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Retailers misleading customers and pushing unnecessary extended warranties

Retailers Harvey Norman, JB Hi-Fi and The Good Guys are providing misinformation about consumer’s legal rights and are trying to sell extended warranties that offer little more protection than Australian Consumer Law, a Choice investigation has revealed.

The Choice study was conducted through a mystery shopper who visited 80 Harvey Norman, JB Hi-Fi and The Good Guys stores across Australia – the three biggest electrical retailers.

The investigation found 71 per cent of stores provided wrong or misleading information about a consumer’s rights if there was an issue with a product beyond the warranty period.

And 91 per cent were also trying to upsell customers with expensive extended warranties that offered no more for the customers than their rights under Australian Consumer Law.

According to Choice, some stores even went so far as to argue that customers had to pay for repairs themselves after two years and there was nothing they could do after the manufacturer’s warranty expired.

“it’s out of our hands,” was one store’s response while another said, “if something happened after one year unfortunately it’s at your own cost”.

Choice editorial director, Marg Rafferty said: “We were shocked by the results of our mystery shop of Harvey Norman, JB Hi-Fi and The Good Guys.

“Consumer guarantees mean retailers must help customers if a product breaks within a reasonable period of time – even if the manufacturer’s warranty has expired,” she said.

“When we asked about consumer rights outside the manufacturer’s warranty period, stores tried to sell us extended warranties, which are not much more than a sneaky sales tactic designed to squeeze more money from concerned customers.

“Existing consumer rights provide all the protection you need against faulty products, so it’s incredibly disappointing to see these big retailers pushing poor value extended warranties onto consumers during a cost-of-living crisis.”

So what are your rights under Australian Consumer Law:

If a product fails, you are entitled to either a repair, replacement, or refund.

– If a product isn’t of acceptable quality, the retailer can’t charge you to fix it.

– Retailers can’t just refer you to the manufacturer. You are the store’s customer and they must act on your behalf.

– Two or more minor faults can equal a major failure.

– If you have a bulky item like a TV or appliance that needs repair or replacement, the retailer should pay the transportation costs.

– You should be informed if a replacement is second-hand or if refurbished parts have been used.

– Repairs must be made within a reasonable time – in days, not weeks.

– You can still return a faulty product even if you still don’t have the original packaging.

– If you’ve lost a receipt, you can still show proof of purchase with a credit card statement, confirmation or receipt number from an Internet or phone transaction.

– Extended warranties are often not necessary as they may not cover much more than the Australian Consumer Law.

– Check the store’s refund or exchange policy before you buy the item. Some larger stores may give you a credit note or offer an exchange even if you change your mind.

– If you think you are entitled to a refund, but the retailer still refuses to give you one, contact the Office of Fair Trading in your state or territory.

When is it NOT possible to get a refund or replacement:

– If you’ve misused the item and broken it as a result of that misuse.

– If you’ve simply changed your mind.

– If you’ve seen it cheaper elsewhere.