7 Tips on Consumer Law for New Business Owners

The advent of the Internet has allowed many people to start up business buying and selling. These people are often not trained in business, so don’t know all the laws that govern them. Without commercial lawyers to help them they can easily break a consumer law without realising it, but ignorance is not considered an excuse, so they may still find themselves in trouble.

Since many of those Internet businesses are to do with selling goods of some kind to the public, here are 7 tips on Australian Consumer Law (ACL) that you may not have known, if you are a new start-up business.

  • If a customer finds a small defect or flaw in the good they purchased, they can ask for a refund, repair or replacement. Most will want the former, but in fact, your customer must accept the free repair if it is offered to them. It is only if the flaw makes the product dangerous or unsafe, if the product is different from what was advertised or displayed, if the product can’t be fixed easily or if the person would not have bought the product had they known about it, that your business must replace or refund it.

  • While some stores offer a 30 day money-back no questions asked guarantee, your business is not legally required to do so. The consumer does not have the right to a refund or replacement simply because they changed their mind.
  • Some businesses state the product must be returned in the original packaging. This is not a legal requirement of the Australian Consumer Law. All the consumer needs is their receipt.
  • The ACL states that there must not be a ‘no refund’ policy stated in your business or on your website. That does not mean there is no case for a refund refusal. If the person bought a product from you and was aware of the flaw, they may not be entitled to a refund.
  • As the retailer, you should not direct refund inquiries back to the manufacturer. However, if the fault is a manufacturing one the manufacturer may have to reimburse the customer, but not for the retail price.
  • Many businesses offer extended warranties for an extra cost. In fact, the ACL states that consumer guarantees don’t have a definite expiry date. The length of the expiry date is the time that is reasonable for that product to last.
  • Australian Consumer Laws apply to goods and products sold online just as much as to traditional businesses. So anyone who conducts an Australian business online must ensure they conduct it in line with the relevant laws. However, it does not apply to goods that are sold for more than $40,000.
7 Tips on Consumer Law for New Business Owners
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