ACCC slams retailers with $19,000 fine for denying consumers’ right to refunds on receipts

Retailers are being warned to clearly display customers’ rights regarding refunds and exchanges during the Christmas trading period after three clothing chains were fined $19,800 by the Australian Competition and Consumer Commission for printing incorrect information on receipts.

The warning comes as new laws are set to come into effect on January 1 which clarify how retailers are mandated to display customers’ rights regarding refunds and exchanges.

M Webster Holdings, trading as David Lawrence, Jigsaw and Marcs were ordered by the ACCC to pay a total of $19,800 for stating on receipts and on in-store signs that they would not offer an exchange, refund or credit on sale goods – a practice ACCC chairman Graeme Samuel slams as completely incorrect.

“Retailers cannot exclude a consumer’s right to a refund or exchange simply because goods are bought on sale,” Samuel says.

“The essential thing was that they had signs in stores saying they would give no refunds or exchanges. If a product is defective, then it doesn’t matter, refunds and exchanges are an obligatory part of sale on the part of the supplier.”

Samuel says the use of signs, or notices on receipts, that say products won’t be exchanged can lead consumers to believe they won’t be able to make an exchange or refund in any and all circumstances, which is untrue.

“We’ve seen in retail stores signs saying that there will be no exchanges or refunds, when what the retailers might be referring to is that there is no exchange or refund on sale items as part of a normal goodwill policy. But of course, they are obliged to if the product is faulty.”

From January 1, retailers will be obliged to follow a new consumer guarantees regime, which includes certain guidelines including that goods must be of an acceptable quality when sold, fit for the specified purpose and matching any description.

Samuel points out that these new guidelines don’t actually change the current laws, they simply clarify them further. He says that consumers will be eligible for a refund or exchange if the product does not meet a certain standard, doesn’t perform the specified duty or does not meet a description – and in-store notices need to reflect these guidelines.

“This is important around this time of year… if businesses want to get details on January 2011 regulations, they can look at the ACCC website, but the law hasn’t dramatically changed. It simply states that if the product is not of good quality, if it is not fit for use or subject to a major defect, then the seller is obliged to supply a new product or refund it.”

“This is a timely reminder for all retail stores to review their refund or returns policies to ensure that the policies offered to consumers do not contravene the Act, particularly with the second phase of the Australian Consumer Law taking effect on New Year’s Day.”