It's the time of year when retailers are promising big discounts. But while there are definitely bargains to be found, if you're buying a big-ticket item like a TV or a fridge, CHOICE experts say you should beware the extended warranties that salespeople will no doubt be trying to push on you (and if you're shopping online, watch out for 'extended care' products being automatically added to your cart).
"When you buy something like an expensive TV, salespeople will often try to sell you an extended warranty or 'extended care' that promises to protect you if something goes wrong with the product you've purchased," says CHOICE editorial director Marg Rafferty.
In many cases, the purchase of an extended warranty means you'd be paying for rights you already have
"But before you hand over that extra cash, you should know you already have rights under the Australian Consumer Law that will cover you if there's a fault or issue with your product."
And in many cases, the purchase of an extended warranty means you'd be paying for rights you already have.
"When we looked at the details of many of these extended warranties, we found that they don't give you much more than you're already entitled to under Australian Consumer Law," says Marg.
CHOICE mystery shop found misleading sales techniques
Last year's mystery shop of Harvey Norman, JB Hi-Fi and The Good Guys stores conducted by CHOICE revealed how often customers are given incorrect information about their consumer rights.
We called salespeople at 80 stores – belonging to Harvey Norman, JB Hi-Fi or The Good Guys – posing as a customer looking to buy a TV priced at $1850. We asked what would happen if there was an issue with our TV after the warranty had expired (as with most TVs, the ones we mystery-shopped comes with a one-year manufacturer's warranty).
More than 71% of stores in our mystery shop got it wrong when questioned about a consumer's rights to a remedy if their product developed a fault outside the warranty period
Some retailers offer two years' voluntary warranty on products in this price range (including the manufacturer's warranty), so if this was mentioned, our callers also asked what would happen if the TV broke down shortly after this warranty ended.
Shockingly, more than seven in 10 (71%) stores in our mystery shop got it wrong when questioned about a consumer's rights to a remedy if their product developed a fault outside the warranty period.
"Under Australian Consumer Law, if that expensive TV you bought breaks through no fault of your own after just a few years, for example, the retailer must offer to fix it, replace it or give you your money back – the choice of remedy is yours. This holds true even if the manufacturer's warranty has expired and you didn't buy an extended warranty," says Marg.
Our mystery shopper also found that, when asked about consumer rights outside the manufacturer's warranty period, often the conversation turned immediately to the benefits of an extended warranty. In fact, 73 of the 80 salespeople we spoke to offered to sell us one.
Only when specifically asked about rights without an extended warranty was it acknowledged that we already had rights under consumer law.
Know your rights
Australian Consumer Law (ACL) covers you when you're buying or paying for goods, just like it does for services. You have certain legal guarantees as a consumer, and steps you can take to resolve an issue if you have one.
You may be able to get a repair, replacement or refund if what you bought doesn't meet one of these guarantees. The remedy available depends on whether the consumer guarantees failure is minor or major.
To find out more about what steps to take if you have an issue with a product you've bought, or how to figure out if you have a minor or major failure of your consumer guarantees, check out our guide to your consumer guarantees.
Sale items are covered too
Crucially, for this time of year, the consumer guarantees also cover any items you buy in sales. The guarantees may even cover second-hand products, depending on their age and condition.
Did you know?
- Signs that say things like "No refunds", "No refunds on sale items" or "Exchange or credit note only for return of sale items" aren't legal.
- Retailers can't fob you off to the item's manufacturer – they're obliged to resolve your issue themselves.
- You should be told if a replacement is second-hand or if the business has used refurbished parts to repair it.
- Repairs must be made within a reasonable time. Mobile phones and fridges, for instance, must be given high priority, or you can demand a replacement.
- You don't have to return a product in its original packaging.
We're on your side
In more than 60 years of making a difference for Australian consumers, we've never taken ads or sponsorship.
Instead we're funded by members who value expert reviews and independent product testing.
With no self-interest behind our advice, you don't just buy smarter, you get the answers that you need.
You know without hesitation what's safe for you and your family.
And you'll never be alone when something goes wrong or a business treats you unfairly.
Learn more about CHOICE membership today
Stock images: Getty, unless otherwise stated.
