Australian Consumer Law: Statutory Warranties & Consumer Guarantees - Returns, Refunds & Replacements

tonester on 19/10/2013 - 18:27

All new products - including replacements - should be of acceptable quality and fit for any disclosed purpose

ACCC advice for businesses:

Businesses that sell goods guarantee that those goods:

  • are of acceptable quality - the goods must be safe, lasting, have no faults, look acceptable and do all the things someone would normally expect them to do

  • are fit for any purpose that the consumer made known to the business before buying (either expressly or by implication), or the purpose for which the business said it would be fit for

ACCC advice for consumers:

Products must be of acceptable quality, that is:

  • safe, lasting, with no faults
  • look acceptable
  • do all the things someone would normally expect them to do.

Products must also:

  • be fit for the purpose the business told you it would be fit for and for any purpose that you made known to the business before purchasing

Section 54(2) of the ACL states the guarantee as to acceptable quality:

(2) Goods are of acceptable quality if they are as:

(a) fit for all the purposes for which goods of that kind are commonly supplied; and

(b) acceptable in appearance and finish; and

(c) free from defects; and

(d) safe; and

(e) durable;

Section 55(1) of the ACL states the guarantee as to fitness for any disclosed purpose:

there is a guarantee that the goods are reasonably fit for any disclosed purpose, and for any purpose for which the supplier represents that they are reasonably fit.

Major failures

ACCC advice for businesses:

A purchased item has a major problem when it:

  • has a problem that would have stopped someone from buying the item if they had known about it
  • is unsafe
  • is significantly different from the sample or description
  • doesn’t do what you said it would, or what the consumer asked for and can’t easily be fixed.

ACCC advice for consumers:

A product or good has a major problem when:

  • it has a problem that would have stopped someone from buying it if they’d known about it
  • it is unsafe
  • it is significantly different from the sample or description
  • it doesn’t do what the business said it would, or what you asked for and can’t easily be fixed.

Section 260 of the ACL states when a failure to comply with a guarantee is a major failure:

(a) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or

(b) the goods depart in one or more significant respects:

(i) if they were supplied by description—from that description; or

(ii) if they were supplied by reference to a sample or demonstration model—from that sample or demonstration model; or

(c) the goods are substantially unfit for a purpose for which goods of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or

(d) the goods are unfit for a disclosed purpose that was made known to:

(i) the supplier of the goods; or

(ii) a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made;

and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or

(e) the goods are not of acceptable quality because they are unsafe.

Choice of Refund or Replacement

ACCC advice for businesses:

If the problem is major or cannot be fixed, the consumer can choose to:

  • reject the goods and obtain a full refund or replacement, or
  • keep the goods and seek compensation for the reduction in value of the goods.

The seller cannot refuse to provide a remedy if the product is not returned in its original packaging.

ACCC advice for consumers:

You can ask for a replacement or refund if the problem with the product is major.

Replaced products must be of an identical type to the product originally supplied. Refunds should be the same amount you have already paid, provided in the same form as your original payment.

You are responsible for returning the product, unless the cost of doing so is significant. In this case, the business must organise and pay for the return or exchange.

You do not have to return products in the original packaging in order to get a refund.

Section 259(3) of the ACL states the right of action against suppliers of goods:

(3) If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may:

(a) subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection; or

(b) by action against the supplier, recover compensation for any reduction in the value of the goods below the price paid or payable by the consumer for the goods.

Section 263 of the ACL states the consequences of rejecting goods:

(2) The consumer must return the goods to the supplier unless:

(a) the goods have already been returned to, or retrieved by, the supplier; or

(b) the goods cannot be returned, removed or transported without significant cost to the consumer because of:

(i) the nature of the failure to comply with the guarantee to which the rejection relates; or

(ii) the size or height, or method of attachment, of the goods.

(3) If subsection (2)(b) applies, the supplier must, within a reasonable time, collect the goods at the supplier's expense.

(4) The supplier must, in accordance with an election made by the consumer:

(a) refund:

(i) any money paid by the consumer for the goods; and

(ii) an amount that is equal to the value of any other consideration provided by the consumer for the goods; or

(b) replace the rejected goods with goods of the same type, and of similar value, if such goods are reasonably available to the supplier.

Any explicitly expressed warranty period is the minimum duration that a product should last - its useful working life - to be of acceptable quality as per consumer guarantees.

As such, regardless of any explicitly expressed warranty conditions, one could receive multiple free replacements due to repeated major failures under consumer guarantees.

References

ACCC advice for businesses: Consumers' rights & obligations

ACCC advice for consumers: Consumer guarantees

Australian Consumer Law (Competition and Consumer Act 2010, Schedule 2)

Past topic:

The retailer can’t refuse to help you by sending you to the manufacturer or importer.

General Discussion Returns

Comments

  • lakers1222 on 19/10/2013 - 19:05

    Harvery Norman should be listed under Major Failure

    http://www.ozbargain.com.au/node/119315
    http://www.ozbargain.com.au/node/114835

    I have a similar story Harvey Norman 84 ORiordan St Alexandria (NSW) also refused to refund a faulty iPad. The iPad was only couple months old and I had the receipt showing proof of purchase at that same store. Even though the manager (Fadi Clear) acknowledged that it was faulty (Screen burn-in) he refused to refund it on grounds that 'I can't tell if it has been jailbroken or not and if it has been jailbroken that the warranty is gone'. He said come back on Monday when they have a technician (Edward, if I remember correctly) on side and I will get a refund when the iPad has been verified not to be jailbroken.

    Come Monday, I returned to the store and asked for a refund. The technician verified the iPad had not been jalibroken but I was still refused the refund. The said that I needed to get an Apple Genius to verify that it has a 'major fault' in order for Apple to issue a refund. Just wondering, if Harvey Norman and Apple followed the law, who should be issuing my refund ?

    Earlier that week I had already visited the Apple Store on George Street (NSW). They acknowledge their was a problem and were happy to swap it straight away. They brought out an iPad from one of the drawers and I noticed that it wasn't in a box so I questioned 'Is the replacement iPad new ?' to which the apple genius answered it was 'refurbished'. I refused to take the refurbished model as I expected a brand new replacement if my iPad became faulty under the warranty period. Am I expecting too much ?

    I would love to hear other peoples comments to what I they would have done after being bullied by these two stores. Yes, I'm naming the stores which pushed me around. They shouldn't get away with what they've done.

    • endotherm on 19/10/2013 - 22:05

      ACCC advice for consumers:
      You can ask for a replacement or refund if the problem with the product is major.

      • Ask for a refund.
      • Go to another store and purchase a brand new one.
    • Moots on 19/10/2013 - 22:22
      +1

      I do not purchase anything from HN ever. They are ridiculously overpriced, and poor customer service.

  • Baghern on 19/10/2013 - 23:14

    Do you have the exact line regarding warranty, ie the 2 years part. That companies like Apple pretend isn't there

    • endotherm on 20/10/2013 - 00:33
      +1

      It's a bit messy, but I'm pretty sure it is contained under Competition and Consumer Act 2010, Section 262 (2). It boils down to what is reasonable to expect the goods to be defect-free and fit for purpose. There is no actual wording like "2 years" etc. If you buy a no-name TV for $200, I would expect it would not last as long as an equivalent name-brand TV that cost $2000. I'd suggest a reasonable time would be say1-2 years for a cheap piece of crap versus 3-7 years for a high-end unit. It all comes down to how long a reasonable person would expect it to take for the goods to reveal any defects, which if you saw them at the beginning of its life, you would have rejected it and not bought it. I'm showing my age here, but I remember my previous TV of 25 years (a good one!), I didn't think it was unreasonable for it to last for 7 years before it suffered a burnt out diode and bad capacitor (which a technician actually fixed by re-soldering in new components) and which happily performed for the remainder of its life (it still works by the way).

      Section 262
      When consumers are not entitled to reject goods
      (1) A consumer is not entitled, under section 259, to notify a supplier of goods that the consumer rejects the goods if:
      (a) the rejection period for the goods has ended; or
      (b) the goods have been lost, destroyed or disposed of by the consumer; or
      (c) the goods were damaged after being delivered to the consumer for reasons not related to their state or condition at the time of supply; or
      (d) the goods have been attached to, or incorporated in, any real or personal property and they cannot be detached or isolated without damaging them.

      (2) The rejection period for goods is the period from the time of the supply of the goods to the consumer within which it would be reasonable to expect the relevant failure to comply with a guarantee referred to in section 259(1)(b) to become apparent having regard to:
      (a) the type of goods; and
      (b) the use to which a consumer is likely to put them; and
      (c) the length of time for which it is reasonable for them to be used; and
      (d) the amount of use to which it is reasonable for them to be put before such a failure becomes apparent.

  • iSamurai on 20/10/2013 - 20:53

    Thanks for posting this!

    I got ripped off at Target once when their non stick frying pan (there seems to be quite a number of posts on frying pans lately) began to lose its coating and anything you cook on it sticks to it.

    I returned it one day at the store and the staff refused to make a refund. I had a bank statement to prove my purchase (afaik this is proof of purchase?) - and they even managed to dig out from their system the exact copy of the receipt.

    I was offered a store coupon to the value of what the pan is selling for that day, not what I had originally pay for. I thought this is an insane "refund" policy! Wrote to Target customer care but never heard back.

    Oh well.

    • endotherm on 21/10/2013 - 00:07

      As long as you remember the current Act has only been in force for a couple (or maybe 3) years. Consumer rights were much different beforehand.

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