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How to say no to ‘no refunds’

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The ultimate legal guide to Christmas consumer rights

Published on

Leading consumer law firm Slater and Gordon has released the ultimate guide to Christmas consumer rights, to help Australians avoid being caught out by the Grinch this holiday season.

Consumer protections and illegal practices

Unnecessary extended warranties, guaranteed deliveries that do not arrive in time and inaccurate ‘no refunds’ signs are some of the most common consumer roadblocks.

Slater and Gordon Lawyer Diana Young said many people do not realise some of these practices are against the law.

“Some retailers have signs on the wall saying they do not give refunds under any circumstances, but these signs do not override consumer guarantees imposed by law,” Ms Young said.

“These guarantees include that the product will work as described by the seller and applies to all items under $40,000 and some products over $40,000 are also guaranteed, if they are purchased for personal or household use.

“The purchased product has to be of acceptable quality. That means that the product has to be:

  1. Safe;
  2. Properly made;
  3. Do the things that you would normally expect the product to do; and
  4. Match the description that was provided to you.

“In other words, the product needs to be of a quality that you would normally expect, taking into account the type of product and the cost of the product.

Repair, replacement or refund

Ms Young said that if a product does not work properly, you may be entitled to ask for a repair, a replacement product or a refund.  

“If there is a minor issue with the product, such as a small defect that can be fixed with a repair, the business can choose to make that repair instead of giving you a replacement, or a full refund,” Ms Young said.

“If there is a major problem with the product, for example, the product is unsafe, or is very different from the description that was provided to you, then you can ask for a replacement or a refund. This also applies for the product can’t be easily repaired.

“It is against the law for a business not to give you a refund if your product has a major problem, but this does not apply to ‘change of mind’ refunds or exchanges, or if you have found the same product cheaper elsewhere.

“While some retailers will accept change of mind returns, they are not obliged to, unless the product has a major problem.

Guaranteed delivery before Christmas

Ms Young said if a retailer promises that delivery will be made before Christmas, this might not actually amount to a legal guarantee by the retailer.

“While a retailer may give a specific cut-off date for delivery before Christmas, you should always check the fine print in the terms and conditions,” Ms Young said.

“There are likely to be exclusions that protect the retailer, so it is not in fact a legal guarantee that the delivery will occur by Christmas.

“Additionally, any guarantees may only allow for reimbursement of delivery fees if the gift does not arrive on time.

Consumer law and gift vouchers

Ms Young said there are no express laws that cover expiry dates on gift vouchers, but contract and common law principles still apply.

“A business is generally not obliged to honor a gift voucher after the expiry date,” Ms Young said.

“A grey area exists when there is no expiry date printed on the voucher and consumers are entitled to use it for a ‘reasonable length of time’ after purchase.

“Things also become difficult when companies go bust and gift vouchers can sometimes become worthless.

“If the business is purchased by a new owner, there are two scenarios that can play out:

  1. If the business has been purchased as a ‘going concern’ (i.e. if it continues to operate) then the new owner is likely to be obligated to honour gift vouchers.
  2. If the new owner has simply purchased the assets of the business, they are under no obligation to honour the gift card. In these circumstances, gift card holders have no option other than to become an unsecured creditor of the company, in which case the chance of getting your money back is usually quite slim.

Expired and extended warranties

Ms Young said the world of consumer guarantees and warranties was particularly complex.

“Some retailers may avoid responsibility for faulty items by claiming warranties have expired, but people should not accept this at face value,” Ms Young said.

“These guarantees do not have a specific expiry date – they operate separately to warranties and apply for a ‘reasonable time’ after purchase, depending on the nature of the goods or services.

“Additionally, consumers should think very carefully before paying extra for an extended warranty, because you aren’t necessarily getting any extra protections.

“Do your homework and remember that a retailer is breaking the law if they use unfair pressure or mislead you into paying more for the rights you already have under consumer guarantees.”