Your Obligations When Products or Services Fall Short 

In business, there are fundamental rights called consumer guarantees that govern the relationship between a business and its customers. These guarantees ensure that if products or services do not meet reasonable expectations, the customer can seek a solution. But if a business ignores or misleads customers about these rights, it can lead to legal consequences. 

 

What Are My Duties as a Business If There Is a Problem with a Product or Service? 

 

Consumer Rights and Guarantees 

When purchasing products or services, consumers have the right to expect a certain level of quality and performance. In consumer law, these basic rights are called consumer guarantees and are protected by Australian Consumer Law. Failure to uphold these rights can lead to legal consequences and tarnish your business reputation. 

 

Repair, Replace, Refund, Cancel 

When faced with product or service issues, businesses must act swiftly to offer solutions. This can include repair, replacement, refund, or cancellation. Additionally, businesses are prohibited from directing consumers to the manufacturer or importer for resolution. In cases of major problems with a product, consumers have the option of receiving a refund or replacement, while for services, consumers can adjust the agreement with the service provider. Businesses must address minor problems through free repairs. Furthermore, if the issue stems from the manufacturer’s fault, businesses are entitled to reimbursement from the  manufacturer for the costs incurred in providing the consumer with a solution.

 

Compensation Claims 

In the event of customer dissatisfaction or financial loss due to product or service failures, compensation becomes paramount. The aim of compensation is to restore consumers to their pre-problem financial state. By doing so, you not only fulfil your legal obligations but also reinforce trust and confidence in your brand. 

 

 

Repair Notices 

Before embarking on any repairs, it’s crucial to provide customers with clear and timely repair notices. Whether it involves products storing user data or repairs with refurbished parts, transparency ensures that customers are informed and empowered to make informed decisions about their purchases. These repair notices must adhere to specific guidelines regarding content, timing, and method of delivery. 

 

Warranties 

Businesses make warranties to provide additional assurances regarding product quality and problem resolution, supplementing consumer rights for repair, replacement, refund, or cancellation. It is imperative for businesses to uphold their warranties, ensuring they contain specific defect-related information, while refraining from coercing or deceiving consumers into purchasing extended warranties. 

 

 

Key takeaways 

  • Businesses must comply with Australian Consumer Law and uphold consumer guarantees. 

 

Gladwin Legal are experts in Consumer Law and have extensive experience in advising businesses. If you require assistance in understanding your legal obligations please contact us at or 1300 033 934.