Faulty Products in Australia: Refund, Repair or Replacement Rights

A practical guide to Australian Consumer Law remedies for faulty products, including major and minor failures, refunds, repairs, replacements and compensation.

Australian Consumer Law (ACL) gives consumers automatic guarantees when they buy products in Australia. If a product is faulty, unsafe, significantly different from its description or unsuitable for its usual purpose, the seller may have to provide a repair, replacement, refund or other remedy.[S1]

These rights apply in Victoria as part of the national ACL. They are not limited to the length of a written warranty: the product must meet the consumer guarantees for a reasonable period, having regard to factors such as its type, price and expected use.[S1]

What consumer guarantees cover

Products must generally be of acceptable quality. This means they should be safe, durable, free from defects, acceptable in appearance and fit for their ordinary purpose.[S1]

A product must also:

• Match its description, sample or demonstration model.[S1]
• Be fit for a particular purpose that the consumer told the seller about before buying.[S1]
• Meet any express promises or representations made by the seller or manufacturer.[S1]
• Come with spare parts and repair facilities for a reasonable period where the manufacturer or importer is required to provide them.[S1]

A business cannot avoid these guarantees by saying that the product is sold with no refunds, no returns or no warranty. A written warranty against defects may provide additional protection, but it does not replace or restrict ACL rights.[S1]

Major or minor failure?

The remedy depends largely on whether the problem is a major failure or a minor failure. The label is based on the seriousness and consequences of the problem, not merely on the cost of the product or the number of days since purchase.[S1]

What is a major failure?

A product has a major failure if, for example, it is unsafe, substantially different from its description or sample, cannot be used for its normal purpose, or cannot be fixed easily within a reasonable time.[S1]

A major failure can also exist where the product has one serious defect or several smaller defects that would have stopped a reasonable consumer from buying it had they known about them beforehand.[S1]

If the product has a major failure, you can choose between:

• A refund; or
• A replacement of the same type of product.[S1]

You may instead keep the product and seek compensation for the reduction in its value caused by the failure.[S1]

A refund for a major failure should generally be the amount paid for the product, without a deduction for the use you have already had. It should normally be made using the original payment method unless you agree to another arrangement.[S1]

What is a minor failure?

A minor failure is a problem that does not amount to a major failure. The seller must generally fix the problem, such as by repairing the product, within a reasonable time and without charging you.[S1]

For a minor failure, the seller does not normally have to offer a refund or replacement immediately, although it may voluntarily do so.[S1]

If the seller does not fix the problem within a reasonable time, you may be able to have the product repaired elsewhere and recover reasonable costs, or reject the product and seek a refund or replacement, depending on the circumstances.[S1]

The seller may also have to provide a remedy if the first repair attempt does not resolve the problem or the repair creates a significant additional problem.[S1]

Who should you contact?

Start with the retailer or other business that sold you the product. The seller has responsibility for dealing with a valid consumer-guarantee claim and cannot simply refuse assistance by telling you to contact the manufacturer.[S1]

A manufacturer or importer may also have obligations, including responsibility for certain guarantees and reasonably foreseeable loss caused by a manufacturing defect.[S1]

The seller may ask for proof of purchase. A receipt is useful, but other evidence—such as a bank statement, online order record, warranty document or retailer account history—may also help establish the purchase.[S1]

A practical step-by-step approach

1. Stop using an unsafe product

If the product is dangerous, stop using it and keep it in its current condition where practical. Record the symptoms, damage and any safety issue with photographs or video.

2. Gather your evidence

Keep the receipt or other proof of purchase, product description, advertising, warranty documents, correspondence and records of repair attempts. Note when the problem first appeared and how it affects ordinary use.

3. Make a clear written request

Contact the seller in writing and explain:

• What you bought and when you bought it.
• The problem and when it appeared.
• Why the product does not meet a consumer guarantee.
• Whether you say the failure is major or minor.
• The remedy you want.

For a major failure, state that you are rejecting the product and choosing a refund or replacement. For a minor failure, request a free repair within a reasonable time.[S1]

4. Give reasonable access for inspection

The business may need to inspect or test the product before deciding how to respond. Cooperate reasonably, but ask for written confirmation of what will happen, who will pay transport costs and how long the assessment is expected to take.

5. Escalate if necessary

If the seller refuses or does not respond, send a concise follow-up letter setting out the guarantee, the remedy requested and a reasonable deadline. You can then seek help from Consumer Affairs Victoria or consider a claim through the appropriate Victorian tribunal or court process.

Can you claim compensation?

A consumer may claim compensation for reasonably foreseeable loss or damage caused by the business’s failure to meet a consumer guarantee.[S1]

Examples can include reasonable expenses incurred because of the fault, such as necessary transport, inspection or related replacement costs, depending on the evidence and circumstances. Compensation is generally intended to put you in the financial position you would have occupied if the problem had not occurred.[S1]

Keep invoices, receipts and other records showing the loss. A claim is stronger when the cost was a direct and reasonably foreseeable consequence of the faulty product and was not caused by your own misuse or failure to take reasonable steps.[S1]

Situations that may limit your remedy

Consumer guarantees do not usually require a business to fix a problem caused by misuse, accidental damage or ordinary wear and tear. The business may also have a stronger defence if you knew about the defect before buying or examined the product and the defect should reasonably have been discovered.[S1]

A change-of-mind return is different from a faulty-product claim. A retailer may choose to offer change-of-mind returns, but the ACL guarantees are concerned with whether the product met the required standards when supplied and during its reasonable life.[S1]

Bottom line

For a serious product failure, you generally choose a refund or replacement. For a less serious failure, the seller generally gets a reasonable opportunity to repair it. Keep evidence, deal first with the retailer and describe the remedy you are seeking clearly.[S1]