Australia’s e-commerce market continues to rapidly grow each year as consumers increasingly shift from offline to online purchasing, a trend that escalated with the outbreak of COVID-19. To increase sales, online businesses commonly use various tactics to drive clicks without considering the hidden risks.
In this series, we discuss three of these tactics and when businesses might find themselves in breach of Australian consumer laws. This first article looks at risks associated with a ‘lifetime warranty’ claim on products.
Lifetime warranties – are they really for a lifetime?
I am in the market for a new carry-on suitcase so my feed has recently been filled with advertisements for the latest and greatest in luggage. In particular, I noticed one brand claiming to offer a “lifetime warranty” on its products.
Looking further into this claim, it was described as a lifetime guarantee on manufacturing faults. Not much further detail was provided. Whilst this company may have the very best intentions in offering this warranty, obligations under the Australian Consumer Law (ACL) should be seriously considered by manufacturers and sellers providing goods to Australian consumers.
The regulator, the Australian Competition and Consumer Commission (ACCC), is known to take ‘lifetime guarantee’ and ‘limited lifetime guarantee’ claims very literally. For instance, a seller may have in mind that a ‘lifetime’ means the reasonable lifetime of the product (say five years). But in 2017, the ACCC accepted a court-enforceable undertaking from consumer electronics manufacturer Belkin to honour claims under its lifetime warranty policies for the lifetime of the original purchaser. That’s right, a lifetime warranty should last for the lifetime of the human who purchased it according to this outcome.
In Belkin’s case, they advertised products with a “lifetime warranty” or “limited lifetime warranty” but applied a policy of only repairing or replacing products under these warranties within five years from the date of purchase. A disclaimer was not printed on product packaging but was referred to on Belkin’s website.
The ACCC considered that such practices breached the ACL, which prohibits misleading or deceptive conduct and false or misleading representations about the effect of a warranty or guarantee.
The moral of the story is that if a business makes a lifetime warranty claim, they must be very clear with their customers about what this means. Have a lawyer check your warranty claims and policies to ensure they comply and that the packaging and website include the wording required by the ACL for use with any warranty against defects.