Homewares and furniture retailer IKEA*, operated under a franchise system by Aust Scan Pty Ltd in Brisbane, Melbourne and Sydney, will alter its sales receipts and signs referring to its 'No-nonsense Returns Policy' after talks with the Australian Competition and Consumer Commission.
"The ACCC was concerned that representations on some IKEA sales receipts and signage in or near store locations in Melbourne, Brisbane and Sydney may have been potentially misleading under the Trade Practices Act 1974", ACCC Chairman, Professor Allan Fels, said today.
"They represented that for consumers to obtain a refund or exchange:
- there was a 30-day time restriction; and/or
- items must be in original condition/ packaging with receipt.
"The ACCC notes that these representations were not intended to provide consumers with a complete statement of their rights under consumer law and that IKEA's 'change of mind' refund policy is quite generous and more than required under the law.
"However, the Act prohibits companies from making false or misleading representations or engaging in misleading or deceptive conduct. The ACCC believes that the representations may have inadvertently misled consumers about the circumstances under which they could get a refund. Under the Act, consumers are entitled to a refund for goods that:
- are faulty or defective;
- the seller did not have the right to sell;
- are not fit for the purpose for which they were sold; or
- do not match the description or sample provided.
"The Act does not set a specific time in terms of days or months within which consumers may return goods, nor does it specify that items must be in original condition/packaging".
After discussions with the ACCC, Aust Scan Pty Ltd agreed to alter its sales receipts and signage to clarify that the time and packaging restrictions only apply to 'change of mind ' refunds. Aust Scan Pty agreed to implement further extensive and ongoing training to ensure that its staff are fully aware of consumers' statutory rights to a refund.
Aust Scan Pty Ltd is to be commended for its co-operative approach and rapid response in working with the ACCC to resolve this matter for consumers' benefit.
"The ACCC has taken action in the past to protect consumers against misleading or deceptive conduct in relation to refunds, and it will continue to do so where warranted.
"In July 2000, Dimmeys Stores Pty Ltd provided the ACCC with court-enforceable undertakings after concerns were raised about potentially misleading refund signs in Townsville, North Queensland.
"During the busy Christmas shopping period, this action serves as a timely reminder to business and consumers. Consumer goods should be free from defects and faults, fit for the purpose for which they are sold, of merchantable quality, and match any description or sample in order to conform with the statutory warranties under the Act. If they do not meet these requirements, the consumer is entitled to compensation".
Further information regarding statutory rights of consumers is available in the ACCC publication Warranties & Refunds, which is available at all ACCC offices or from the ACCC web-site: www.accc.gov.au.
*Note to Editors: Western Australian-based IKEA outlets are not operated by Aust Scan Pty Ltd and were not the subject of this move.