Online Retailers Defy Consumer Law

Updated: Nov 5

‘We stand behind the products we sell.’ Blazoned across every from of advertising by a chain of home appliance stores called Chandlers it convinced consumers they were better than their competitors. In truth, all retailers are required to stand behind the products they sell, and this is enshrined in Australian consumer law. Sadly, Chandlers are no longer in business and this legal obligation is being ignored by a new type of retailer.

Once upon a time, shopping was a face-to-face experience that involved travelling to a store where you could see, feel, and if necessary, try before you buy. If what you bought was faulty or failed to meet your expectations, you simply returned to where you bought it. Provided you kept the receipt, and your complaint was legitimate you could expect the matter to be resolved without too much trouble. They might offer a replacement, a credit, your money back or arrange for it to be repaired free of charge. But whatever the solution, it was and the retailer’s responsibility to make the decision. For the record – nothing has changed.

The internet brought us ‘online shopping’ and with the Covid-19 pandemic it has been booming. Unable to inspect or try before you buy, consumers are left to rely on visual images, brand reputation, recommendations, and a good deal of trust. Unfortunately, this explosion in online shopping has seen the emergence of a new low-cost business model; one without a ‘bricks and mortar’ store, or separate business premises. These retailers only sell goods online. They typically operate from home or a tiny hole in the wall office, they employ no sales staff and carry no inventory. They use their website to sell products they source from 3rd parties (sometimes referred to as a ‘marketplace’). Although you buy from them and pay them for the goods, your purchases are sent directly to you by their 3rd party supplier.

While the way we shop may have changed, our rights and protections under Australia’s consumer laws have not. But unfortunately, most consumers only have a vague understanding of their legal rights; something these operators rely on when dealing with product complaints. Rather than resolve complaints as required by law, they refer the matter to their supplier and instruct the customer to communicate with the 3rd party.

Do not be fooled by this tactic. The Trade Practices Act applies unilaterally and surpasses any terms and conditions of sale even if published. It does not matter if an item was purchased from a physical store or from an online retailer; if the buyer is dissatisfied with the product, then responsibility to assess and resolve the complaint rests with the seller (retailer) and not their supplier. Whatever the arrangement between the retailer and supplier or how the retailer is compensated by the supplier is for them to negotiate.

So, if you have a product complaint, raise it with the retailer regardless of it being a physical store or an online store. They are responsible for resolving the matter and if they attempt to pass you off to the manufacturer or supplier, then stand your ground. If necessary, contact the Department of Fair Trading in your State. This will not guarantee the solution they offer will be satisfactory and if that is the case then again you should contact the Department of Fair Trading in your State.

Good retailers invest time and effort in selecting the products they offer for sale and subject their suppliers to strict quality control standards and have agreements in place for dealing with faulty goods. Like it or not – all retailers must stand behind the products they sell, and the law requires them to do so.

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