Always Read the Fine Print (Including Your Own)

By Campbell Phillips | 25 Oct 2012

Recently, the UK’s Office of Fair Trading has said that as many as one third of British online retailers could be breaking consumer laws. Is Australia any different?

Recently, reports from the UK reveal that many online retail websites aren’t complying with British consumer protection laws.

The Office of Fair Trading (OFT) carried out checks on 156 popular websites and found that as many as 62 were potentially breaching those laws. Breaches included unreasonable restrictions on refunds and compulsory charges being added without prior warning once the customer reached the checkout.

In the hopes of resolving the issue, the OFT has requested those websites correct these issues ahead of Christmas time, or risk further action.

A Cautionary Tale

For retailers in Australia, this foreign lesson in compliance is a timely one. The UK has very similar consumer protection laws as we do in relation to what restrictions can be placed around refunds and when, and many local retailers are just as likely to forget about these details as their British counterparts.

If you haven’t looked at your website’s returns policy, warranty information or satisfaction guarantee recently, be sure to do so ahead of the silly season. Christmas is a frantically busy time of year for everyone, especially retailers. For this reason, it’s the time of year when both consumers and retailers are most likely to get caught out.

Diana Broadhurst, commercial lawyer and Founder of The Bench Legal, points out the similarities of Australian and British consumer laws, highlighting those issues that most commonly arise.

“Under the Australian Consumer Law, a supplier (which can include the seller, the importer and the manufacturer) must comply with compulsory consumer guarantees,” Broadhurst explains. “The guarantees entitle buyers to return goods if (among other things) they come with a defect, or develop a defect within a reasonable period of time.”

It’s worth noting that these laws, in their current form, have only existed since the beginning of last year, when they were made blanket policy across the entirety of Australia, rather than on a per state or territory basis. For a full account of this legislation, visit the Australian Consumer Law website.

Returns Policies

Sometimes what the consumers and the law believes as a reasonable reason for returning a product differs from a retailer’s belief. However, just because a retailer has clearly stated their own terms in a returns policy or similar, those terms must still be consistent with the consumer’s rights under the relevant legislation.

In the case of faulty or defective product, retailers have very little room to argue, says Broadhurst.

“When retailers state that goods must be returned within seven or 14 days (or some other period), or that the product must be returned in its original packaging, they can be inadvertently breaching the Australian Consumer Law, as the buyer has the right to return goods outside this period and without the packaging, if (for example) the product is defective,” she explains.

Having said that, these laws don’t abrogate a retailer’s right to define a returns policy of their own for ‘change of mind’ returns. It is this point and the difference between change of mind returns and returns of defective goods that is most often a point of contention between consumers and retailers.

“It is important that retailers differentiate between their returns policy for ‘change of mind’ returns and their policy for the return of goods which are faulty or otherwise do not comply with Consumer Guarantees.  While sellers can set time periods and other conditions around their policy for ‘change of mind’ returns, they cannot do so for return of goods that breach consumer guarantees.”

Ease Concerns by Being Upfront

The best way that retailers can be sure to avoid messy legal issues is to carry the correct information on any terms and conditions on their website, including their returns policy, and in any warranty document that is provided with their goods.

Under Regulation 90 of the Australian Consumer Law, an express statement is required to be included in all warranty documents:

Our goods come with guarantees that cannot be excluded under the Australian Consumer Law. You are entitled to a replacement or refund for a major failure and for compensation for any other reasonably foreseeable loss or damage. You are entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure.

By including this statement or similar in an obvious place in a retail site, not only can retailers improve their legal compliance, the retailer stands to gain by reassuring its legally-savvy customers that the business is aware of and compliant with Australian Consumer Law.

1 Comment

One thought on “Always Read the Fine Print (Including Your Own)”

  1. And we wonder why retail is dieing in

    Consumers demand expect the world and will not pay for it.
    Cant blame them for that as we get screwed by foreign
    big business and governments constantly that do not
    support local business.

    Leaving little room for even a profit margin net alone
    accomodating and paying for unfair returns refunds.

    I note the information does not give any real indication of
    actual timeframes for said returns refunds…..

    Fair trading should dictate what the actual timeframes
    are and also dictate around what consitutes a repair
    rather then refund around warranties and guarantees.

    Whats the point of warranties n guarantees if rather then
    a repair this system is demanding returns n refunds be

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