Do you offer a ‘lifetime warranty’?
In 2016 and 2017, electronics manufacturer Belkin sold consumers products such as cables and switches, with a “lifetime warranty” or “limited lifetime warranty” when it actually applied a policy of only repairing or replacing these products within five years from the purchase date.
Belkin did not include a disclaimer on the products clarifying the five year warranty period, but referred to their website which did contain the disclaimer.
The ACCC has accepted a court-enforceable undertaking by Belkin to honour the lifetime warranty policies for the lifetime of the original purchaser.
Be careful about the way you word your warranties against defects. It is very easy to breach the Australian Consumer Law (ACL) by either breaching the Consumer Guarantees, engaging in misleading or deceptive conduct and breaching ACL formalities regarding warranties.
Our top tips for wording your warranties against defects:
- Be transparent about the warranty you are offering.
The Belkin case above highlights the importance of wording your warranties carefully. Lifetime warranties are for the lifetime of the purchase! You may be liable for misleading or deceptive conduct if you do not honour your warranties.
- State that your warranty against defects, or manufacturer’s warranty operates in addition to Australian Consumer Law.
There are a number of formalities required by law that a warranty must include, including what remedy you are offering (repair or replacement), what the consumer must do to claim the warranty, the warranty period, who covers any expenses in claiming under the warranty, your company details and contact details and the following statement:
Our goods come with guarantees that cannot be excluded under the Australian Consumer Law. You are entitled to a replacement or refund for a major failure and compensation for any other reasonably foreseeable loss or damage. You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure.
While this is also a mandatory statement required by law, it also helps to illustrate that you are not breaching the Consumer Guarantees by limiting them to the warranty period you have offered them.