Published: 5 July 2013

Summary: This video looks at a number of scenarios where a seller may be required to provide a remedy to a consumer – test your knowledge about what the law requires your business to do.


FEMALE PRESENTER: It doesn’t matter what goods you sell – food and drinks, clothing, electrical goods, furniture, cars – the consumer guarantees apply and you must understand what to do if one of your customers has a problem with something they buy from you.

Of course, the consumer guarantees do not give an automatic right to a remedy. Consumers are not entitled to a remedy if they have misused a good, simply changed their mind, or the good has lasted for a reasonable period of time.

But if goods are not of an acceptable quality, don’t do what they’re supposed to do, or don’t match the description given, demonstration model or sample shown – then the consumer is entitled to a remedy, and failure to provide a remedy may lead to legal action being taken against your business.

Also, if you misrepresent consumers’ rights, this could have serious consequences for you and your employer.

So let’s look at some of the myths – and commonly asked questions – about consumer guarantees.

MALE CUSTOMER: I bought this camera from you yesterday and now the screen doesn’t seem to work.

FEMALE SHOP OWNER: Oh, okay. Let me just double-check the battery. But if there is a problems would you like a replacement camera or a refund?

FEMALE CUSTOMER: Hi, you sold me this phone last month – I explained that I needed it to work in Europe, I took it on my holiday and found it wasn’t compatible for Europe and had to buy another one – can I have a refund?

MALE SHOP ASSISTANT: I must’ve given you the wrong one. I’ll just check with my manager but I’m sure we can give you a refund.

FEMALE CUSTOMER: I bought this dress a few weeks ago. It doesn’t fit, can I have a refund or get a different size?

MALE SHOP OWNER: Unfortunately we don’t a refund or exchanges just for a simple change of mind.

MALE PRESENTER: What about one of the most familiar palm-offs a consumer receives:

MALE SHOP OWNER: I’m sorry, I can’t take it back because it’s not in its original packaging. You’ll find that our terms expressly state that goods returned must be in their original packaging.

FEMALE PRESENTER: Does this trader have the law on their side? Can you refuse to honour a guarantee if goods are not returned in their original packaging?

Well, it doesn’t matter what the seller’s “terms” say, the consumer’s course of action is unaffected by whether the packaging exists or has been completely destroyed. What about:

MALE SHOP OWNER: Sorry, no exchange without receipt.

FEMALE PRESENTER: Can you refuse a claim if there is no receipt? Well you can if the consumer cannot prove that they purchased the good from you – but you must honour valid, alternative proofs. For example the receipt may be unavailable but a credit card statement or lay by agreement may be accepted in lieu of a receipt.

FEMALE CUSTOMER: I’ve actually got this warranty card stamped by your store. It shows the date I bought it from you.

MALE SHOP OWNER: Right, fair enough.

FEMALE PRESENTER: And have you ever heard, or said:

FEMALE SHOP OWNER: No, sorry, you’re going to have to send that back to the manufacturer.

FEMALE PRESENTER: True? Well, of course it’s true that goods can be returned to the manufacturer and, in fact, the manufacturer often fixes the goods for the consumer, but even where the problem is a manufacturing fault, suppliers must still provide a remedy to the consumer – and then deal with the manufacturer themselves.

MALE CUSTOMER: Can’t you organise that for me?

FEMALE SHOP OWNER: No, you have to do it yourself.

FEMALE PRESENTER: Is that true? Actually, it’s not.

If your customer wants you to organise the remedy, then you have to do it. Frequently, failure to provide a satisfactory remedy arises because of ignorance or misunderstanding about, the law.

If you’re not sure, ask. Ask your manager or supervisor. Or get the information from the contacts given at the end of this program.

FEMALE SHOP ASSISTANT: Oh sorry – the sign says no refunds or exchanges after 14 days.

MALE PRESENTER: Can businesses rely on signs like this? No. If a consumer guarantee hasn’t been complied with then the consumer is entitled to a remedy.

Signs like this are also likely to breach the Australian Consumer Law as they mislead consumers about their rights.


AUCTIONEER: I’m sorry, it’s buyer beware. You bought that at the auction and there’s no guarantee for auction goods.

FEMALE PRESENTER: True? Well, goods sold at a traditional auction, where an auctioneer acts on behalf of the seller, will have certain guarantees with regards to title, undisclosed securities and so on but the other consumer guarantees do not apply to goods sold at auction.

Other exclusions include services provided under a contract relating to the transport or storage of goods for business purposes, or to services supplied under an insurance contract.

MALE PRESENTER: Sometimes it’s not easy to determine whether there has been a problem with a consumer guarantee, or if the problem is due to ordinary wear and tear.

MALE CUSTOMER: I bought this about a year ago. I haven’t used it very often but the speakers aren’t as loud as they used to be.

FEMALE SHOP ASSISTANT: Unfortunately, we can't actually test that in-store but I can send it to the manufacturer and get them to assess the problem and I’ll call you when I get their report?

FEMALE PRESENTER: Another contentious issue may be the type of remedy that a consumer is entitled to. If there is a major problem with the goods then the consumer is entitled to demand a refund. If the problem isn’t major then the seller may choose to repair or replace the goods.

Many consumers will be happy with a repair or replacement but some may demand a refund.

If you are unsure about whether or not the consumer is entitled to a refund, the best thing to do is ask your supervisor or manager for assistance.

This is not only good customer service, but will help to ensure that the consumer’s rights are upheld.