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Who decides whether a refund, repair, replacement or other compensation is provided?
Handling major problems with goods
For a major failure with goods, the consumer can:
- reject the goods and get a refund
- reject the goods and get an identical replacement or one of similar make/model or value if reasonably available, or
- keep the goods and take action against the supplier for compensation for the drop in value caused by the problem.
The consumer gets to choose which ‘remedy’ they prefer, not the supplier or manufacturer.
A major failure with goods is when:
- a reasonable consumer would not have bought the goods if they had known about the problem. For example, no reasonable consumer would buy a washing machine if they knew the motor was going to burn out after three months
- the goods are significantly different from the description, sample or demonstration model shown to the consumer. For example, a consumer orders a red bicycle from a catalogue, but the bicycle delivered is green
- the goods are substantially unfit for their normal purpose and cannot easily be made fit, within a reasonable time. For example, a ski jacket advertised as fully waterproof is not waterproof because it is made from the wrong material
- the goods are substantially unfit for a purpose that the consumer expressly told the supplier about, and cannot easily be made fit within a reasonable time. For example, a car is not powerful enough to tow the consumer’s boat because its engine is too small – despite the consumer telling the supplier they needed the car to tow a boat
- the goods are unsafe. For example, an electric blanket has faulty wiring.
Handling minor problems with goods
If the problem is not major and can be repaired within a reasonable time, the consumer cannot reject the goods and demand a refund.
They can ask the supplier to fix the problem. The supplier may choose to:
- provide a refund
- replace the goods
- fix the title to the goods, if this is the problem
- repair the goods. It is the supplier’s responsibility to return goods to the manufacturer for repair. If the cost of repairing the goods is more than the value of the goods, the supplier can offer the consumer a replacement instead.
When the consumer chooses a refund
The supplier must repay any money paid by the consumer for the returned goods, and return any other form of payment made by the consumer – for example, a trade-in.
If this is not possible, they must refund the consumer the value of the other form of payment.
A supplier must not:
- offer a credit note, exchange card or replacement goods instead of a refund. A consumer cannot accept this kind of offer
- refuse a refund, or reduce the amount, because the goods were not returned in original packaging or wrapping.
The supplier must provide goods of the same type and similar value. If such a replacement is not reasonably available, the consumer may choose a repair or a refund.
The consumer must return goods to the supplier. If this involves significant cost to the consumer, the supplier must collect the goods at their own expense – view our Rejecting and returning goods page.
The consumer guarantees that applied to the original goods will apply to the replacements.
A consumer buys a new mobile phone. Due to a problem, the supplier replaces it. Consumer guarantees apply to the replacement phone as if it were a new mobile phone.
If a supplier cannot repair the goods - for instance, because the supplier does not have parts - or cannot do so within a reasonable time, the consumer can:
- reject the goods and seek either a refund or replacement, or
- have the goods fixed elsewhere and claim reasonable costs from the supplier.
Several buttons came off a consumer’s new shirt due to poor stitching. The tailor who made the shirt could not supply matching buttons. The consumer is entitled to ask for a replacement or refund.
The supplier must fix the problem within a reasonable time. What is ‘reasonable’ will depend on the circumstances.
A supplier would be expected to respond quickly to a request for a repair to an essential household item, such as a water heater. For goods used less often, such as a lawnmower, the reasonable time for repair would be longer.
If a supplier refuses or takes more than a reasonable time to repair the goods, the consumer can:
- take the goods elsewhere to be fixed and ask the supplier to pay the reasonable costs of this repair
- reject the goods and ask for a refund, or
- reject the goods and ask for a replacement, if one is reasonably available.
There are some restrictions on this - view our Rejecting and returning goods page.
When the consumer takes goods elsewhere for repair
If the consumer has no option but to take goods elsewhere for repair, they do not have to get the supplier’s agreement or provide quotes. However, the supplier only has to pay the ‘reasonable costs’ of repair.
A reasonable cost would be within the normal range charged by repairers of such goods, and include:
- the cost of the repair
- any other associated costs incurred by having the goods fixed elsewhere, such as transport costs.
The zip on a pair of trousers breaks after one week. The retailer tells the consumer the repair will take a month. The consumer explains he needs the trousers for work urgently but the retailer offers no other option. The consumer gets the zip replaced by a tailor for $25. When the consumer asks the retailer to pay for this, the retailer says that their tailor would have done it for $20. If the higher price is a normal price for a tailor to fix the trousers, the retailer would have to reimburse the consumer.
Prescribed requirements for repairs of consumer goods
From 1 July 2011, a repairer of goods (whether or not this is the supplier) must notify the consumer of particular information before accepting the goods for repair:
- The repairer must tell the consumer if the repairer intends to replace defective goods with refurbished goods of the same type rather than repairing the problem with the original goods, or to use refurbished parts to repair the goods. The ACL Regulations
prescribe certain wording about refurbished goods.
- For goods capable of storing data created by the user of the goods (user-generated data), the repairer must advise the consumer that repairing the goods may result in loss of the data. User-generated data includes, for example, songs, photos,
telephone numbers and electronic documents.
Repairers that fail to comply may face:
- a civil penalty of $50,000 for a body corporate and $10,000 for an individual
- a criminal penalty for the same amount
- an infringement notice
- legal action (for example, an injunction) by either a consumer protection agency or the consumer.