Consumer guarantees

Under the Australian Consumer Law, when you buy products and services they come with automatic guarantees that they will work and do what you asked for. If you buy something that isn’t right, you have consumer rights.

What products and services are guaranteed?

Businesses must guarantee products and services they sell, hire or lease for:

under $40 000
over $40 000 that are normally bought for personal or household use.

Business vehicles and trailers are also covered, irrespective of cost, provided they are used mainly to transport goods.

Businesses must provide these automatic guarantees regardless of any other warranties they give to you or sell you.

If a business fails to deliver any of these guarantees, you have consumer rights for:

Consumer guarantees on products and services

Since 1 January 2011, the following consumer guarantees on products and services apply.

Products must be of acceptable quality, that is:

safe, lasting, with no faults
look acceptable
do all the things someone would normally expect them to do.

Acceptable quality takes into account what would normally be expected for the type of product and cost.

Products must:

match descriptions made by the salesperson, on packaging and labels, and in promotions or advertising
match any demonstration model or sample you asked for
be fit for the purpose the business told you it would be fit for and for any purpose that you made known to the business before purchasing
come with full title and ownership
not carry any hidden debts or extra charges
come with undisturbed possession, so no one has a right to take the goods away or prevent you from using them
meet any extra promises made about performance, condition and quality, such as life time guarantees and money back offers
have spare parts and repair facilities available for a reasonable time after purchase unless you were told otherwise.

Services must:

be provided with acceptable care and skill or technical knowledge and taking all necessary steps to avoid loss and damage
be fit for the purpose or give the results that you and the business had agreed to
be delivered within a reasonable time when there is no agreed end date.

Consumer guarantees on products and services also apply to:

bundled products and services
gifts with proof of purchase
sale items
online products and services bought from Australian businesses
second-hand products from businesses, taking into account age and condition.

Who to claim a remedy from

Products

You can claim a remedy from the retailer if the products do not meet any one or more of the consumer guarantees, with the exception of availability of spare parts and repair facilities.

The remedies you can seek from the retailer who sold you the product include a repair, replacement, or refund and in some cases compensation for damages and loss.

The retailer can’t refuse to help you by sending you to the manufacturer or importer.

You can claim a remedy directly from the manufacturer or importer if the goods do not meet one or more of the following consumer guarantees:

acceptable quality
matching description
any extra promises made about such things like performance, condition and quality
repairs and spare parts – the manufacturer is responsible for ensuring that spare parts and repair facilities (a place that can fix the consumer’s goods) are available for a reasonable time after purchase unless you were told otherwise. How long is ‘reasonable’ will depend on the type of product.

You are only entitled to recover costs from a manufacturer or importer, which include an amount for reduction in the product’s value and in some cases compensation for damages or loss.

Services

You can claim a remedy from the supplier if the services do not meet any of the consumer guarantees in relation to services. Remedies include cancelling a service and in some cases compensation for damages and loss.

Exceptions to guarantees

Consumer guarantees do not apply if you:

got what you asked for but simply changed your mind, found it cheaper somewhere else, decided you did not like the purchase or had no use for it
misused a product in any way that caused the problem
knew of or were made aware of the faults before you bought the product
asked for a service to be done in a certain way against the advice of the business or were unclear about what you wanted.

Rights to a repair, replacement, refund, cancellation or compensation do not apply to items:

worth more than $40 000 purely for business use, such as machinery or farming equipment
you plan to on-sell or change so that you can re-supply as a business
bought as a one-off from a private seller, for example at a garage sale or fete (but you do have rights to full title, undisturbed possession and no unknown debts or extra charges)
bought at auction where the auctioneer acted as an agent for the owner (but you do have rights to full title, undisturbed possession and no unknown debts or extra charges)
where the contract is to store or transport goods as part of business activities.

Different laws apply to insurance or financial services and for products or services you bought before 2011.

Repair, replace, refund

If a product or service you buy fails to meet a consumer guarantee, you have the right to ask for a repair, replacement or refund under the Australian Consumer Law. The remedy you’re entitled to will depend on whether the issue is major or minor.

Repair, replacement or refund

You can ask a business for your preference of a free repair, replacement or refund, but you are not always entitled to one. For example, the consumer guarantees do not apply if you got what you asked for but simply changed your mind, found it cheaper somewhere else, decided you did not like the purchase or had no use for it.

See: Exceptions to consumer guarantees

If you have a minor problem with a product or service, the business can choose to give you a free repair instead of a replacement or refund. When you have a major problem with a product, you have the right to ask for your choice of a replacement or refund. For a major problem with a service, you can choose to receive compensation for the drop in value below the price paid, or a refund.

Repairs

If the problem with a product or service is minor, you must accept a free repair if the business offers you one.

If the business fails to give you a free repair within a reasonable time or cannot fix your problem, you can:

get it done elsewhere and pass on the costs to the business
ask for a replacement
ask for a refund
recover compensation for the drop in value below the price paid.

Repair notices

Under the Australian Consumer Law, businesses accepting goods for repair must provide consumers with repair notices when:

the goods being repaired are capable of retaining user-generated data, for example, mobile phones, computers, portable music players and other similar electronic goods
it is the repairer’s practice to supply refurbished goods rather than repair defective goods, or to use refurbished parts in the repair of defective goods.

The consumer must receive the repair notice in writing before the goods are accepted by the business for repair.

Replacements and refunds

You can ask for a replacement or refund if the problem with the product is major.

Replaced products must be of an identical type to the product originally supplied. Refunds should be the same amount you have already paid, provided in the same form as your original payment.

The business may take into account how much time has passed since you bought the product considering the following factors:

type of product
how a consumer is likely to use the product
the length of time for which it is reasonable for the product to be used
the amount of use it could reasonably be expected to tolerate before the failure becomes noticeable.

For a major problem with services you can cancel the contract and obtain a refund or seek compensation for the drop in value of your services provided compared to the price paid.

What is a major problem?

A product or good has a major problem when:

it has a problem that would have stopped someone from buying it if they’d known about it
it is significantly different from the sample or description
it is substantially unfit for its common purpose and can’t easily be fixed within a reasonable time
it doesn’t do what you asked for and can’t easily be fixed within a reasonable time; or
it is unsafe.

A service has a major problem when:

it has a problem that would have stopped someone from buying it if they’d known about it
it is substantially unfit for its common purpose and can’t easily be fixed within a reasonable time
it does not meet the specific purpose you asked for and cannot easily be fixed within a reasonable time
it creates an unsafe situation.

Returning the product

You are entitled to return a product if you believe that there is a problem. You are generally responsible for returning the product if it can be posted or easily returned. You are entitled to recover reasonable postage or transportation costs from the business if the product is confirmed to have a problem, so keep your receipts.

When a product is too large, too heavy or too difficult to remove, the business is responsible for paying the shipping costs or collecting the product within a reasonable time of being notified of the problem. Examples include:

a wide screen TV
a bed
an extension ladder stuck in the extended position
a product that has been subsequently installed, like a stove or a dishwasher.

You do not have to return products in the original packaging in order to get a refund.

If the product is found not to have a problem, you may be required to pay the transport or inspection costs. An estimate of these costs should be provided to you before the product is collected, and the costs must not be inflated in an attempt to deter you from pursuing your claims.

Approaching the retailer or manufacturer

The retailer who sold you the product or service cannot refuse to help you by sending you to the manufacturer or importer. You can approach the manufacturer or importer directly, however, you will only be entitled to recover costs from them, which include an amount for reduction in the product’s value and in some cases compensation for damages or loss. You cannot demand a repair, replacement or refund from the manufacturer.

‘No refund’ signs and expired warranties

Signs stating ‘No refunds’ or ‘No refunds or exchanges on sale items’ are unlawful, as they imply that it’s not possible to get a refund under any circumstances, including for faulty items. In fact your consumer guarantee rights still apply. Retailers don’t have to give you a refund or exchange if you simply change your mind. Always check the store’s returns policy.

Your rights under the consumer guarantees do not have a specific expiry date and can apply even after any warranties you’ve got from a business have expired.

Cancelling a service

Under the Australian Consumer Law, you have certain rights to cancel a service.

When you can cancel a service

If you have a major problem with a service or a minor problem that can’t be fixed within a reasonable time you have the right to cancel a service contract, when it is:

provided with an unacceptable level of care and skill
unfit for the purpose you asked for
not delivered within a reasonable time when there is no agreed end date.

Suppliers should give any refunds in the same form as your original payment.

You can also ask for compensation for damages or loss caused by the problem.

Services you can’t cancel

You must pay for services you’ve received under a service contract that worked as expected.

You can’t cancel a service contract or get a refund if the problem was outside the control of the provider or if you:

changed your mind
insisted on having a service provided in a particular way, against the provider’s advice
failed to clearly explain your needs to the provider.

Cancelling your service

If you have a problem with a service, take the following steps:

Contact the service provider verbally or in writing to explain the problem. If the provider cannot fix the service in a reasonable time, state that you want to cancel the service contract.
If relevant, also ask the service provider to compensate you for any damages or losses caused by the problem.
If you’ve paid for the service and it has already started or been delivered, negotiate a refund to cover the services that failed and any advance payments.
Show proof of purchase with a receipt or bank statement.

Cancelling bundled products & services

Businesses often sell related goods and services together as a package. Sometimes a problem develops with one part of the package — the product or service.

If you return goods due to a major problem, you have the right to cancel any service contracts they were provided with.
If you cancel a contract for unsatisfactory services, you must return any goods connected with the service—even if there is no problem with the goods.
If you have paid any money for the goods, the business must give you a refund.

It is your responsibility to return the goods, unless this would involve a significant cost. In such cases the business is responsible for collecting the goods.

Warranties

Under the Australian Consumer Law (ACL), automatic consumer guarantees apply to many products and services you buy regardless of any other warranties suppliers sell or give to you. However, it is still important to understand how these warranties apply to goods or services you buy.

What is a warranty?

A warranty is a voluntary promise offered by the person or business who sold the product or service to you. Once you buy the product or service, the promise becomes a right that can be enforced under the ACL.

Warranties are separate from your automatic consumer guarantees. The consumer guarantees which apply regardless of any warranties suppliers sell or give to you, apply for a reasonable time depending on the nature of the goods or services. This means consumer guarantees may continue to apply after the time period for the warranty has expired.

Common warranties

Businesses sometimes make extra promises or representations verbally or in writing generally about the quality or standard of a good. For example, they may refer to:

the quality, state, condition, performance or characteristics of the good
what the good can do and for how long
the availability of servicing, supply of parts or identical goods.

If a manufacturer or supplier provides such a warranty, there is a consumer guarantee under the ACL that the manufacturer or supplier will comply with that warranty. If the supplier or manufacturer fails to comply with the warranty you will have rights against them under the consumer guarantees.

Example

You buy a book shelf and the sales person tells you that it can hold up to 100 kilograms. This is a statement about what the bookshelf can do and it must meet this standard.

Warranty against defects

Some businesses will also provide a warranty against defects, also called a manufacturer’s warranty. This is a representation to a consumer, made at or around the time that goods are supplied, that if the goods (or part of them) are defective, the business will:

repair or replace goods (or part of them)
resupply or fix a problem with services (or part of them)
provide compensation to the consumer.

A warranty against defects is usually limited by time.

All suppliers, manufacturers and service providers that provide you with a warranty against defects must comply with that warranty. If they do not, you may bring an action against the person or business who provided the warranty, either under the ACL or for breach of contract.

A promise about what the supplier or manufacturer will do if something goes wrong can be a warranty against defects even if it is not provided in a formal document. Any material with writing on it could evidence a warranty against defects, for example wording on the packaging or on a label, if those words contain such a promise.

A warranty against defects is provided in addition to the consumer guarantees and does not limit or replace them.

Example

You buy a motor vehicle that comes with a three-year or 100,000 km written warranty outlining what the manufacturer will do if there are certain problems with the vehicle. This is a warranty against defects.

Warranties in plain language

From 1 January 2012, written warranties against defects must be in language that’s easy to read and understand and include:

the name, business address, phone number and email address of the person or business giving the warranty
what you must do to make a claim under the warranty, and what the person or business must do to honour the warranty
a statement that the warranty is given in addition to consumer guarantees and cannot exclude them.

Extended warranties or care packages

Retailers sometimes offer to sell you an extended warranty or care package to extend the length of time of the manufacturer’s warranty. Some may tell you that an extended warranty provides extra protections you wouldn’t usually get. This isn’t necessarily true, as you automatically have consumer guarantees that suppliers must comply with, regardless of what they say or any warranties they offer.

You don’t have to buy an extended warranty – it is optional.

Suppliers risk breaching the law if they:

put undue pressure on you or use unfair tactics to get you to buy an extended warranty
mislead you into paying for the rights that you already have under the consumer guarantees.

Do your research before paying extra for an extended warranty

Before buying an extended warranty, always ask the supplier to list what it gives you over and above your automatic consumer guarantees.