Do I Need to Offer Warranties for my Online Business?

I admit, I have an online shopping problem. Like many Australians, I have been known to purchase everything online from food to clothing, furniture and holidays. I have even purchased professional services online such as accounting and legal.

So, is there anything that I won’t purchase? Yes. I won’t buy from a business who in my professional shopping opinion, looks dodgy. And how to I determine this? I see how the business treats customers who have an issue with the product. Or more generally, I look for what warranties the business provides that I am getting what I thought I was purchasing.

If you operate an online business, you will need to understand your responsibilities regarding consumer guarantees and warranties. Below, we outline what your business will need to include to comply with Australia’s consumer law.

Consumer Guarantees

Consumer guarantees apply to many products and services Australian businesses sell online, and include:

• Sellers have the right to sell the goods or services.
• Products or services supplied are of acceptable quality.
• Products match their description, particularly relevant for online businesses where the customer cannot see the product before purchase.
• Goods are fit for a particular purpose that the consumer makes known. This would apply to online sales where a consumer may have access to online chat facilities, or where you receive an email enquiry.
• Repairs and spare parts of the products are reasonably available.
• Services are carried out with reasonable care and skill.

The consumer guarantees apply regardless of any additional warranties that you may offer your products or services, and extend to second-hand goods.

Warranties

Depending on what goods or services you offer, and the industry you operate in, you may consider providing additional warranties to your customers. A warranty is simply a voluntary promise that you offer to you customers regarding your products or services. Online businesses commonly offer the below warranties:

• Free return of products: Online businesses selling non-perishable goods that can easily be resold such as clothes, homewares and even electrical products typically offer this warranty.
• Manufacturer’s warranty or warranty against defects: This means that the seller will repair or replace a product (or part), resupply or fix a problem with a service, or provide compensation. Examples include a ‘two-year warranty’ or a ’12-month replacement guarantee’. You will need to understand the rules governing warranties against defects, and how to present them to your customers. Please see the Australian Consumer Law for additional information.
• Extended warranty: An extended warranty is an offer to extend the length of time of the manufacturer’s warranty. You need to ensure that you don’t mislead your customers into thinking that they are required to pay for rights automatically provided under the consumer guarantees.

Importantly, offering your customers a warranty will be in addition to their rights under the consumer guaranties. Your warranty cannot limit or replace those guarantees.

Understanding the difference between a consumer guarantee and a warranty ensures that your business not only complies with Australia’s consumer law but also, remains competitive in the online space.

Questions? Get in touch with LegalVision’s specialist consumer lawyers on 1300 544 755.