.

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(b)
�
Except as provided in this section, all
merchants shall accept the return of goods for refund, merchandise credit, or
exchange, giving purchasers rights that are no less than those provided in this
section.
�
[
The
]
If not subject
to subsection (c), the
merchant may:

����
(1)
�
Choose one of the following policies by
posting a conspicuous sign notifying purchasers of any one of the following
limitations:

���������
(A)
�
Refunds only;

���������
(B)
�
Refunds or merchandise credit only;

���������
(C)
�
Exchanges or merchandise credit only;
or

���������
(D)
�
No refunds, merchandise credits, or
exchanges; and

����
(2)
�
Place specific limitations on the
policy adopted by posting a conspicuous sign notifying the purchasers of any
limitations allowed by subsections [
(c), (d), (e), and (f).
]
(e),
(f), (g), and (h).

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(c)
�
Notwithstanding
subsection (b) to the
contrary, all merchants that sell cosmetics shall accept the return of goods
for refund, merchandise credit, and exchange, giving purchasers rights that are
not less than those provided in this section.
�

A merchant that sells cosmetics shall:

����
(1)
�
Provide
the purchaser with a
receipt of goods purchased either by hard copy, email, or text message;

����
(2)
�
Provide
refunds for returns of new
or unopened cosmetics made within thirty days of the original purchase date;
and

����
(3)
�
Provide
merchandise credits or
exchanges for returns of new or unopened cosmetics made between thirty-one and
sixty days after the original purchase date;

provided
that any attempt
by
a purchaser to return goods to a merchant that sells cosmetics, made within the
time prescribed by this subsection, shall preserve the purchaser's right to
relief under this section.
�
The
purchaser�s rights under this section shall be cumulative to the remedies or
penalties available under all other laws of the State.

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(d)
�

Subsection (c) shall not apply to merchants that sell cosmetics if the
merchants have:

����
(1)
�
A Class 4
retail dealer liquor
license granted by the liquor commission pursuant to section 281-31(e); or

����
(2)
�
A
pharmacy on their premises, permitted by
the board of pharmacy pursuant to section 461-14.

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[
(c)
]

(e)
�
Any merchant
not subject
to subsection (c)
who does not accept the return of goods shall post
conspicuous signs bearing the words "All sales final", or "No
returns for refunds, merchandise credits, or exchanges", or words or
phrases of similar import, to inform customers that no return of goods shall be
accepted.

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[
(d)
]

(f)
�
Any merchant
not subject
to subsection (c)
who limits the period during which goods may be returned
to less than sixty days after the date of purchase or delivery shall post
conspicuous signs informing purchasers of the limitation of the period during
which the return of goods shall be accepted.

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[
(e)
]

(g)
�
Any merchant who excludes a
certain category or type of goods from its return policy shall post one or more
conspicuous signs identifying that type of goods.

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[
(f)
]

(h)
�
Any merchant who excludes
custom or specially ordered goods from its return policy shall post conspicuous
signs, or otherwise notify the purchaser, with the purchaser's written
acknowledgment, of the return policy.
�

For custom or specially ordered goods, the policy may allow the merchant
to accept the return of the goods and to charge the purchaser for the cost of
shipping if the charge is disclosed prior to the purchase.

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[
(g)
]

(i)
�
Any person engaged in the
business of offering goods for sale at retail who fails to post a conspicuous
sign as required by this section shall accept the return of goods from
purchasers and make refunds in accordance with subsection [
(h).
]
(k).

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[
(h)
]

(j)
�
All merchants,
including
merchants that sell cosmetics,
except as provided in subsection [
(c),
]

(e),
shall handle returns for refunds in the following manner:

����
(1)
�
If payment was made in cash, the refund
shall be made in cash at the time of the return of goods, except that if the
amount to be returned exceeds $25, cash refunds may be made by check issued
within ten days of the date of the return;

����
(2)
�
If payment was made by check, the
refund shall be made in cash upon acceptance of the returned goods by the
merchant, or by check issued within ten days of the acceptance of the returned
goods by the merchant, except that if the purchaser's check has not cleared the
bank on which it was drawn, the refund may be delayed for no more than ten days
after the date the purchaser's check has cleared; provided that the merchant
shall have complied with this provision if the check is mailed to the purchaser
at the address provided by the purchaser within the ten-day period;

����
(3)
�
If payment was made by credit card, the
refund shall be made by credit to the purchaser's credit card account; provided
that the merchant shall initiate the submittal of the charge card credit memo
or other appropriate documentation to the merchant's financial institution
within five banking business days after the return of goods or, at the
merchant's option, the refund may be made in cash at the time of the return of
the goods or by check issued and mailed within ten days of the acceptance of
the returned goods; or

����
(4)
�
If payment was made by charging a
credit account administered by the merchant, the refund shall be made by credit
to the purchaser's credit account initiated at the time of the return of the
goods.

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[
(i)
]

(k)
�
All merchants, except as
provided in subsection [
(c),
]
(e),
shall handle returns for
merchandise credit in the following manner:

����
(1)
�
If the purchaser does not select goods
in exchange for the returned goods within thirty days of the return, the
merchant shall make a full refund to the purchaser in cash or in accordance
with subsection [
(h).
]
(j).
�

The merchant shall not be required to return cash in exchange for a
merchandise credit issued pursuant to this paragraph if the merchant posts a
conspicuous sign to notify purchasers that the merchandise credit cannot be
turned into cash;

����
(2)
�
The merchandise credit shall be valid
for a minimum of two years; and

����
(3)
�
Before exchanging the merchandise
credit for cash or, in the case of a purchaser selecting goods in exchange
costing less than the amount of the merchandise credit, refunding the
difference in cash, the merchant may require proof of purchase and require the
surrender of the credit memo.

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[
(j)
]

(l)
�
All merchants, except as
provided in subsection [
(c),
]
(e),
shall handle returns for
exchanges in the following manner:

����
(1)
�
If the exchange involves an exchange
for only size or color, the exchange shall be made without regard to the full
amount of payment; provided that the merchant may make an appropriate
adjustment if the differing size or color normally sells at a different price;
and

����
(2)
�
If the exchange does not involve an
exchange for only size or color, then if the full amount of the payment for the
goods received in exchange is less than the full amount of the payment for the
returned goods, the merchant shall issue a refund or merchandise credit in the
amount of the difference.

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[
(k)
]

(m)
�
In determining the full
amount of the payment for returns for reasons other than damaged or defective
goods, a deduction for repacking and transportation charges may be made from
the full amount of the payment, if the deduction is disclosed to the purchaser
prior to the purchase.

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[
(l)
]

(n)
�
Any return policies adopted
by the merchant pursuant to this section that limits the purchaser's ability to
obtain a refund shall not apply if the goods were damaged or defective prior to
the time of sale, unless the merchant was aware of the damage or defect and
notified the purchaser of the damage or defect in writing prior to the time of
sale.
�
No warranty policy adopted by a
merchant in the State shall require a purchaser to pay an additional fee to
obtain a repair, replacement, or refund for goods returned pursuant to the
warranty.

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As
used in this subsection, "merchant in the State" means a merchant
that:

����
(1)
�
Is created under the laws of the State,
including but not limited to chapters 414, 414D, 415A, 425, 425E, or 428;

����
(2)
�
Is authorized to transact business in
the State; and

����
(3)
�
Possesses a current, unexpired State of
Hawaii general excise tax license.

����
[
(m)
]

(o)
�
A merchant is not required to
accept a return if:

����
(1)
�
There is no proof of purchase, by sales
slips, receipts, or other evidence of purchase of the goods returned;

����
(2)
�
The purchaser has retained the goods in
excess of sixty days after the purchase;

����
(3)
�
The goods have been used or damaged
after sale, or altered by the purchaser at the time of or after the sale; or

����
(4)
�
The goods are of a type which are
unsuitable for resale, pursuant to any applicable law[
.
]
; provided
that, in the event of a conflict between this subsection and subsection (c),
subsection (c) shall control.

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[
(n)
]

(p)
�
The following constitute
unfair methods of competition and unfair or deceptive acts or practices in the
conduct of any trade or commerce under section 480-2:

����
(1)
�
Any violation of this section; and

����
(2)
�
Any act or policy that causes a
compromise of the purchaser's rights and protections established by this
section."

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SECTION
4.
�
There is appropriated out of the
general revenues of the State of Hawaii the sum of $
or so much thereof as may be necessary for fiscal year 2026-2027 for
the office of consumer
protection to purchase and distribute the return and refund policy signs
referenced in section 2 of this Act
.

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The
sum appropriated shall be expended by the
department of commerce and consumer affairs

for the purposes of this Act.

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SECTION
5.
�
Statutory material to be repealed is
bracketed and stricken.
�
New statutory
material is underscored.

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SECTION
6.
�
This Act shall take effect on July 1,
2026; provided that section 2 of this Act shall take effect on July 1, 2027.

INTRODUCED BY:

_____________________________

Report Title:

OCP; Consumer Protection; Cosmetics Sales; Refunds,
Returns and Exchanges; Conspicuous Signage; Appropriation

Description:

Defines the term "cosmetics".
�
Requires all merchants that sell cosmetics to
accept returns of new or unopened goods within specified time frames.
�
Exempts certain merchants that sell
cosmetics.
�
Clarifies the definition of "conspicuous
sign".
�
Beginning 1/1/2027, requires
a merchant that sells cosmetics and receives three or more warning letters from
the Office of Consumer Protection for failing to post a conspicuous sign to
post return and refund policy signs printed and distributed by the Office of Consumer
Protection.
�
Appropriates funds.

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not legislation or evidence of legislative intent.