25 January 2016
Consumer advocacy group CHOICE is advising consumers to be cautious about Dick Smith's "receiver's sale" with questions remaining around how the struggling retailer could fulfill its "cashback promise" in the future.
The warning comes as the receivers announced the closure of 27 Dick Smith outlets located in David Jones stores, days after customers received an email encouraging them to take advantage of the "exclusive mates rates" and "cashback promise".
"While the receiver is pushing hard to flog off the failed retailer's products, consumers need to know they stand to risk their refund rights if the company shuts down," says CHOICE Head of Media Tom Godfrey.
"Consumers might be tempted to grab a bargain at the Dick Smith sale, but they should exercise caution when buying Dick Smith-branded items like TVs.
"If you buy a Dick Smith TV and it stops working, ordinarily you would be able to rely on the Australian Consumer Law to get a refund, repair or replacement.
"However, if Dick Smith ceases to trade in the future, it will be difficult to enforce your rights to a refund or other remedy from either the manufacturer or the retailer if a product doesn't work properly.
"The fact is, if the retailer and the manufacturer are the same company, it is difficult to pursue any remedy if that company ceases to exist.
CHOICE also urges consumers to think carefully before buying extended warranties from Dick Smith.
"The only thing extended for consumers is the likely wait they might face at the end of a very long line of creditors should their products fail," says Mr Godfrey.
"Dick Smith may be proudly trumpeting bare-minimum compliance with the Australian Consumer Law as their 'cashback promise', but we're not confident that they can live up to this if the company goes under."