KNOWING YOUR CONSUMER RIGHTS – MOST PEOPLE DON’T

Black Friday, Cyber Monday, followed by Christmas and New Year sales are almost upon us. For retailers in Australia, this short period of trading commencing at the end of November is expected to be a financial bonanza.

However, this generally happy season for seekers of bargains and retail therapy also features thousands of (sometimes grumpy) customers seeking an exchange or refund, often on an unloved, ill-fitting or even faulty impulse purchase or gift from a well-intentioned relative. If you find yourself in this position, it’s important to be aware of your consumer rights.

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. Generally 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 purchase 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 expect, 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 $50,000 motor vehicle could have serious financial consequences for both parties, so it would not be surprising if a car dealer 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 lengthy dispute he had with a car dealer who sold him a new vehicle. The vehicle came with a four-year factory warranty. Four years and six months later (the vehicle having been carefully serviced throughout its life), the engine suffered a catastrophic failure due to a faulty bearing.

He approached the dealer and was told that because the factory warranty had expired, he had no recourse. The dealer offered to repair or replace the engine, but at considerable cost. After some pushback and as a sign of “goodwill” to a “valued customer”, the dealer offered to give him a 25% discount 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, he had consumer rights well beyond a mere four-year factory warranty. Those consumer rights include replacement, repair or refund at the discretion of the consumer. As a result, our member eventually received a new vehicle from the dealer, but only after lengthy, persistent and unpleasant conversations and correspondence.

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”.

Know your Rights

Given the story recounted to us by this member and the positive outcome achieved through his 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.

Then, whether it’s a Black Friday impulse purchase on which you’re suffering buyer’s remorse, an ill-fitting unloved Christmas gift, a dodgy kitchen appliance from the 2025 new year’s sale that you believed was a bargain, or the car of your dreams that’s become a nightmare, you’ll be confident about getting a result that takes proper account of your best interests.