How to Handle Problems with Products or Services for Your Business
Running a small business involves making smart purchasing decisions, and it’s not uncommon to encounter issues with the products or services you’ve bought. When something doesn’t work as expected, it’s important to know how to address it efficiently and effectively. Here’s a guide on how to resolve problems with purchased goods or services with minimal stress.
Understanding Consumer Guarantees
Under Australian Consumer Law (ACL), businesses are protected by a set of basic rights known as consumer guarantees. These guarantees ensure that the products or services you buy meet certain standards. Unlike warranties, which are often specific and limited, consumer guarantees are automatic and offer broader protections.
Your business is entitled to consumer guarantees for goods and services purchased that are:
- Under $100,000
- Over $100,000 but typically used for personal, domestic, or household purposes
- Vehicles or trailers primarily used for transporting goods
What Do Consumer Guarantees Include?
The ACL sets out several rights that products and services must adhere to. For products, you have the right to expect that they:
- Are of acceptable quality
- Match the description given
- Meet any express warranties
- Are fit for the intended purpose
When it comes to services, you have the right to expect that they:
- Are provided with due care and skill
- Are fit for the specified purpose
- Are delivered within a reasonable time frame
If a product or service fails to meet these standards, you may be entitled to a remedy, which could include a repair, replacement, refund, compensation, or even cancellation of the contract.
Who is Responsible for Resolving the Issue?
The responsibility for resolving any issues lies with the seller, not the manufacturer. The seller is legally obligated to provide a remedy if the product or service doesn’t meet the consumer guarantees under ACL. If the seller tries to redirect you to the manufacturer, remind them of their obligations to address the issue directly.
Under ACL, the seller can then seek reimbursement from the manufacturer for any costs incurred in providing a remedy, such as compensation. This is called “supplier indemnification.”
Resolving Problems: Minor vs. Major Issues
When a problem arises, the steps to resolve it depend on whether it is a minor or major issue:
- Minor Problem: These issues can usually be fixed quickly and with minimal inconvenience. The seller can offer a refund, repair, or replacement. For services, this might involve resupplying the service or correcting the error.
- Major Problem: A major problem is one that cannot be easily fixed, or involves multiple smaller issues that, when combined, would have stopped you from making the purchase if you had known. In these cases, you are entitled to a remedy, such as a refund, repair, or replacement, or resupply of the service. Additionally, if you’ve incurred losses because of the problem (known as consequential loss), you may also be entitled to compensation.
Taking Action: Step-by-Step
If you encounter a problem with a product or service, it’s important to take action quickly. Follow these steps to address the issue:
- Document the Problem: Clearly describe the issue and gather supporting evidence. This might include receipts, photos, or any communication with the supplier.
- Send a Complaint: Use a structured approach to communicate your concerns. A complaint letter should include:
- A description of the problem, backed by evidence.
- Reference to relevant sections of ACL supporting your claim.
- A clear statement of the outcome you’re seeking (e.g., a refund, repair, or replacement).
- A reasonable deadline for a response.
- Evaluate Your Options: If the supplier doesn’t respond or refuses to resolve the issue:
- Seek Legal Advice: Consult a legal expert to better understand your rights and possible outcomes.
- Dispute Resolution: Use dispute resolution services to mediate the situation without going to court.
- Court Action: If all else fails, consider taking the matter to court, especially for higher-value issues.
When to Use Dispute Resolution Services
If you can’t resolve the issue directly with the supplier, the Small Business Development Corporation (SBDC) offers dispute resolution services. This can be particularly helpful for small business owners who need support navigating the complexities of consumer law to achieve a fair resolution.
By following these steps and understanding your rights, you can ensure that any problems with products or services are addressed efficiently, allowing your business to keep running smoothly.
