dtf

TRADE&INDUSIRY

-
IUEMORANDUM

FOR PD Gay A. Tidalgo - Agusan del Norte

OIC Brenda B. Corvera - Agusan del Sur
PD Celestino lL. Negapatan - Surigao del Norte
OIC Romel M Oribe - Surigao del Sur
OIC Arnold D. Faelnar - PDI

FROM THE REGIONAL DIRECTOR

SUBJECT IRR ON RA 10909 OR THE'NO SHORTCHANGING ACT OF

2016"

DATE .4January2O17

This is to furnish you the attached copy of Department Order No. '16-03 or the
IRR on RepublicAct 10909 orthe "No Shortchanging Act of2016".

For your guidance and appropriate action.

O, PAGARAN
t\

Enabltttg 8usiness Elnpowettng Consunrers

OTI-Caraga Regional Office DTI-Caraga Management Systetu is ISO 9001:2008
West Wang, 3'd Floor, D&V Plaza Building, J.C. Aquino Avenue, Cerlified on December 15,2010 per CIP/1431/10/11n36
Euluan Cily, Philippines
Tel. No. (085) 342-5615, 225-5955 Fax No. (085) 815-1271
E-mail addressi dti caraqa@yahoo.com Website: www.dti.qov.ph
-

IVIEMORAN DU M

FOR ALL REGIONAL DIRECTORS

COPY YA

TH RU DIRECTORJAMES E.
or:
^la ^
FROI\i1 ASSISTANT DIRECTOR LILIAN G, SALONGA
OIC.CPAB q

SUBJECT IRR of RA '10909 or the "No Shortchanging Act of 2016"

DATE 27 December 2016

Respectfully furnishrng you a copy of the Department Administrative Order No,

'16-03 or the lmplementing Rules and Regulations (lRR) of RA 10909 or the "No
Shortchanging Act of 2016" signed by Secretary Ramon M. Lopez last 21
December 2016.

Kindly disseminate to your respective provincial offices.

Thank you.

CONSUMER PRO]ECTION ANO AOVOCACY BUREAU

2F Trade Elnauslry 8uilding,361 Sen. GrtJ, pufat Av€nue, t200, MatatiCilt, pnilippines
relephone {.632) 75i.0384 tr*ats 2222 ta 2221,2227, Z2 29 . Fax: (+632)890 4949 , E.mait: coab.Odt, cov 0t
 dti
E

DEPARTMENT ADMINISTRATIVE ORDER NO. 16-03

Series of 2016

Subject IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO.

10909, 'AN ACT PROHIBITING BUSINESS ESTABLISHMENTS FROM
GIVING INSUFFICIENT OR NO CHANGE TO CONSUMERS AND
PROVIDING PENALTIES THEREFOR"

Pursuant to Section 7 of Republic Act No. 10909, the following rules and regulations are
hereby promulgated to implement the provisions of the said Act:

RULE I
Preliminary Provisions

Section 1. Iifle. - These Rules shall be referred to as the lmplementing Rules and
Regulations of Republic Acl No. 10909, or the "No Shortchanging Act of 2016'.

Section 2. Declaration of Policy. - lt is the policy of the State to protect the interest and
promote the general welfare of the consumer as well as establish standards of conduct
for business and industry.

Section 3. Objectives. - The State shall lmplement measures to achieve the following
objectives:

3.1 Proteclion of consumers against deceptive, unfair and unconscionable sales acls
and practices;

3.2 lnstitutionalization oi the industry practice of giving exact change to consumers of

goods and services;

3.3 Provision of information and education lo facilitate sound choice and the proper
exercise of rights by the consumer;

3.4 Provision of adequate righls and means of redress for consumers, and

3.5 Provision of penalties for offenders.

Section 4. Definition o{ Terms. - For purposes of this lRR, the following terms and
phrases shall mean or be understood as follows:

4.1 Eusiness establishment - any person, natural or juridical, whether single

proprielorship, partnership or corporation, including a government-owned and -
controlled corporation or a government entity exercising its proprietary functions,
engaged in. or doing business in the Philippines, either in selling goods or
providing services.

E Ebling 8lsioBss. Emgowering Ccnsumors

OF'ICE OF THE SECRETARY

5F lndustry and lnveslments Bliiding, 385 Sen GllJ Puyat Attnue. l2C0 tlakariCity. Phiiipprles
Terephone (+632) 899.74:O Far (+632) 896 1166 E-rn8it sec{etary@dti.9ov_ph
www dtj gov.ph
 D E PARTMENT A OMI NISTRATIVE ORDER NO.
i6-03
sorlas of 2016
MPLCMENT'NG RULES AND REGULAIIONS OT REPUBUC ACT NO, 1O9O9, "NO SHORTCHANG'NG ACT
oF xrl6"

'''_'€---
4.A Goods - all types of tangible property that could be bought and sold. and the
possession of which could be transferred in whole or in part. temporarily or
permanently,
4.5 Gross sa,/es - the total invoice value of sales, before deducting for customer
discount, allowances and returns;

46 lnfomauunregistered busmess establishment - refers to any person engaged in.

or doing business in the Philippines without business permit, either in selling
goods or providing services, regularly in a permanent place or stall or moving
from one place to another such as, but nol limited to, ambulant vendors,
peddlers, pedicabs, tricycle, e.trikes, "tiangge":

4.7 lnsufficient change - a change lhat is less than what is due the consumers;

4.8 -
License to operate busrness refers to special licenses which allow business
establishments, particularly corporations and partnerships, to engage in certain
kinds of activities or to operate its business;

4.9 Pice tag - any device written, prlnted, affixed or attached to a good, or displayed
in a consumer retail or service establishment for the purpose of indicating the
retall price per unit or services:

4.10 Services - all types of commercial activities which enable the supply. access to,
consumption or use of goods, intellectual prop€rty or other services, and

4 11 ShotTchange - the act of givlng insufflcient or no change to a consumer who

purchased a product or service.

Rule ll
Scope and Coverage

Section 1. Scope and Coverage. - These rules shall apply to all business
establishments, registered or not.

Rule lll
Delineation of Responsibilities

Section 1. Department ol Trade and lndustry - Consumer Protection Advocacy Bureau

(DTI-CPAB). - The DTI-CPAB shall perform the following responsibilities:

1.1 Develop rules and regulations, policies or guidelines to effectively implement the
provisions of RA 10909 (Act). in consultation with the relevant stakeholders and
other government agenciesl

12 lmplement an education campaign through quad media to inform consumers of

the provisions of thrs Act and its IRR:

2
OEPARTMENT AOMINISfRATNE OROER NO. i6-03
Sertes o12016
IMPLE'I'ENIING RULES AND REOUI-ANONS OF REPIJBUC ACT NO. 1O9O9, "NO SHORTCHANGING ACT
oF 2016"

1.3 Regularly publish a quarterly list of the establishments found to have violated any
provision of this Act and its lRR.

Section 2. Department of Trade and lndustry - Fair Trade Enforcemenl Bureau (FTEB)
and Regional Operations Group (ROG). - The DTI-FTEB and DTI-ROG through its Uetd
offlces shall p€rform the following functions:

2.1 Monitor and enforce compliance to the provisions of this Act and its IRR;

?.2 Receive and handle complaints against business establishments violating the
provisions of this Ac1 and its IRR;

?.3 Provide the DTI-CPAB the list of business establishments found to have violated
the provisions of this Act and its IRR; and

2.4 Coordinate with concerned government agencies the revocatjon of the license to
operate of the business establishments found to be violating the provisions of this
Act and its lRR.

Section 3. Bangko Sentral ng Pilipinas (8SP). - The BSP shall perform the following
responsibilities:

3.1 Ensure efficient production, delivery. distribution and circulation of notes and
coins,

J,Z Conduct extensive information or awareness campaign on currency matleG to

encourage consumers to support the BSP'S Coin Recirculation Program, among
others.

Section 4. Bureau ol lntemal Revenue (BlR). - fhe BIR shall be responsible for
overseeing compliance of business establishments in the issuance of Sales lnvoices or
Official Receipts for the sale of goods and services, as applicable.

Section 5. Local Govenment Units (LGUs). - The LGUs shall be responsible in

ensuring that formal or registered business establishments operating under their
respective areas of jurisdiction have business permits.

With regards to complaint on shortchanging involving informal or unregistered business

establishments. the DTI may ask assistance form the LGUs in the invesligation of the
complaint by providing the necessary information and details of the respondent.

Section 6. Land Transpoftalion Fnnchising and Regulatory Board (LTFRB). - the

LTFRB shall be responsible in coordinating and cooperating with the Department of
Trade and lndustry (DTl) - Fair Trade Enforcement Bureau (FTEB) and Regionat
Operations Group with respect to thejr investigation of complaints for violation of this Acl
committed by PUV operators. their drivers, conductors or other personnel which includes
providing the necessary information and details of respondent pUV operators to aid the
DTI-FTEB in the conduct of their investigation.
DEPARTh'ENT ADMINISTRATME ORDER'VO.i 6 - O 3
Se.ias of 2O16
IMPLEMENNNC RULES A'VO REGULAT'OA'S OF REPUBUC ACT NO- 10909, 'NO SHORTCHANGING ACT
oF 2016"

Section 7. Other Concemed Government Agencies. - To effectively carry out the

provisions of this Act and its IRR, the DTI may coordinate with other concerned
government agencies, bureaus or offices.
Rule lV
Duties of the Parties

Section 1. Euslness Establishments. - lt shall be the duty of the business

establishments to:

11 Give exact amount of change to the consumer without waiting for the consumer lo
ask for the same. The cashier or staff clerk or their equivalent, of the business
establishments shall count the change in front of the consumer and place the same
on the hand of the consumer or on the change tray, whichever is applicable;

1.2 Use price tags, when appropriate, indicating the exact retail price per unit or service
which already includes the taxes applicable to the goods or services being offered
The use of price tags shall be in accordance with the provisions of Article 81-83 of
Republic Act 7394 or the Consumer Ac1 of the Philippines and its IRR;

1.3 lssue Official Receipts or Sales lnvoices, as may be applicable, to the consumers:

1.4 Put signs in conspicuous places within the establishments or reflect in the Official
Receipts or Sales Invoices issued, the taxes incorporated in the retail price per unit
of goods or services;

1.5 Post notices in every counter to ensure/remind their cashiers to give exact amount
of change e.g. "P/ease demand for your exact change" ot any language or
literature to such effecl; and

1 .6 Provide the DTI documents on gross sales for the day of the concerned business
establishment and other pieces ol evidence that are material in the determination
of any alleged violation of the provisions of this Act and its lRR.

Section 2. Consumers. - lt shall be the duty of the consumers to:

2.1 Ensure exacl amount of change is received immediately afler every transaclion,

2.? The consumer may report to the business establishment's consumer welfare
desk all instances of short changing for immediate action/remedy or write and
submit a letter of complaint to the DTI not laler than ten (10) working days after a
vlolation has been commined. ln case of the former, it shall not toll the running of
the reglementary period.

Rule V
Prohibited Acts

Section 1 Prohibitions. - The following praclices of business establishments shall be

prohibited

1.'1 Shortchanging a consumer, even if such change is only of a smalt amount.

Shortchanging is not to be construed as restr'cting a business establishment from
giving an amount greater than the sufficient change.
DEPARTMENT ADMINISTRATIVE OROER'VO. i 6 - O 3
Series ol2o16
IMPLEMENTING RULES AND REGULANONS OF REPUBUC ACT NO. 1O9O9,'NO SHORTCHANGING ACT
oF 2016"

1.2 Changing in any form other than the present currency

IJ Asking the consumers for permission to be exempted from the provisions of this
Act and its IRR for any reason, including the non-availability ot small bills or coins
without prejudice to Section 1 .1 above.

Rule Vl
Procedures in Filing a Complaint

Section 1. Procedures in Filing a Complaint on Violation of this Act - This Rule shall
be supplemented by the provisions of Depadment Administrative Order No. 07, Series of
2006 (lnstitutionalizing the Simplified and Uniform Rules of Procedure for Administrative
Cases Filed with the Department of Trade and lndustry (DTl) for Violations of the
Consumer Act of the Philippines and Other Trade and lndustry Laws).

1.1 The consumer shall submit a letter of complaint together wilh a copy of
documentary evidence to the DTI not later than ten (10) working days after the
violation was committed.

Documentary evidences include, but not limited to, ofiicial receipt, sales invoice,
proof of transaction, police reports or other related documenls.

Failure to submit the letter of complaint within the prescribed time or attach the
required documentary evidences shall be a ground for the dismissal of the
complaint.

1.2 The DTl, through s FTEB-Enforcement Division or Regional or Provincial Oftice

shall conduct an investigation within ten (10) working days from the date the
sworn complaint was received. lf and when the FTEB Director, the Regional
Director or the Provincial Director or his authorized representative believes that a
prima facie case exist based, on the allegations in the complaint and on the result
of the investigation, he shall file a formal charge against the business
establishment and elevate the case for adjudication.

1.3 After the filing o{ the formal charge, the concerned DTI Adjudication Officer shall
issue notice/summons requiring respondent to file written answer within ten (10)
working days lrom receipt of notice/summons. The Adjudication Officer may
require the submission of Position Papers as it may be deemed necessary.

1.4 The concerned DTI Adjudication Officer, after a full investigation/hearing shall
have been made shall issue a decision and findings not later than thirty (30) days
from receipt of the verified complaint or formal charge.

1.5 ln case of an appeal from the decision of the AdJudication Officer, the rules
provided under Department Administrative Order No. 07. Series of 2006
(lnstitutionalizing the Simplified and Uniform Rules of Procedure for
Administrative Cases Filed with the Depaftment of Trade and lndustry (DTl) for
Violations of the Consumer Act of the Philippines and Other Trade and lndustry
Laws) shall also be observed

!
DEqAR:MENT ADMINI'TRATNE oRDER No. 16 -03
Serie-s of 201 6

NPLEMENTNG RULES AND REGUIANONS OF REPUBUC ACT NO. 10909, "NO SHORTCHANGING ACT
oF 2016"

Nothing herein shall be construed to limit or impair the rights and remedies ol a
consumer under any other !aw.

Rule Vll
Penalties

Section 1. Fines and Penalties. - Molations of this Act and its lRR, shall, upon notice
and hearing, be subjecl to the following fines and penalties:

1.1 First Offense: P500.00 or three percent (3%) of the gross sales of the business
establishment on the day of the violation. whichever is higher;

1.2 Second Offense: P5,000.00 or five percent (5%) of the gross sales of the
business establishment on the day ofthe violation, whichever is higher;

1.3 Third Offense: P15,000.00 or seven percent (70lo) of the gross sales ol the
business establishment on the day of the violation, whichever is higher, and the
license to operate of the business establishment shall, upon the recommendation
of the DTl, be suspended for three (3) months by the appropriate government
agency;

1.4 Fourth Offense: P25,000.00 or ten percent (10%) of the gross sales of the
business establishment on the day of the violation, whichever is higher, and the
license to operate of the business establishment shall, upon the recommendation
of the DTl, be revoked by the appropriate government agency.

For purposes of this Section, the gross sales of the particular branch where the
shortchange was committed shall be the basis for computing the imposable penalty.

With regards to complaints against GOCCs and government enlities exercising

proprietary functions, the concerned government officials and employees shall be
accountable for violation of this Act without prejudice to the flling of anti{rafi and/or
criminal case against them.

Section 2. Shodchange Amaunt. - ln addrtion to the amount of the fine mentioned

above, the total amount of change the establishment failed or refused to give, as
determined from the audil of DTl, shall be paid by the said establishment to the
complainant.

Rule Vlll
Other Provisions

Section 1. Separability Clause. - ln the event that any provision of this Order is declared
unconstitutional. the validity of the other provisions shall not be affected by such
declaration.

Section 2. Repealing C/ause. - All laws, decrees, executive orders, isguances, rules and
regulations or parts thereof which are inconsistent with the provisions of this Acl are
hereby repealed, amended or modified accordingly.
DEPARTNENT ADMINISTRATIyE ORDER NO. i6 -O3
Series of 2O1G
TMPLEMENT,NG RULES AArO REGUL/qrOflS OF 4EPUBUC ACT NO, 1O9O9, "NO SHORTCHAiVGTIVG ACr
oF 2018"

Section 3. Effectivity. - This IRR shall take effect immediately after its publication in the
Official Gazefte or in al least two (2) newspapers of general circulation, whichever
comes first, and copy thereof furnished the Office of the National Administralive Register
at the UP Law Center, University of the Philippines, Diliman, Quezon City.

lssued thiscr/f day of December 2016 in Makati Cily, Philippines.

Approved

Secretary of and lndustry

by:

Atty. c.
U
Consumer Protection Group
Oepartment of Trade and lndustry