Nobody wants to end up buying a dud product. But our latest survey shows it happens more often than you might expect. Of the 9555 members who took part, 35 percent had returned an item to a retailer in the past two years because it was faulty or performed poorly.
Responses echo complaints we receive about failed goods. Our advisory service deals daily with inquiries about products that aren’t up to scratch or have given up the ghost before their time.
The bright spot amidst the faulty phones and failed fridges is the Consumer Guarantees Act (CGA). The Act requires goods to be of acceptable quality. If they’re not, you’re entitled to ask the retailer to fix the problem.
Of the 35 percent of respondents (3386) who had returned a faulty item, most successfully used their CGA rights to have the product repaired (18 percent) or get a refund or replacement (67 percent).
But knowing your rights is the trick. Respondents who felt confident about the protections provided by consumer law (73 percent) were significantly more likely to get a refund or replacement when they returned a faulty good. Those who weren’t confident were more likely to get a raw deal.
The brush off
About 15 percent of respondents who returned a faulty product were given the brush-off or didn’t get the remedy they were entitled to under the Act.
In about half of these cases, the retailer claimed it couldn’t do anything because the product was “out of warranty” or told the customer they had to contact the manufacturer.
Both claims are misleading. Consumers’ rights under the CGA are on top of any manufacturer’s warranty and don’t end when the warranty does. If a product isn’t of acceptable quality, the retailer is obliged to provide a remedy.
Some respondents also got caught in the “store credit” trap. Instead of getting a refund when they returned a faulty item, they were offered store credit. Others received a partial refund or had to contribute towards the costs of repair.
Retailers using these practices aren’t meeting their CGA obligations. Under the Act, a refund means a refund. You don’t have to settle for store credit and the retailer can’t insist on it. The store also has to meet the costs of repairing or replacing a faulty good.
The brick wall
Some respondents hit a brick wall when they went back to the retailer: the store refused to acknowledge there was a problem and members had to argue their case. One member had to take their claim, which they won, to the Disputes Tribunal.
Several respondents complained about the long waits they’d had before getting a response from the store, if they got a reply at all.
The CGA requires retailers to deal with problems in a reasonable time. If they refuse or fail to do so, you have the right to get the good fixed elsewhere and recover the costs from the retailer. You can also reject the item and claim a refund. If the store refuses to play ball, you can lodge a claim in the Disputes Tribunal.
Extended warranty push
Respondents who weren’t confident about the protection provided by consumer laws were more likely to buy extended warranties. These warranties are heavily promoted by retailers. But in most cases, you're paying for protection you already have.
Mis-selling of extended warranties resulted in consumer laws being strengthened last year. New rules mean retailers who sell these warranties must give customers information about their legal rights to a repair, replacement or refund if a product is faulty.
Sales reps also have to tell consumers who buy a warranty in store that they have a cooling-off period of five working days to cancel if they change their mind.
Most respondents said they never bought extended warranties (57 percent) or used to but had stopped (24 percent). Eighteen percent bought a warranty occasionally. But the purchase rate jumped to 27 percent among respondents who didn’t feel confident about the law.
Fifty percent of respondents who had bought a warranty in the past year said the sales rep hadn’t told them about the cooling-off period. Just 21 percent of warranty purchasers had been given this information by the sales rep, despite it being a legal requirement.
Shoppers buying home appliances at Harvey Norman and Noel Leeming were the most likely to be offered an extended warranty with their purchase. Seventy-seven percent of respondents who shopped at Harvey Norman said they’d been offered a warranty. The figure was 68 percent for Noel Leeming.
About two-thirds of those who shopped at retail stores owned by the Smiths City Group were also offered a warranty. The Smiths City Group includes Powerstore, Smiths City and LV Martin.