What if the consumer has done something that damaged the goods – should I have to pay to fix this?
Consumers have certain obligations in relation to the products they purchase. For example, consumers are not entitled to a remedy if they have been careless with the good or caused the damage themselves. Consumers also may not be entitled to a remedy if they have used the good abnormally or the damage was caused by someone other than the supplier or manufacturer, for example, a third party who installed the goods.
What if the consumer changes their mind? Do I have to give them a refund?
No. The consumer guarantees do not require you to give a remedy if the consumer changes their mind and decides that they don’t like or need the good or discovers that the good is cheaper elsewhere.
If a good has some kind of defect you can sell it if you explain the problem to the consumer before they purchase the good. You can do this by verbally explaining the problem to the consumer or by placing a written notice with the goods outlining the nature and extent of the problem. If there is another problem with the goods then you may be required to give a remedy for this.
Simply placing a sign or notice saying ‘seconds’ ‘sold as is’ or ‘faulty’ may not be sufficient if a consumer would not be able to establish the nature and extent of the problem simply by looking at the goods.
The manufacturer is in a much better position to determine what is wrong with goods and how the problem should be remedied. Can’t I ask the consumer to deal with them directly?
No. Consumers are free to seek a remedy from the supplier or the manufacturer. You may send the good to the manufacturer for diagnosis or repair, but you cannot require consumers to deal with the manufacturer directly. Remember that when you must provide a remedy to the consumer within a reasonable time so you should have procedures in place to follow up on goods that are sent away for diagnosis or repair. Also, if you find that there is a major problem with a good, or a problem that cannot be easily fixed, you should advise the consumer of this and allow them to choose their preferred remedy.
The consumer guarantees are not limited to a set time period. Instead, they last for the amount of time that is reasonable to expect given the cost and quality of the item or any representations made about the item.
This means that a consumer may be entitled to a remedy after any voluntary or extended warranty has expired.
For example, a car would be expected to last longer than a television, and a television would be expected to last longer than an inexpensive toy. A more expensive fridge would also be expected to last longer than an inexpensive fridge.
My goods are sold at auction, do the consumer guarantees apply?
Only the consumer guarantees relating to title, undisturbed possession and undisclosed securities and charges apply to goods purchased at a traditional auction conducted by an agent of the person selling the goods.
If you sell goods using an online auction website you may be required to abide by the consumer guarantees as these websites do not generally act as an agent for the person selling the goods.
A customer is asking for a remedy but does not have their receipt? Can I refuse to provide a remedy in these circumstances?
Not necessarily. You are able to require a consumer to provide proof of purchase but a receipt is not the only valid proof of purchase. For example, a credit card statement, lay-by agreement or a stamped and dated warranty card showing where the good was purchased may be valid, alternative ways to show where the good was purchased.
Do I have to pay for the consumer to return the good to me?
The consumer guarantees require a consumer to return goods to the place where they were purchased unless it is not reasonable to require them to do so. For example, it would be reasonable to expect a consumer to return an item if they were able to easily take it away with them when they purchased it. However, if the item is large, heavy or bulky or needed to be delivered, the seller should arrange for this to be returned.
Who gets to choose the remedy that a consumer is entitled to – the business or the consumer?
This depends on how serious the problem with the good or service is. If the problem is major or cannot be remedied within a reasonable time, the consumer is entitled to choose whether they would prefer a full refund or a refund of the difference between the price paid and the actual value of the good/service (with the problem). If the problem is minor and can be easily remedied, the supplier is entitled to choose whether they should give a refund or repair/replace goods or fix the problem with the services.
Do I have to provide a cash refund or can I give credit to spend in my store?
If a consumer guarantee has not been complied with the consumer is entitled to a particular kind of remedy—repair, replacement, refund, compensation for any drop in value. If you choose to provide a refund or a consumer demands a refund this should be in the same form as the consumer’s original payment. For example, if the consumer paid in cash, the refund should be paid in cash. Alternatively, if the consumer paid using a credit card this amount should be paid onto the consumer’s credit card.
Are there any exceptions to the consumer guarantees?
The guarantee that services will be fit for a specified purpose or achieve a particular result, does not apply to professional services provided by a qualified architect or engineer.
The consumer guarantees also do not apply to financial products and services.
Businesses that sell sporting and recreational services may be entitled to limit their liability for death or personal injury in relation to the consumer guarantees relating to services. These businesses cannot limit their liability in relation to property damage. You should always seek legal advice before attempting to limit your liability in any way.
Can I still offer voluntary and extended warranties?
Sellers and manufacturers can make extra promises about their goods and services but it is important to remember that these are in addition to the consumer guarantees and cannot be used to avoid your liability.
It is important to ensure that your voluntary and/or extended warranty does not mislead a consumer into thinking that this is the extent of their rights, and once the voluntary or extended warranty period is over they no longer have a right to a remedy.
What is ‘consequential loss’ and when will I have to pay damages for this?
Consequential losses are costs to a consumer because something went wrong with the goods or services. A business is required to compensate a consumer for any consequential losses that are reasonably foreseeable.
For example, if a faulty oven causes a fire in the consumer’s kitchen, the costs of repairing the kitchen will be reasonably foreseeable.
The consumer is entitled to take further action if they are unhappy with the remedy that you offer and ultimately, it may be up to the courts to decide what a consumer is entitled to.
