It's important to be aware of the rules about consumer guarantees, as covered under Australian Consumer Law.

A consumer doesn't have an automatic right to a remedy (refund, exchange, repair or compensation) unless a guarantee has not been complied with. 

• For example, businesses are not obligated to provide a remedy if the consumer has simply changed their mind about the purchase, or bought the wrong item. 

However, some businesses may choose to give all customers a remedy simply to maintain good customer relations.

Sale of goods

As a supplier, you're guaranteeing that the goods:

• are of acceptable quality - eg safe, durable, free of defects, acceptable in appearance and finish, and fit for the purpose;
• match any descriptions given;
• match any samples or demonstrations given;
• are not subject to any changes, encumbrances or legal claims by a third party;
• are fit for the purpose, if described by the consumer to the salesperson; and
• fit for the purpose for which the supplier declared it would perform - eg via advertising, packaging or during discussions with the salesperson.

For more information on consumer guarantees, see ACCC's video or visit the Department of Commerce's publication.

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Provision of services

As a provider of services, you are guaranteeing your customers that your service will be:

• performed with due care and skill;
• fit for purpose; and
• performed within a reasonable time frame, where a time for performance is not specified.

When providing the service, you are guaranteeing that you will:

• use an acceptable level of skill or technical knowledge; and
• take all necessary care to avoid loss or damage.

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Common myths about consumer guarantees

How well do you know your obligations in relation to consumer guarantees?

Try our quiz below to test your knowledge!

A consumer brings back a good seeking a remedy. The good is no longer in its original packaging, or the packaging is damaged. The supplier does not have to provide the consumer with a remedy.

• Answer: Myth!  A consumer's right to a remedy for a breach of a consumer guarantee is not affected by terms and conditions set by the supplier or manufacturer. A consumer is always entitled to a remedy if a consumer guarantee has been breached.

A consumer is not entitled to receive a refund or exchange on a good if they cannot produce their receipt of purchase.

• Answer: Myth!  A supplier must accept alternative proof of purchase, such as a credit card statement showing a purchase from that store. If the consumer can prove they bought the good from the shop, then they are entitled to a remedy from that shop.

The consumer is responsible for seeking a remedy from the manufacturer of the good. As a supplier, I do not have to help the consumer get a remedy from the manufacturer.

• Answer: Myth! As the supplier, you are responsible for providing the consumer with a remedy, regardless of whether the problem is because of a manufacturer's fault. It is not acceptable to direct the consumer to the manufacturer for a resolution to their problem. Visit the Department of Commerce's website for information on how to deal with manufacturers on behalf of the consumer. 

I do not have to provide the consumer with a remedy if I display a no refund or no exchange sign in my shop.

• Answer: Myth!  Suppliers must be careful not to display signs that mislead consumers about their rights. A consumer is entitled to a remedy in all instances where a consumer guarantee has been breached. The Department of Commerce has developed a valid refund sign or you can request a sign be sent to you by calling the Department of Commerce on 1300 30 40 54. 

Not all goods and services are subject to statutory consumer guarantees.

• Answer: Truth! Goods and services purchased before 1 January 2011 are not subject to the statutory consumer guarantees under the Australian Consumer Law. However, guarantees contained in the old Trade Practices Act 1974 may apply to these goods and services. For more information click here.

• Some goods and services purchased after 1 January 2011 are excluded from the provisions about consumer guarantees. As an example, goods bought at auction and some secondhand goods are subject to some, but not all, consumer guarantees. For example, the guarantee that there is no third party claim to the goods (e.g. charges or encumbrances) still applies to these auctioned goods. 

• Another example where some, but not all consumer guarantees apply, is to the services of a qualified architect or engineer. In this example, the guarantee that a service will be fit for specified purpose does not apply.

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What's next....

• Watch the ACCC's video.
• Download the Department of Commerce's publication - consumer guarantees
• Product warranty information
• Unsolicited consumer agreements
• Remedying problems with goods
• Remedying problems with services
• Manufacturer and importer responsibilites

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