We bought a new leather lounge but it had a major defect so the furniture store sent out an inspection supervisor who works for them to view the issue. Following that they sent out an independent assessor and subsequently advised us that they would exchange the lounge for a new replacement. The new lounge we chose was $200 cheaper than the original faulty lounge but they are refusing to refund the difference. Do they have the right to do this?
– Bronwyn, Queensland
Kat says: You will be pleased to know that the business does not have the right to refuse your refund in the circumstances you’ve described. Where there is a major problem identified, the Australian Consumer Law clearly entitles you to a replacement that is either identical to the product you purchased or of a similar value if it’s a different product.
The business seems to have taken the appropriate steps in assessing the major defect in your couch. Under the Australian Consumer Law, a business has the right to assess a product for defects. Assessment of defects is the responsibility of the business, and shouldn’t result in you being out of pocket if the defect wasn’t directly caused by you (for instance, by using your couch in a manner it wasn’t intended for, say, as a trampoline).
So that’s got you over the first hurdle, with the business conceding, with evidence, that there is in fact a major problem. You are also entitled to a refund for the difference in value – getting it is your second hurdle.
Where a major problem is identified, the consumer guarantees kick in. Consumer guarantees are the legal rights you have beyond product warranties, and they cannot be overridden or changed by business policies.
Major problems include where a product is unsafe, very different from the description or sample, has one or more problems that would have stopped someone buying it in the first place, or cannot be used for its intended purpose because of the fault and can’t be fixed within a reasonable time.
For a major problem, the consumer guarantees entitle you to either a full refund, an identical replacement (where one is reasonably available) or, alternatively, a replacement of similar value. You can also choose to keep the product and ask for compensation for the drop in value caused by the problem but you probably wouldn’t do this if a safety concern or major fault means you can’t use it.
You have opted for a replacement but it sounds as though the replacement isn’t of a similar value, as $200 is a significant amount. While I’m not sure why the business won’t refund you the difference, it is worth noting that they are not allowed to deduct the cost of assessment, replacement or your use of the product before the fault was identified from your compensation.
In cases like yours, trying to resolve the issue with the business should always be your first step. Try contacting them again, in writing, laying out your entitlements under consumer law. Include a short timeline of events and any paper evidence you have, such as original receipts, documentation of the couch’s assessment and the lower value replacement, and reiterate your request for a $200 refund.
If the business is still not cooperative, I suggest calling the Queensland Office of Fair Trading for advice. OFT may also be able to act on your behalf to communicate with the business to find a resolution. You can also make a complaint to the Australian Competition and Consumer Commission but it’s likely OFT will be more helpful as a local representative.
Your final option is to take action in the Queensland civil and administrative tribunal but, ultimately, in terms of both your time and money, this is likely to cost you more than the $200 you’re looking to recover, so it’s up to you to decide how dedicated you are to standing on principle.
Letter has been edited for length and clarity
