Right back at you: faulty products and online shopping

Australians are shopping online more than ever. In 2012-13, more than three quarters of our 15.4 million internet users made an online purchase or order. Choice, convenience, cost – the benefits are clear. But it’s important to also be aware of the potential drawbacks when it comes to consumer protections.

Home remedies

If you purchase something online from an Australian business, you have the same refund rights as when you buy from a brick-and-mortar shop. Under the Australian Consumer Law (ACL), any item purchased online is covered by ‘consumer guarantees’.

If the product is faulty, you have the right to the following:

  • repair, replacement or refund
  • compensation for damages and loss (if any).

The ‘remedy’ depends on whether the fault or problem is major or minor. If the fault is minor, the company is entitled to offer you a replacement or free repair; you can’t reject their offer and ask for a refund. However, you can request a refund if the replacement or repair is not available within a reasonable timeframe. If the fault is major, you can ask for a replacement or refund.

Private seller

If you purchase an item online from a private individual or seller who is not running an online business (for example, via eBay or Gumtree), the ACL does not apply. Be sure to carefully read the seller’s refund and returns policy on their website or profile before buying.

Both eBay and Gumtree provide options for contacting the seller to complain or negotiate a solution if the product is faulty. Some larger companies, such as eBay, also have dispute resolution procedures, but many websites may not be able to help if problems occur when you buy privately.

Payments and refunds

Make sure you read the supplier’s terms and conditions before making an online purchase. Reputable sellers will have secure payment and refund systems. For example, PayPal has both a Refunded Returns service and a Resolution Centre where you can file a dispute. If you pay online with a cash transfer or credit card, it may be more difficult to organise a refund.

Foreign companies

The ACL may not cover online purchases from foreign companies. While, legally, you may be able to chase a foreign company for a refund, repair or replacement of a faulty product, in practice, this may be very expensive and difficult to pursue and enforce.

Companies must comply with the consumer protection laws of their own country. So, when shopping online from a foreign retailer, make sure you read the refunds and returns policy on their website. 

Damaged in transit

If your purchase is damaged in transit, you may be entitled to a refund, repair or replacement, depending on the extent of the damage. Make sure you take clear, dated photographs before sending the damaged item back. The online store is responsible for resolving any issues with the courier or postage service used to deliver the product to you.

Return to sender

If you’re unable to return the faulty product in person, ask the supplier if they have a complimentary pick-up or return policy.

If you need to post the item back, you may need to cover the initial postage or freight costs. Be sure to keep the receipt; if the product is subsequently confirmed to have a fault, you can recover reasonable costs of postage, freight or transportation from the supplier.

If the product is too large, heavy or difficult to move or post (e.g. a bed or a large dishwasher), the supplier should cover the shipping or freight costs.

Repairs

Generally, the online store is responsible for returning the faulty product to the manufacturer for repair. The store may wish to first examine the item to determine the problem and possible remedy.

If the online store can’t arrange repairs – or is unable to repair the product within a reasonable timeframe – you can get someone else to repair it, then request that the store reimburse you for reasonable costs. Alternatively you can ask for a refund or replacement.

Advice for shopping online

  1. When shopping online, only buy from retailers and sellers that:
    • have a good reputation
    • use high-quality photos
    • provide clear product descriptions and instructions for use
    • clearly state their processes for repairs, replacements and refunds
    • clearly outline their methods for dispute resolution
    • display their registration and contact details (email, phone, fax, physical address)
    • display their systems or methods of security for protecting your personal and financial details; and
    • provide an age-grading on children's products.
  2. Read the fine print, including terms and conditions regarding the purchase (e.g. hidden costs).
  3. Google and shop around: compare different products and prices on different websites. Note their conditions, postage, returns and refunds policies.
  4. Research online product reviews.
  5. Check independent consumer websites such as the ACCCTGA and state consumer protection websites to see if there have been problems or bans based on breaches of Australian safety standards.
  6. Keep copies of all your online transactions in case of problems.

Shopping online is becoming the norm. Don’t get caught out: know your rights and obligations and be sure to get what you paid for.

Trang van Heugten is a senior associate in Maurice Blackburn's Melbourne office.

TOPIC: Consumer protection
RELATED LEGAL SERVICES: Consumer protection

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