What to do with a faulty product
Bought something new only to find it's not up to scratch? Find out what your rights are.
Consumer rights and products
When you buy a product, you expect it to last and to do what it's supposed to do. And if it breaks, you don't want to argue with a retailer about a refund or a replacement – no ifs, and no buts!
What are my rights?
The Australian Consumer Law creates guarantees which automatically protect Australian consumers and give them the rights they expect. Businesses must provide these guarantees even if they also give or sell you other warranties.
The consumer guarantees apply to:
- new and second-hand products
- sales and seconds
- online sales (although sales by overseas companies might be difficult to follow up)
- gifts (with some proof of purchase)
- services (see our article about services)
- bundled products and services.
According to the consumer guarantees, goods must:
- be of acceptable quality
- be fit for any purpose represented by the business or made known to the consumer before purchase
- match descriptions made by the salesperson, on packaging and labels, and in promotions or advertising
- match the sample or demonstration model
- meet any extra express warranties
- have spare parts and repair facilities available for a reasonable period after purchase
- come with full title and ownership
- come with a right to undisturbed possession
- not have any hidden securities and charges over them.
How do I get the consumer guarantees?
Consumer guarantees automatically apply if you bought, hired or leased goods or services after 1 January 2011:
- for less than $40,000
- for more than $40,000, but they are normally used for personal, domestic or household purposes.
Vehicles and trailers are also included, even if they cost more than $40,000, provided they are mainly used to transport goods.
But you don't benefit from the consumer guarantees if you:
- bought goods or services before 1 January 2011 – these are covered by different laws
- bought goods to resupply them or make them into something else
- misused the goods
- simply changed your mind or you saw it cheaper somewhere else
- knew about the faults in the goods before you bought them
- bought from a private seller, like at a garage sale or a fete (but you still have rights to full ownership, undisturbed possession and no hidden charges)
- bought at a traditional auction where the auctioneer acts as agent for the seller (but you still have rights to full ownership, undisturbed possession and no hidden charges).
How the guarantees apply to goods
What is acceptable quality?
Suppliers and manufacturers guarantee that consumer goods are of acceptable quality. This takes into account the type of product, the cost, and any claims made by the seller, such as in advertising or spruiking.
Acceptable quality means that goods:
- do everything a consumer reasonably expects
- have an acceptable appearance and finish
- are safe, durable and have no defects.
For example, in the case of a new fridge, this means that the fridge keeps food cool, is not scratched or dented, and doesn't break down after 12 months. A cheaper fridge might not be expected to last as long as a more expensive fridge. And if there is a big sticker on the fridge that says it's the quietest fridge on the market, then it should not wake you up in the middle of the night.
Second hand goods are covered by this guarantee – but you have to take into account their price, age and condition. Seconds are also covered – if their faults are drawn to your attention before you buy. So if you are told about the scratch on the side of the fridge, you can't complain about it later. But you can complain about the broken door if that wasn't obvious when you bought it.
What does "fit for purpose" mean?
Suppliers guarantee that goods will be fit for any purpose a consumer tells them about before they buy, hire or lease. Suppliers also guarantee that goods will be fit for any purpose the supplier says they are fit for.
We've heard of some great examples of products not quite being fit for purpose. How about swimsuits that are see-through when wet, or mountain bikes that can't be ridden off-road?
This guarantee of fitness for purpose won't apply if you did not actually rely on the supplier's skill and judgment or if it was unreasonable for you to do so.
For example, let's say you want to buy a diving watch. You see a watch that looks like one your friend wears for diving, and you buy it, without checking with the retailer that it's OK for diving. It turns out that it is a different model and is only water resistant, not waterproof. You can't say that the watch was not fit for purpose.
Does the product match the description?
Suppliers guarantee that goods sold, hired or leased to a consumer must match their description given by a salesperson or on packaging, labelling or advertising.
So if a handbag is described in a brochure as "softest leather", but is in fact softest vinyl, it does not match its description and does not satisfy the guarantee.
Does the product match the sample or demonstration model?
Suppliers guarantee that goods will match the sample or demonstration model in quality and condition and that the consumer will be able to compare the goods with the sample.
For example, you order a dark grey suit after trying on a sample. When it arrives six weeks later, you find that while it's a lovely, well-made suit, the fabric used is light grey. The suit doesn't meet the guarantee.
Are there any express warranties?
If a seller or manufacturer makes extra promises about goods then they guarantee that those extra promises will be met. These might be promises about the quality, condition, performance or characteristics of goods, or the supply of parts, or services related to the goods, or the future availability of identical goods or goods which form part of a set.
For example, if a set of steak knives is advertised on the TV as "Guaranteed to last 10 years or your money back!!!" those knives should last for 10 years.
Express warranties are different to extended warranties, which are often sold by retailers with the promise that they provide consumers with extra benefits (they usually don't).
Repairs and spare parts
Suppliers guarantee that when a consumer buys a product, the manufacturer or importer will be able to provide spare parts and that repair facilities will be available for a reasonable period of time.
For example, if I buy a computer which breaks down after 12 months, it would be reasonable for me to expect spare parts and repairs to be available. However, when I bought my daughter a cheap pink plastic electronic organ with attached microphone, it would have been unreasonable for me to expect to get a spare part for the microphone after a few years of over-enthusiastic singing and dancing.
This guarantee does not apply if the consumer is advised at the time of purchase that repair facilities and spare parts will not be available after a certain period.
Ownership, undisturbed possession and hidden charges
When a consumer buys goods, the supplier guarantees that ownership passes to the consumer. This means that nobody else can claim that they are the owner of the goods. This guarantee also applies if the sale is by auction or by private sale. However, it does not apply to goods which are leased or hired – because the owner still owns the goods and you are supposed to give them back when your lease or hire agreement is finished.
Consumers are guaranteed that they will have undisturbed possession of their goods. This means that no one is going to knock on your door and take the goods away from you. This applies also to items bought at auction or private sale. For hired or leased goods, consumers should have undisturbed possession for the period of hire or lease, provided the consumer makes their payments on time.
Consumers are guaranteed that their goods will be free of any undisclosed securities or charges, unless these are clearly made known before purchase. This also applies to goods sold by auction or private sale but not to leased or hired goods. This means that if goods have previously been used to guarantee a debt, a debt collector can't just come and take the goods away.
Failure to meet the guarantees
You have a few options available if your goods don't meet a consumer guarantee. It all comes down to whether your goods have suffered from a major or a minor failure.
Major failures in goods are those which can't be fixed or are too difficult to fix. The tests are:
- A consumer would not have bought the goods had they known about the problem. For example: no one could be expected to buy a vacuum cleaner that will fall apart after three months.
- The goods are significantly different from their description, sample or demonstration model. For example: you need a lime green leotard for a gymnastics performance but the online retailer sends you an aqua leotard instead.
- The goods are unfit for their normal purpose or the purpose specified to the supplier and can't be fixed in a reasonable time. For example: your new gumboots have a hole in the sole and can't be worn in the rain.
- The goods are unsafe. For example: your new toaster sends out sparks when you switch it on.
In the case of a major failure, you can:
- return the goods to the supplier and ask for a refund
- return the goods to the supplier and ask for a replacement
- keep the goods, and ask for compensation for the difference in value from either the supplier or the manufacturer.
A minor failure is something that can be fixed in a reasonable period of time. The supplier can offer you a refund, replacement or repair of a product. These must be provided free of charge. If the supplier refuses to fix the problem or takes too long you can ask someone else to fix the problem and ask for compensation from the seller.
How do the remedies work?
If your product has a minor failure the supplier can give you a free repair instead of a replacement or a refund. You must accept this free repair if the supplier offers it to you. If the supplier doesn't give you a free repair, or doesn't do so in a reasonable period of time, you can:
- get the repair done elsewhere and ask the supplier to pay the costs
- ask for a replacement
- ask for a refund
- ask for compensation for the drop in the product's value
If your product has a minor failure, the supplier can choose to offer you a refund. If you have a major failure, the seller must offer you a refund as one of your options. The seller can't make you accept a credit note or exchange or replacement if you prefer to take the refund. The refund should be the same amount as you paid and it should be provided in the same form as your original payment.
If you are offered a replacement for a minor failure, or if you choose a replacement for a major failure, the replacement must be the same type and similar value as the product that is being replaced. If that's not possible, you might have to choose a refund or repair. The supplier can take into account how much time has passed since you bought the product, the type of product and the expected life of the product.
Loss of value
If a product has a major failure but you choose to keep it, you can still ask the supplier for a partial refund for the loss in value. You will need to negotiate with the supplier, taking into account issues such as what is wrong with the product, how much you originally paid for it and how much a new one would cost.
Where products have failed to meet a consumer guarantee, you might be able to claim compensation for damages from the supplier or manufacturer. The damages must be reasonably related to the failure to meet the consumer guarantee. This means that a business won't have to pay for damages that are not caused by their product or their conduct, or for something that has happened independently of their business or after goods left their control.
To make a claim for compensation you should work out an amount which would put you in the same financial position you were in before the breach of guarantee. You should have as much information available as possible to support your claim.
For example, if your brand new refrigerator stops working and all frozen and refrigerated goods are spoiled and water has damaged the kitchen floor, you would be able to put together a claim for compensation from either the supplier or the manufacturer. This would include the cost of the food (might be difficult to prove without receipts but an estimate would be reasonable), and the cost of fixing the floor.
There are many retailers who display misleading signs about refunds. They try to make consumers believe that they can't return goods for a refund in any situation, even if there is a major failure. Here are some examples of signs that don't comply with the Australian Consumer Law:
- No refunds
- No refunds on sale items
- No refunds after 14 days
- Exchange or credit note only
However, signs that tell consumers there are no refunds for change of mind are OK.
What can I do?
As soon as you notice a problem with your product you should contact the supplier to let them know. Work out whether you think it's a major failure or a minor failure, and think about what you would like to happen before contacting the business.
Remember, for a minor failure the business can offer to repair, or give you a refund or a replacement. For a major failure, you can choose a refund, replacement or compensation for the difference in value of goods.
Try phoning first – sometimes a quick phone call is all that's needed. If the person you speak to is not helpful, ask to speak with a manager or the business owner. You might need to use some key phrases to get your point across, such as:
- Australian consumer law
- consumer guarantees
- acceptable quality
- fit for purpose
- major failure
- refund or repair or replace
- I'm going to tell CHOICE about this!
Take notes of your conversations so you can refer to them later if you need to, including dates and names of people you speak with.
If a phone call is not enough, you might have to follow up with an email or letter or a visit to a store. Be clear. Say what is wrong and what you want to happen. Give them a reasonable time to respond and keep copies of any correspondence.
Do I go to the supplier or the manufacturer?
You can claim a remedy from the supplier if your goods don't meet one or more of these consumer guarantees:
- acceptable quality
- fitness for purpose
- matches description
- matches sample or demonstration model
- express warranty
- good title
- undisturbed possession
- undisclosed securities
The supplier can't refuse to help you by sending you on to the manufacturer or importer. The supplier has three years to make its own claim against the manufacturer for compensation for any replacements or refunds or repairs it has to make.
You can claim a remedy directly from the manufacturer or importer if goods don't meet these consumer guarantees:
- acceptable quality
- matches description
- express guarantees
- repairs and spare parts
If one of these guarantees is breached you can claim from the manufacturer or importer for the reduction in the value of the product. The manufacturer or importer might want to give you a repair or a replacement instead.
Returning the goods
You are responsible for returning the goods unless the cost is significant – for example, a large fridge or TV. In that case, the supplier must arrange and pay for the return of the product.
Despite what the supplier might tell you, you don't have to return faulty products in their original packaging to get a refund.
What if I can't get any response?
Sometimes it's necessary to take action in courts or tribunals. You might need legal advice if you want to do this, as it can be expensive and cases can take unexpected turns.