Offering rebates, gifts, prizes and other free items
When supplying or promoting goods or services, it is unlawful for the business to offer rebates, gifts, prizes or other free products without intending to provide them, or without providing them as offered.
The business may have a defence if the failure to provide the free product was not the supplier’s fault and they took reasonable care to avoid the failure.
The rebate, gift, prize or other free product must be provided:
- within the time specified in the offer, or
- if no time was specified, within a reasonable time.
Businesses should make the terms of any ‘free’ trial or introductory offer clear to customers, including:
- when the introductory period or offer will end
- what fees or charges will apply, and when
- what services or products can be used during the trial
- whether consumers will automatically switch to paying for the service or product at the end of the trial period
- what they need to do to end the trial
- whether consumers have to give notice to end the trial; and if so, how much notice and how it must be given.
Businesses must make sure any promotions are not misleading or deceptive. They cannot rely on small print and disclaimers as an excuse for not delivering products and services as promised, or for billing consumers without obtaining their authorisation.
‘Bait advertising’ is illegal under the Australian Consumer Law. It usually happens when a business advertises products at a certain price but does not have a reasonable supply for customers to buy.
What is a ‘reasonable supply’ will depend on several things, including the type of products and what the business said in its advertisement.
Wrongly accepting payments for goods or services
Businesses must not accept payment for goods or services:
- they do not intend to supply
- if they know, or should have known, they would not be able to supply the goods or services in the time specified or if no time is specified, within a reasonable time.
A business may avoid prosecution if:
- the failure to supply the goods or services was due to something beyond its control, and
- it exercised due diligence and took reasonable precautions to avoid the failure.
Resolve your dispute or complaint
If you are having a dispute with the store or seller, view our Resolve your problem or complaint section.
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