BEST OF THE REST: New consumer laws

February 11, 2011: A selection from last week`s stories from other online sources which may be of interest to Photo Counter readers…

The Best of the Rest by far this week was a report in PMA Newsline by Yamba Photo Store’s Tania Williams, based on a real-life encounter with an official from the NSW Office of Fair Trading, who was out and about briefing retailers on their new warranty obligations.

We filed a report on the new consumer laws in January, and there’s also a story in this week’s Photo & Imaging News looking at the issue, but Tania Williams well-written and informative piece answers – from the horse’s mouth – some of the questions which must be perplexing retailers and distributors alike about how the new regime will apply.

So we’ve changed the ‘Best of the Rest’ format for this week: We can’t provide a link to the PMA Newsline story (it’s password-protected) but Tania Williams has graciously permitted us to re-publish her story in full:

‘Timing is everything!  I just had a visit at the shop by a very nice fellow from the NSW Office of Fair Trading (OFT) who was calling in to check that businesses in the area have an understanding of the new consumer laws,’ writes Yamba Photo Store’s Tania Williams pictured right).

Once he got over the surprise of me knowing about them (a big credit to you guys [PMA Australia] because apparently we’re the first store of over 30 he’s called into who is aware of the new laws), we had a terrific session going over the detail of the laws, which I thought I’d share in case it’s at all helpful.

The good news…
 
I have to say I am significantly reassured for the most part that we can continue selling hardware and not risk our livelihood in the process. Two key words I had not picked up in the online brochures or in the video are MINOR and MAJOR in relation to problems. For MINOR problems the SUPPLIER gets to decide the remedy (ie, repair/replace/refund).  Only for MAJOR problems does the CONSUMER get to make the choice of remedy.

In relation to digital cameras, the Fair Trading rep said a major problem is a camera not working out of the new box. Pretty much anything else can be argued as minor. In a worst-case scenario, I now understand if a camera failed out of warranty, parts were not available and the consumer requested a refund, a tribunal would pro-rata the original value over the use already obtained. Only that portion remaining would be required to compensate the consumer, not the original amount paid.

The REASONABLE time during which a camera should continue to operate is a grey area. The OFT rep agreed that for a camera costing $199 or less the end of a 1 year waranty period could be reasonable time. However, if a consumer disagrees they can have the matter taken to OFT for a determination to be made. For cameras above that value, again would come down to a ‘discussion’ between the supplier and the consumer.

The less-good news…

On CONSEQUENTIAL LOSS however, it is as bad as it sounds.  My original understanding – that the retailer is responsible for loss of income due to any fault with equipment, is apparently the case. So for example, if a wedding photographer loses income while a camera is inoperable, he or she can claim compensation from the supplier.

There was one other small matter which I also had cleared up in this discussion: Freight charges for equipment returned under warranty.

We have always covered the freight costs but I’m aware of other retailers who do not.  It is now a requirement that the retailer has the repaired/replaced item available at the same place at which the purchase was made, without charge to the consumer. (Or where the product was delivered to, if freight was originally charged). The OFT is actually tightening these regulations, too.

– Tania Williams
The Yamba Photo Store

 

Your Comments

• Posted By Ron Frank02/12/2011 06:26:15 PM

  Gentlemen and ladies I must speak as a speciality retailer of 42 years experiance.Having dealt with John Swainston for many years I can see his point but at the end of the day the law is quite clear. When a consumer purchases from an expert in the field and the item does not perform to reasonable expectation for a fair time then the consumer both amateur and pro has an actionable action against his supplier. In turn the supplier has capacity to enjoin his supplier and or the factory in the action. Where it is shown that the goods were faulty by failure by the factory there is clear damages that will be awarded. It could be argued that the supplier did not sufficiently train the client in the use of the item and then it would be up to the judgement of the refferee as to who would be responsible for damages. I have been to court several times with varius results and clearly remember a case where a client refused the manufacturer the right to further inspect a roll printer and he was awarded $17,000 in loss of profit and the original deal was for a $5000 purchase. Another time a consumer took us to the legal system as she felt that we had charged her 30% took much when a major department store featured the specialised item as a loss leader in their advertising campain when they were unable to merchandise the item. I dug my heels in and won the case so the consumer said at the court well bad luck for you as I will not pay the awarded costs and I told you that I would cost you money do what you like as I am declairing bankruptcy. Retailing has always been charged with many conundrums. My personal answer is to act as I would like to be dealt to in similar circumstances and that philosophy has enabled me to create a decent speciality retail / pro outlet over the past 40 years.Be fair, honest and ethical and you will succeed. Cheers to all Ron Frank Camera Electronic Sales and Service Perth West Australia

• Posted By John Swainston02/11/2011 04:44:38 PM

  Great coverage by Tania – we are all indebted for that feedback. Having studied it from the supplier side over several months, 3 points everyone should get clear: 1. I walked into a retailer last week who immediatey encouraged me to buy an extended warranty for the router I was buying. I had to point out that my expectation was this would last several years as it has no moving parts, that if it failed within 3 years I would expect the manufacturer to get it working and that as a pro class device that was my expectation. Lesson: There was no frontline knowledge that the law had changed. We are all obligated under the new law to ensure our people are trained in the new clauses of the new law, and that State Authorities are no longer involved in setting their own varying laws, but there is one Federal law. 2. Return costs from a retailer to enable warranty repair or replacement to take place are not necessarily now the obligation of the manufacturer. Our policy at Maxwell has been that return costs to make good are the retailer`s responsibility and we pay the freight back. A consumer now has the right to ensure they have no cost. We are working on changes to logistics arrangements to facilitate a smooth return process, but that may still mean we look to the retailer, as the vendor, to pay return costs. A retailer makes a margin in the sale, so shared cost of making good does not seem unreasonable. Where that is not part of the retailer`s business plan, then our prices may reflect that different obligation. The key change is that a consumer may not be charged for any of those costs, whoever pays them (Retailer or Supplier). 3. As a supplier of lenses which are subject to impact, water ingress and many other non warrantable issues, I suspect we will initially see more `try-ons` from consumers who have in fact caused damage and believe the new law allows them open slather. It very clearly does not. By the same token, however, where a defect in a $1,000 lens does occur there is now more obligation than before, and as Tania says, we are all now open to some degree of claim for consequential cost or lost opportunity, UNLESS we and the retailer make clear at the TIME OF THE SALE that our product offering specifically excludes consequential loss resulting from equipment failure. A wedding photographer who has a camera fail is irresponsible if they have no back-up. Such persons should at all times be reminded when we are working with them that they have an obligation to provide a service and take reasonable steps to ensure their ability to continue to provide that service, even in event of their first camera or flash failing. Such an expectation may not be held by a consumer travelling who only takes a compact on their holiday of a lifetime. But since they too have a back-up in their phone, the true consequential loss may still be quite modest. Sales processes need to capture these differences. Printed invoices should caution consumers on these matters clearly at the time of the sale. A training and orientation issue. Hope that adds some colour to the issue from a supplier perspective.