Know Your Consumer Rights – Refunds, Repairs and Replacements

Gift giving season is nearly upon us. This generally happy time will be closely followed by gift returning season. If you find yourself in this position, it’s useful to be aware of your consumer rights.  

The latter is not universally enjoyed by retailers who will be required to deal with thousands of (sometimes grumpy) customers seeking an exchange or refund on an unloved, ill-fitting or even faulty gift from a well-intentioned relative. 

We all know of people who have purchased goods, changed their minds, then returned them to the retailer the next day, seeking a refund of the purchase price, an exchange or even a credit note to “shop it off” later.  

As a general rule in Australia, provided the goods aren’t faulty, the “return policy” is very much a matter for the discretion of the relevant retailer. If you have any doubts about a particular case, we recommend that you should consult  your state/territory fair trading or consumer affairs regulator. 

Some retailers, usually large chains or department stores, have generous return policies (perhaps not so much on sale goods). Others do not, especially owner-operated businesses without the cashflow advantages of larger operations. 

Choose carefully 

So when you see a sign displayed on a retailer’s wall that says “Choose carefully….we don’t refund if you change your mind”, they usually mean it. Any variation on that policy is a matter for the goodwill of the retailer on the day you return the goods. Therefore, it’s up to you to understand the retailer’s return policy at the time you hand over your hard earned money; or hope that the retailer is feeling generous when your unloved Christmas gift is returned. 

Faulty Goods 

It’s quite different if the goods are faulty. In that situation, you have specific rights, known as consumer guarantees which apply whether the goods are full price, discounted or online.  

We often hear stories of claims with respect to faulty goods being made by consumers only a short time after the expiration of a warranty, only to be told by a retailer or manufacturer that it’s too late because the warranty has expired. Many people are not aware that the expiration of these so called “factory warranties” is not necessarily the end of their right to seek redress. 

Major Faults 

We stress that we’re not talking here about people who take goods home, change their minds and seek a refund. Rather, we’re referring to goods that are claimed to be faulty. In general terms, where there is a “major fault” (as defined) the consumer is entitled to choose a repair, a refund or a replacement. Note that it’s the consumer’s choice, not the retailer’s or manufacturer’s choice.  

As you might imagine, defining a “major fault” is sometimes controversial. It tends to become harder as the value and age of the product increases. For example, a “major fault” in a $60,000 three-year-old motor vehicle could have serious financial consequences for both parties, so it would not be surprising if a car dealer or manufacturer suggested that a “major fault” wasn’t major at all and insisted upon a repair or claimed that the fault was caused by the owner’s abuse of the vehicle. 

The Full Story 

Nevertheless, whatever the circumstances, the main point here is that your rights as a consumer are considerable and will often go beyond most carefully worded, time-limited factory warranties or guarantees. 

You can read further explanations and details of Australian consumer rights and guarantees at accc.gov.au. 

A Case Study 

A member of the ADF recently told us about a conversation she had with a retailer who sold her a new vacuum cleaner. The product came with a two year factory warranty. Two years and one month after the purchase, the motor in the vacuum cleaner burned out. 

She approached the retailer and was told that because the factory warranty had expired, she had no recourse. They offered to repair or replace the motor, but at considerable cost. After some pushback and as a sign of “goodwill” to a “valued customer”, they offered to give her a special discount of 50% off the normal cost of repair. 
 
That sounds fair and reasonable, doesn’t it? Perhaps it does to consumers who don’t know their rights. Fortunately, our member knew that where a product has a “major fault”, such as in this case, she had consumer rights well beyond a mere two year factory warranty. Those consumer rights include replacement, repair or refund at the discretion of the consumer. As a result, she received a new vacuum cleaner from the retailer. 

We know from the Australian Competition and Consumer Commission (ACCC) that there are many cases each year in which consumers lose significant amounts of money by accepting the line from sellers that nothing can be done because the factory warranty has expired. The reported cases are likely to be “the tip of the iceberg”. 

Given the story recounted to us by this member and the positive outcome she achieved through her knowledge of the law, we cannot stress enough the importance of consumers understanding their rights and the obligations of the sellers with whom they deal. If you have any questions on this topic, please contact us via our website.