If you sell a customer a product that fails to meet one or more of the consumer guarantees, they are entitled to a remedy – either a repair, replacement or refund and compensation for any consequential loss – depending on the circumstances.
If a consumer guarantee isn't met and the problem is major, the consumer can choose whether they want a refund, or if they are happy to accept a repair or replacement. Whether a problem is major depends on the circumstances of each case.
If the problem isn't major, the business can choose whether to remedy the problem with a repair, replacement or refund. They must do so within a reasonable time.
Consumers are also entitled to recover damages for any reasonably foreseeable loss or damage they suffer as a result of the breach, provided this wasn't caused by something independent of human control.
It is unlawful for a supplier or manufacturer (verbally or in writing) to make a false or misleading representation about:
- the existence or content of a consumer guarantee
- the rights and remedies consumers have under such a guarantee.
Penalties (up to the greater of $10 million, 3 times the value of the benefit received, or where the benefit cannot be calculated, 10% of annual turnover in the preceding 12 months for corporations and $500,000 for individuals) can be imposed for representations of this kind.
Consumer guarantee rights cannot be excluded, restricted or modified.
Example: A notice in a retail shop saying that it has a 'No refund policy' is unlawful. This is because the store must give a refund if there is a major failure to comply with a consumer guarantee.