Retailers are being urged to review their return policies after retail group M Webster Holdings was fined $19,800 by the Australian Competition and Consumer Commission for misleading consumers.
Webster owns fashion brands David Lawrence, Jigsaw and Marcs. It was fined after all three stores issued receipts and displayed signs stating no exchange, refund or credit would be given on sale goods from August 2008 to July 2010.
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ACCC chairman Graeme Samuel says retailers cannot exclude a consumer’s right to refund or exchange simply because goods are bought on sale.
“There are a number of statutory warranties and conditions implied into every consumer contract, which sellers of goods are unable to contract out of regardless of whether or not the item is on sale,” Samuel said.
“No refund signs or notices of this nature may mislead consumers to believe that they have no right to a refund, exchange or credit on sale goods in any circumstances, which may be untrue because the consumer may be entitled to such remedies.”
Under a national consumer regime introduced this year, the ACCC has the power to issue infringement notices, which have already been used on several occasions against restaurants.
Each infringement notice carries a $6,600 fine. If businesses fail to comply, it can lead to litigation in court and higher damages.
On January 1, 2011, the second phase of the national consumer law regime comes into effect, replacing the statutory warranties and conditions with consumer guarantees in a bid to protect consumers.
Samuel says the Webster case should serve as a timely reminder for all retail stores to review their refund or return policies to ensure the policies offered to consumers do not contravene the act.
The ACCC has developed materials to assist businesses to understand and comply with the new consumer guarantees regime, including an online education module and publications.
The corporate watchdog is urging businesses to act to ensure they are aware of how the new law affects their practices.
For more information, including the online education module for store owners, managers and sales staff, visit www.accc.gov.au/consumerguarantees.