Retailers need to know what rights consumers have when they purchase from their online or physical stores
Mr Chopra, the owner, of the online electronics store ”Electronic Bazaar” has been sent a strong message that it is unacceptable for a retailer to fail to give consumers a refund, repair or replacement product for faulty goods sold. The Federal Court has ordered Mr Chopra to pay penalties of $100,000 for breaching the Australian Consumer Law, to pay the ACCC’s costs and to undertake consumer protection compliance training.
The imposition of such a large penalty on a sole trader shows that the Courts take consumer rights very seriously.
Mr Chopra was found guilty of making false or misleading representations, including that consumers were not entitled to a refund, repair or replacement for faulty goods if :
– an express warranty had expired;
– the goods were not in their original packaging;
– the goods had been used; or
– a complaint was not made in a certain time period.
He also falsely represented that 2 non existed companies were responsible for any remedies, and failed to supply goods within a reasonable time after they had been paid for.
If a product is faulty, retailers cannot refuse to give consumers a refund, repair or replacement product
Some important general points:
– Any express warranty or extended warranty is in addition to the consumer guarantees imposed by the law and is irrelevant to the consumer’s rights to a remedy for faulty goods.
– The consumer does not need to return the goods in the original packaging.
– The consumer does need to have some form of proof of purchase but this does not have to be the original receipt, it can be a credit card or bank statement. Some businesses keep records.
– There is no fixed time for making a complaint about faulty goods, this will depend on the circumstances.
– If the problem is major, such that a consumer would not have bought the product if they had known about the fault, the consumer can choose between a refund, repair or replacement.
– If it’s not a major problem, the retailer can choose whether to repair or replace the product or give a refund.
– Goods must be safe, have no faults, look acceptable and do what is expected of them or what the customer is told they will do.
– The goods must match the description, demonstration model or any sample the business gives.
– If your advertising or salespeople make promises about the goods, the goods need to live up to these promises.
– Your business does not have an obligation if the consumer has caused the problem though misusing the goods or failing to follow instructions.
– Consumers have similar rights in respect to services.
Training and communication
Ensuring that employees who communicate directly and indirectly with customers know the company’s, and their own, obligations to consumers, is vital. This means sales staff, customer relations staff and marketing people, from within and outside the company.
Developing and communicating clear policies and effective procedures is the first step to managing the risks of your company being penalised up to $1.1 million dollars and you or your employees up to $220,000. These will be aided by providing regular practical training in the areas of the Australian Consumer Law that are relevant to particular employees’ roles and the conversations they have with customers.