The Reject Shop Ltd - Court outcome

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8 March 2018
Court actions

National variety goods retailer The Reject Shop Ltd (ACN: 006 122 676) has been penalised $140,000 after admitting that it contravened the product safety provisions of the Australian Consumer Law (Victoria) by selling projectile toys that did not meet the relevant Australian Safety Standard.

The Reject Shop operates more than 330 stores across Australia. We took action in the Federal Court after on-site inspections in 2015 revealed stores were selling:

  • UFO toys (called ‘Action Copter’) that did not include a warning:
    o about the dangers of aiming the toy at a person’s eyes or face, and
    o to only use projectiles supplied or recommended by the manufacturer.
  • balloon toys (called ‘Let’s Party Balloon Helicopter’ toy) with an unsafe design that could have increased the risk of injury.

The Australian Standard for projectile toys defines the labelling and design elements that products must meet before they can be sold.

During inspections on 26 October 2015, Consumer Affairs Victoria inspectors identified two lines of non-compliant toys for sale in The Reject Shop outlets, resulting in the removal from sale of over 6,200 UFO toys, and over 1,700 balloon toys.

When our inspectors advised The Reject Shop that the toys did not meet the required standard, the company, across all its stores:

  • immediately withdrew both toys from sale
  • destroyed all stock of balloon toys
  • corrected the labelling on the UFO toys to make them compliant, before returning them for sale.

After the breaches were uncovered, the Reject Shop cooperated fully with the Director of Consumer Affairs Victoria and had enhanced its compliance program.

The court made orders, agreed by both parties, that The Reject Shop must:

  • pay a $140,000 penalty plus $15,000 costs
  • publish a ‘Public warning product recall and refund notice’ on its website and display it at each store
  • pay for an independent compliance specialist to monitor its revised compliance program for three years
  • pay full refunds to anyone returning the toys.

We remind suppliers and manufacturers that all items sold in Australia must meet the relevant Australian Standard.

For more information about projectile toys, including a link to the projectile toys safety standard, visit the Projectile toys page on the Product Safety Australia website.