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Fri, 8 Sep 2017


For businesses selling products/services to consumers and consumers purchasing goods or services, it is important to be aware of the Australian Consumer Law, and the rights and options available to consumers under the prescribed Consumer Guarantees.

While the scope of the Australian Consumer Law is wide, and inherently complex, there are a number of basic ‘Consumer guarantees’ which are available for Australian consumers who obtain goods and/or services from Australian suppliers, importers or manufacturers, and there have been attempts to summarise them into layman’s terms to assist consumers and business owners with understanding their rights and obligations.  However, even the basic versions can become quite confusing, and of course each particular circumstance will need to be considered on its own facts to determine what, if any, consumer guarantees are available in any particular case.

Generally speaking, any business which is selling, hiring or leasing products or services under $40,000 (or over $40,000 if the product/service is normally bought for personal household use) will need to provide guarantees for those items, regardless of any other warranties or guarantees that are given or sold to the consumer alongside the product/service.

In relation to products, they must generally be of ‘acceptable quality’, which is usually determined by considering the quality one would assume would be expected of the product taking into account the type of product and the cost of the product.  Products being sold must also be designed to be safe, durable, suffer from no deficit in quality and do all of the things that one would expect such a product to do.

There are also a range of other factors which can be considered including any representations made about the product by the salesperson, the product must match any descriptions made in the packaging or advertising of the product and the product must also be fit for the purpose it was purchased for.  In addition, the product must come with free title, no hidden debts or extra charges and spare parts and repair facilities should be made available for a reasonable time after the purchase of the product unless it was made known to the purchaser that they would be unavailable at the time of purchase.

In a similar vein, if a service is provided to a consumer the service must be provided with an acceptable level of technical knowledge as well as satisfactory care and skill and all reasonable steps should be taken to avoid any loss and damage.  Further, the service must be fit for its purpose or provide the consumer with the results that the consumer and the service provider agreed to, and the service should be provided within the time frame agreed between the parties, or within a reasonable time frame if there was no agreed time period.

The consumer guarantees can also apply to products and service bundles (such as telephone service contracts with a handset included), gifts, online products and services purchase from Australian businesses and second-hand products purchased from a business (taking into account the age/condition of the product).  They also apply to ‘sale’ items, despite there being many retailers who attempt to exclude sale items from claims for a refund.

Giant activewear company Lululemon were recently slapped with three infringement notices issued by the Australian Competition and Consumer Commission (ACCC) and were ordered to pay $32,400 in penalties as a result of alleged false or misleading representations to their consumers regarding their consumer rights.

The use of wording on their website sales and terms/conditions pages such as “We made a little extra – don’t be shy, help yourself. Its yours for keeps so no returns and no exchanges” and “Final sale items like underwear, water bottles + We Made Too Much gear are yours for keeps” were considered by the ACCC to be representing to customers that they were not entitled to a refund or replacement of products under any circumstances, when in fact consumers are automatically entitled to a remedy under the consumer guarantees if they satisfy the relevant requirement, regardless of whether they were purchased on ‘sale’.  Lululemon also replied to a customer querying a refund for faulty goods with “we do not offer refunds for quality affected garments” - in clear breach of the consumer guarantees.

There are exceptions to the consumer guarantees which can also apply in certain circumstances, including change of mind, misuse of the product and if the consumer was informed of the fault prior to purchasing same.

There are also different avenues that can be taken which are dependent on the   

This is a timely reminder to businesses to ensure that your business is complying with consumer guarantees and the Australian Consumer Law, and in particular making sure that any refund or returns policies published on business websites accurately reflect consumer rights.

The Australian Competition and Consumer Commission has published the following PDF if you are interested in some further reading on this topic:


As always, if you have any legal queries or require assistance from experienced and professional lawyers in relation to your business terms and conditions or refund and returns policies, please feel free to contact our Gold Coast office today on 07 5563 8970.

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