Page 57 - Print 21 Magazine Sep-Oct 2020

Legal Issues
Refund or replacement?
Legal eagle Wal Abramowicz says goods producers including printers have rights as well as obligations under the Australian Consumer Law.
Where an item does suffer from a major issue, then the consumer is entitled to reject the goods. This is where the legal process differs from a discretionary refund offered by a business to preserve its relationship with the customer. In order to be entitled to a refund or replacement under the ACL, the consumer must notify the business that the goods are rejected and return the goods to the supplier.
If the consumer rejects and returns the goods, then they are entitled to choose whether they want a replacement for the goods or a refund and the business must provide whichever is chosen. If they do not follow those steps, no obligation arises.
This is designed to protect businesses from customers who complain about minor issues and want their money back but intend to keep and use the goods.
While a business may voluntarily offer
a refund or replacement to an unhappy customer at any time and for any reason, the circumstances where they are obligated to do so are limited. So any business producing a quality product and dealing in good faith with its customers should not worry about the Australian Consumer Law being used against them. 21
Wal Abramowicz is managing director of Fox & Staniland, Gordon NSW. Contact him at wal@ foxstaniland.com.au.
These days it is common to find unreasonable customers demanding refunds and leaving 1-star reviews on any platform they can find. Consumers often believe they are entitled to a refund whenever they are unhappy for any reason and businesses will sometimes provide one in the interests of customer
service or brand reputation. However, the circumstances in which a consumer has a right to a refund are covered by federal legislation in the Australian Consumer Law (ACL).
In order for a refund to be warranted under the law there must have been a breach of a consumer guarantee. There are a number of these in the ACL, including the Guarantee as to Acceptable Quality which states:
“Goods are of acceptable quality if they are:
• Fit for all the purposes for which goods of
that kind are commonly supplied; and
• acceptable in appearance and finish; and
• free from defects; and
• safe; and
• durable.”
If the goods fail to meet those criteria then the business may be in breach of the guarantee. Whether there has been a breach or not also depends on the time which has passed since the item was purchased as well as the type of item involved, the reasonable lifespan of that type of item and the amount of use it has had.
If there has been a breach then the consumer has a right to either a repair, refund or replacement of the item. Which of those apply depends on whether the problem with the item is a major or minor issue.
“Any business producing a quality product and dealing in good faith with its customers should not worry about the Australian Consumer Law being used against them.”
An issue with an item is a major issue if: • The consumer would not have bought the
item had they known about it;
• The item is very different from its
description or a sample or demonstration
model;
• The item cannot be used for the normal
purpose of that item;
• The item cannot be used for a purpose you
told the supplier you were going to use it
for; or
• The item is unsafe.
If the breach is not a major issue then the consumer is not entitled to a refund. The consumer must give the business an opportunity to repair the item or otherwise fix the issue within a reasonable time.
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