WHEN THE SHOE DOESN’T FIT: NAVIGATING REFUNDS & RETURNS

As retailers begin welcoming customers back into bricks and mortar outlets, many will keep in-store change rooms closed to comply with COVID-safe guidelines.  Without the opportunity for customers to try before they buy, there is likely to be an increased rate of returned goods and businesses should be aware of their obligations under the Australian Consumer Law (ACL).

Repairs, Replacements and Refunds

Under the ACL, goods sold to Australian consumers are automatically covered by certain guarantees, including that they are of acceptable quality, fit for purpose, correspond with description, sample or demonstration model, and will meet any additional representations made at the time of purchase in relation to performance, condition and / or quality (Consumer Guarantees).

Where a good does not meet one or more of the Consumer Guarantees, customers are entitled to a repair, replacement or refund depending on the nature of the issue:

  • Minor problems – retailers can generally elect how to remedy minor faults via their returns policy i.e. repair, replacement or refund.  However, where the business does not offer free repair within a reasonable period, or is unable to repair the products, consumers may seek repairs elsewhere and forward the costs to the business, or request a replacement, refund or recover compensation for the drop in the product’s value below the price paid; and
  • Major problems – if goods have a fault that would have stopped someone from purchasing the good had they known about it, it is significantly different from the product sample or description, it is unfit for its common purpose, or is unsafe, the customer is entitled to their choice of a replacement or refund.

During COVID-19, many people are particularly cautious about packaging and other exposed surfaces on purchased goods.  With this in mind, it is worth noting that retailers cannot refuse one of the above remedies simply because the product is not in its original packaging.

Similarly, subject to the relevant return policy, businesses are not required to provide a statutory remedy where a consumer changes their mind, decides they do not like the purchase or have no use for it, discovers they can buy the goods or services more cheaply elsewhere (unless the business has a price guarantee), or have damaged the goods by using them in a way that was unreasonable.

Return Policies & Practices

In the current climate, businesses should also review their returns policy for ACL-compliance and take steps to ensure that staff are familiar with, and provide consistent messaging to customers about, their policy.

For further information on the Consumer Guarantees and business obligations, please see our previous article at this link.

Further information about the COVID-19 guidelines for retailers is available on the Safe Work Australia website.

This article was authored by Alexandra Moore (Solicitor), Valiant Warzecha (Solicitor), Jessie Buchan (Senior Associate) and Melinda Upton (Partner and Global Co-Chair, Intellectual Property and Technology).