Christmas is around the corner, which means retailers are getting ready for the busiest period of the year. What better time for a quick refresher on some consumer law issues? Here are a few tips to make sure Santa (the Australian Competition & Consumer Commission) doesn’t bring you a lump of coal (an infringement notice).

Advertising

• If you are advertising a product at a low price to get customers in the door, make sure you have enough stock to meet demand for the goods over a reasonable period of time. Otherwise, this will amount to unlawful ‘bait’ advertising.
• Be very careful using comparative advertising. If you have discounted a product and want to use a ‘was/now’ comparison, you must have sold (not just advertised) the goods at the ‘was’ price a reasonable number of times, and for a reasonable period, before running the promotion.
• Be upfront with the total price. Don’t engage in ‘drip’ pricing, by stating a headline price and then adding unavoidable fees/charges once the customer has expressed interest at the headline price.

Consumer guarantees

• Consumer goods come with certain guarantees that can’t be excluded. These guarantees include that:
  • the goods will be of acceptable quality (unless you specifically draw the issues to the customer’s attention);
  • the goods will be the same as a sample or demonstration model; and
  • the goods will be fit for any purpose you have advertised.
• Don’t try to exclude the guarantees, whether through a written policy, a ‘no refunds’ sign or in discussions with the customer. Any part of a contract that attempts to do that will be void.
• If the guarantees are not complied with, the customer is entitled to a remedy. These are generally either a repair, replacement or refund.
• The type of remedy depends on whether the failure is ‘major’ or not. If ‘major’ (eg. a reasonable customer would not have bought the goods), the customer can dictate the remedy they want. Otherwise, you can generally decide which remedy to provide (though it must fix the problem).
• You are responsible for providing the remedy even if you are not the manufacturer or importer. However, you may have a right of indemnity against the manufacturer/importer for costs you have incurred (though there are strict time-frames).

Product safety

• Some goods cannot be sold unless they meet mandatory standards. Make sure you check these standards, as well as any bans in place, against the items you are selling.
• If you sell goods that may have caused a serious injury or death, you must notify the ACCC within two days of becoming aware (and weekends count). A compulsory recall may then be ordered for the goods (but we would recommend you stop selling immediately and take steps to recall the goods anyway).
• You can initiate a voluntary recall of goods. If the recall is because of the potential for injury, you must notify the ACCC within two days of starting the recall (and weekends again count). The notice must set out the problem with the goods and tell consumers what they should do. If the manufacturer/importer initiated the recall, you should stop selling the goods immediately, comply with the directions in the recall notice and speak to them about how to address the issue.

If you have a query relating to any of the information in this piece, or you would like to speak with a member of Holman Webb's Business, Corporate and Commercial team with respect to a matter of your own, please don't hesitate to get in touch today.