In March this year, the Federal Court in Australia ordered Booktopia to pay $6 million in penalties for making false and misleading representations on its website in relation to its refund policy. This is a stark reminder for all Australian businesses to comply with the Australian Consumer Law (ACL) or face the risk of investigation and enforcement action by the ACCC for non-compliance.
A Reminder on complying with the ACL
Under the ACL, consumers are given certain rights that cannot be excluded or modified. These are called consumer guarantees and include that products must be of acceptable quality, fit for purpose and match their description (to name a few). Consumers are entitled to return faulty products within a reasonable time and receive a refund, repair, or replacement, depending on the nature of the fault.
Booktopia restricted, and in some cases removed, the ability for consumers to access a refund, repair, or replacement.
What happened in the Booktopia case?
Booktopia is an online bookstore that sells physical books, magazines, calendars, stationary, games, eBooks and more to Australian consumers. Between January 2020 and November 2021, Booktopia made misleading claims in its terms of business.
They claimed that customers were only entitled to a refund, repair or replacement if they notified Booktopia within 2 business days of delivery. They also refused refunds for digital products, like eBooks, for any reason.
Booktopia acknowledged that they told at least 19 consumers during customer service calls that the company was not obligated to provide a refund or remedy because the shopper had not raised issues within 2 days of delivery.
As noted above, under the ACL consumers have the right to expect products to be of acceptable quality and are entitled to return faulty products within a reasonable time (not 2 days) and receive a refund, repair, or replacement, depending on the nature of the fault.
The Outcome
The ACCC initiated court action against the book retailer and the Federal Court ordered Booktopia to pay $6 million in penalties. The court also ordered them to publish a notice on their website within 21 days acknowledging the contravention, correcting the misleading claims, and establishing a consumer law compliance program.
What does this mean for you?
If you operate a business within Australia, then it is likely you fall under the operation of the ACL. This means there are consumer guarantees and rights that you cannot exclude, limit, or modify.
Please check your refund policies to make sure that you are not falling short of the ACL. If you need a helping hand, check out the Cherrypicka refund policy.