> When confronted by Goran, Umart went to the trouble of quoting the Australian Consumer Law but made a seemingly byzantine and twisted interpretation of it, reiterating that a refund at the original price was the proper remedy.
Have I been living in a country with weak consumer protection for too long? I can't see refunding the product as byzantine, and I've never heard of anyone getting a refund at the new price.
Some electronics insurance providers will do that in the U.S. I'd say that kind of refund isn't typical otherwise.
But if the RAM was sold with Umart's promise to replace it (or the local laws' requirement that they replace it) if it prooved faulty within such and such a time period, then they owe the buyer a replacement.
If they don't want to provide an actual replacement, anything less than giving the buyer a full present-day replacement's worth of money, or a genuinely equivalent or better product, is breaking their own guarantee and/or the local law (I don't know Australian law).
They can't just say "actually it's more expensive now and we don't want to honor our replacement guarantee anymore, so we'll only give you a quarter of a replacement's worth of money instead". That's absurd.
They just want to shove their own bad luck/the consequences of the RAM shortage off on their customers in any way they can, whenever they think they can get away with it.
Here's a (flawed) thought experiment: imagine that 100% of customers' RAM suddenly goes faulty at the same time, and RAM prices have suddenly skyrocketed to infinity at the same time.
Which outcome is ideal? Which one is morally correct?
(A) the retailer refunds every customer, loses all of their profits and probably goes bankrupt
(B) the retailer is forced to go into massive debt in order to replace everyone's RAM, and may not recover from the debt, and may face legal consequences if they can't replace the RAM
(C) in the first place, the retailer should have been required to have a backup RAM stick for everyone that purchases the RAM, so that they are able to issue replacements if necessary, plus extra in case the replacements themselves are faulty. As a result, RAM prices before this incident were well over 2X the real manufacturing cost, in order to cover this "backup" cost (manufacturing, storage, etc.)
(D) something else?
(This is a much more extreme version of what actually happened, but maybe instructive to think about)
As discussed elsewhere, the law says (a) or (b). Both of which lead to a bankrupt company, and maximum possible recovery for customers. Which seems like the best possible outcome for dealing with a company that sells 100% faulty product, no?
According to the article, the law says B. If that makes for bad law, it's up to the legislature to change it, not up to the retailer to unilaterally decide to stop following the law.
Actually, the article says the law says A or B. From the article:
> In a simplified form, retailers are responsible for warranty claims and must replace or refund the defective item
The choice is at the retailer’s discretion and the refund is obviously of the purchase price.
This is a non story. The retailer is acting lawfully. The only curiosity is that normally it is in a retailer’s best interests to replace goods, but in these circumstances they are better off refunding them.
In Norway, the seller could legally claim the repair would be unreasonably expensive[1], comparing the price of the thing when sold to the price of the repair or a new equivalent item. They would then only have to refund the price of the product as sold minus a reasonable amount for the time you had it while it worked.
The law is, and should be, B. Retailers that wish to avoid future hardship can prepare by pre-stocking some replacement parts like in C, but I don’t think laws should protect retailers from their poor financial choices. The law should strictly, and extremely, protect the consumer.
There is a lot of merit to this view, but there is also a major problem: rules like this make it substantially harder to start a new business due to increasing overhead and complexity, which is bad for everyone long term. Such comparatively more complex and burdensome regulation is why so many (but not all) startups go to America or Israel instead of Europe.
To address this I prefer ultra low friction and ultra low cost regulations over complex and performative schemes. For example, GDPR requires the appointment of a "data protection officer" in some cases, which is mostly just an extra fee for small companies. Instead, it should only regulate the rights (such as to be forgotton, etc.). Appointing such an officer is mostly performative.
The most important thing in my view is that both parties are aware of their rights and responsibilities. If the plain text of the warranty agreement specifies replacement, replacement should be required. If the business doesn't want to assume the risk, that's fine, but the warranty should then clearly and explicitly stipulate replacement or refund at the retailer's discretion, in such a way that an average consumer would be expected to see and understand this (i.e., no "replacement" in large, friendly letters and "or refund" buried in fine print or legalese, or leaving out specific details to be filled in by default provisions when such provisions favor the retailer).
I don't see anywhere where the manufacturer or retailer/distributor is required to perform one of the actions based on what the customer wishes of returning or replacing the item.
I also fail to see where anyone would expect the current purchase price to be refunded to them instead of the original paid purchase price.
If the regulations require making the customer whole, then I could see an argument for current fair market value, or even just giving nominal interest on the purchase price.
If in your thought experiment, the retailers had a potential risk (requiring fair market value returns/replacement), and they failed to insure themselves from that risk, then they indeed deserve to be forced out of business.
So possibly the warranty may say "replace or refund at supplier's option." In that case, it's clear. But if we don't know what the "fine print" says, then I don't see how we can figure out who was wrong or right.
In this specific situation I would say that if the part is under manufacturer warranty, then the retailer should either offer a refund at the price paid or assistance for the customer in getting the manufacturer warranty replacement. Expecting the retailer to replace the faulty unit when the *wholesale* price has changed dramatically is.. unfair. I'm sure many people would scream "cost of business" and perhaps they are right. But, if the retailer is making a good faith effort to resolve the issue in a manner that keeps the customer "whole", that should be the metric for both "legal" and "moral".
In this case it would have been best to allow customer to get his product back not-replaced/not-repaired so he could seek other options, like repair. It is likely that only one of the sticks was bad, and a single good stick is worth 2x refund price. Buying a single not matching stick would have been better than this.
It's not a "flawed" thought experiment and it's certainly not "instructive", it's utter trite clearly framed to promote the idea that the retailer can do whatever they want to save money.
This isn't what happened. It's nowhere near what happened. This will never happen. And our laws are written for the real world, not some hyperbole designed for corporate interests where any and all consumer protections are impossible because "what if the moon explodes".
The article title ought to name the company (Umart). I assume they didn't because they want the clicks, but I'd argue that giving Umart the bad publicity they deserve would make companies reconsider whether to implement anti-customer policies like this.
It seems like Australian law gives the consumer the choice of refund or replacement, i.e. the store can't refuse to replace: https://www.accc.gov.au/business/problem-with-a-product-or-s...
> When confronted by Goran, Umart went to the trouble of quoting the Australian Consumer Law but made a seemingly byzantine and twisted interpretation of it, reiterating that a refund at the original price was the proper remedy.
Have I been living in a country with weak consumer protection for too long? I can't see refunding the product as byzantine, and I've never heard of anyone getting a refund at the new price.
Some electronics insurance providers will do that in the U.S. I'd say that kind of refund isn't typical otherwise.
But if the RAM was sold with Umart's promise to replace it (or the local laws' requirement that they replace it) if it prooved faulty within such and such a time period, then they owe the buyer a replacement.
If they don't want to provide an actual replacement, anything less than giving the buyer a full present-day replacement's worth of money, or a genuinely equivalent or better product, is breaking their own guarantee and/or the local law (I don't know Australian law).
They can't just say "actually it's more expensive now and we don't want to honor our replacement guarantee anymore, so we'll only give you a quarter of a replacement's worth of money instead". That's absurd.
They just want to shove their own bad luck/the consequences of the RAM shortage off on their customers in any way they can, whenever they think they can get away with it.
Here's a (flawed) thought experiment: imagine that 100% of customers' RAM suddenly goes faulty at the same time, and RAM prices have suddenly skyrocketed to infinity at the same time.
Which outcome is ideal? Which one is morally correct?
(A) the retailer refunds every customer, loses all of their profits and probably goes bankrupt
(B) the retailer is forced to go into massive debt in order to replace everyone's RAM, and may not recover from the debt, and may face legal consequences if they can't replace the RAM
(C) in the first place, the retailer should have been required to have a backup RAM stick for everyone that purchases the RAM, so that they are able to issue replacements if necessary, plus extra in case the replacements themselves are faulty. As a result, RAM prices before this incident were well over 2X the real manufacturing cost, in order to cover this "backup" cost (manufacturing, storage, etc.)
(D) something else?
(This is a much more extreme version of what actually happened, but maybe instructive to think about)
As discussed elsewhere, the law says (a) or (b). Both of which lead to a bankrupt company, and maximum possible recovery for customers. Which seems like the best possible outcome for dealing with a company that sells 100% faulty product, no?
According to the article, the law says B. If that makes for bad law, it's up to the legislature to change it, not up to the retailer to unilaterally decide to stop following the law.
Top poster is asking what we think the law should be, not what the law is.
Yeah, that's the intent. It's why I listed several options
Actually, the article says the law says A or B. From the article:
> In a simplified form, retailers are responsible for warranty claims and must replace or refund the defective item
The choice is at the retailer’s discretion and the refund is obviously of the purchase price.
This is a non story. The retailer is acting lawfully. The only curiosity is that normally it is in a retailer’s best interests to replace goods, but in these circumstances they are better off refunding them.
According to the link posted above, the choice is up to the customer, not the retailer: https://news.ycombinator.com/item?id=47366595
> (D) something else?
In Norway, the seller could legally claim the repair would be unreasonably expensive[1], comparing the price of the thing when sold to the price of the repair or a new equivalent item. They would then only have to refund the price of the product as sold minus a reasonable amount for the time you had it while it worked.
[1]: https://lovdata.no/lov/2002-06-21-34/§29
[2]: https://www.forbrukerradet.no/cause-for-complaint/
The law is, and should be, B. Retailers that wish to avoid future hardship can prepare by pre-stocking some replacement parts like in C, but I don’t think laws should protect retailers from their poor financial choices. The law should strictly, and extremely, protect the consumer.
There is a lot of merit to this view, but there is also a major problem: rules like this make it substantially harder to start a new business due to increasing overhead and complexity, which is bad for everyone long term. Such comparatively more complex and burdensome regulation is why so many (but not all) startups go to America or Israel instead of Europe.
To address this I prefer ultra low friction and ultra low cost regulations over complex and performative schemes. For example, GDPR requires the appointment of a "data protection officer" in some cases, which is mostly just an extra fee for small companies. Instead, it should only regulate the rights (such as to be forgotton, etc.). Appointing such an officer is mostly performative.
The most important thing in my view is that both parties are aware of their rights and responsibilities. If the plain text of the warranty agreement specifies replacement, replacement should be required. If the business doesn't want to assume the risk, that's fine, but the warranty should then clearly and explicitly stipulate replacement or refund at the retailer's discretion, in such a way that an average consumer would be expected to see and understand this (i.e., no "replacement" in large, friendly letters and "or refund" buried in fine print or legalese, or leaving out specific details to be filled in by default provisions when such provisions favor the retailer).
I'll take fewer startups if the tradeoff is actual consumer and human rights. I don't even think it's a morally debatable tradeoff.
I don't see anywhere where the manufacturer or retailer/distributor is required to perform one of the actions based on what the customer wishes of returning or replacing the item.
I also fail to see where anyone would expect the current purchase price to be refunded to them instead of the original paid purchase price.
If the regulations require making the customer whole, then I could see an argument for current fair market value, or even just giving nominal interest on the purchase price.
If in your thought experiment, the retailers had a potential risk (requiring fair market value returns/replacement), and they failed to insure themselves from that risk, then they indeed deserve to be forced out of business.
So possibly the warranty may say "replace or refund at supplier's option." In that case, it's clear. But if we don't know what the "fine print" says, then I don't see how we can figure out who was wrong or right.
In this specific situation I would say that if the part is under manufacturer warranty, then the retailer should either offer a refund at the price paid or assistance for the customer in getting the manufacturer warranty replacement. Expecting the retailer to replace the faulty unit when the *wholesale* price has changed dramatically is.. unfair. I'm sure many people would scream "cost of business" and perhaps they are right. But, if the retailer is making a good faith effort to resolve the issue in a manner that keeps the customer "whole", that should be the metric for both "legal" and "moral".
In this case it would have been best to allow customer to get his product back not-replaced/not-repaired so he could seek other options, like repair. It is likely that only one of the sticks was bad, and a single good stick is worth 2x refund price. Buying a single not matching stick would have been better than this.
D: give them money at the original price of the ram.
It's not a "flawed" thought experiment and it's certainly not "instructive", it's utter trite clearly framed to promote the idea that the retailer can do whatever they want to save money.
This isn't what happened. It's nowhere near what happened. This will never happen. And our laws are written for the real world, not some hyperbole designed for corporate interests where any and all consumer protections are impossible because "what if the moon explodes".
The article title ought to name the company (Umart). I assume they didn't because they want the clicks, but I'd argue that giving Umart the bad publicity they deserve would make companies reconsider whether to implement anti-customer policies like this.