The Warranty Ran Out. Your Responsibility Didn't.
Warranties, consumer guarantees, and who fixes faulty goods
Here is a sentence that costs Australian businesses money every day. “Sorry, that is out of warranty; you will have to take it up with the manufacturer.”
It sounds reasonable. It is often wrong. When you sell faulty goods, the manufacturer’s warranty is not the boundary of your obligations, and its expiry does not end your customer’s rights.
Under the consumer guarantees, goods must be of acceptable quality, and that includes lasting for a reasonable time. A reasonable time is often longer than the warranty. So faulty goods that fail after the warranty has ended can still be your responsibility to fix. And the responsibility is yours as the seller, not the manufacturer’s.
Get this right, and you avoid two expensive mistakes: turning a customer away when the law says to help them, and paying for a repair that a supplier owes you. Get it wrong, and a simple fault becomes a complaint, or a bill you should never have worn.
So the safe habit is simple. Do not treat the warranty as the finish line. Ask instead whether the goods lasted a reasonable time. Handle your customer’s claim yourself. And when you are the buyer, push back when a supplier tries to fob you off.
That is the core message. The rest of this article explains the difference between a warranty and a guarantee and what it means for you whether you are selling or buying.
Free Resource: Warranty and Guarantee Guide
Digging deeper
Everything above is the bottom line. What follows is the detail: how a warranty differs from a guarantee, why durability matters, and how this plays out in a real business. Read on if you want to handle the next faulty item with confidence.
Warranty and guarantee are not the same thing
Two words get treated as the same thing. They are not.
A manufacturer’s warranty is a voluntary promise. The maker chooses to offer it, sets the length, and writes the terms. It is a bonus that sits atop the law.
A consumer guarantee is the law. It is automatic, it applies to almost everything you sell, and you cannot exclude it. The guarantees say that goods must be of acceptable quality, match their description, and be fit for purpose.
The key point is that the warranty does not replace the guarantee, nor can it shrink it. A twelve-month warranty does not mean the customer’s rights last only twelve months. In fact, a written warranty must now state this in plain terms, making clear that it applies in addition to the consumer guarantees, which cannot be excluded. This is why faulty goods are never simply a warranty question.
Why “out of warranty” is not the end
There is no blanket two-year rule in Australia. The consumer guarantees do not last a fixed period. They last for a reasonable time, judged by the product itself.
What is reasonable depends on the nature of the item, its price, how it was described, and how it is normally used. A $2,000 commercial fridge should last far longer than a $60 kettle. A cheap toy and a solid piece of play equipment sit at different ends of the scale.
So when faulty goods fail just after the warranty ends, the real question is not “is it in warranty?” The question is “did it last as long as a reasonable person would expect?” If the answer is no, the customer may still have a remedy, whether under warranty or not. That durability test is the real measure for faulty goods. Treating the warranty date as the cut-off is one of the most common and costly mistakes in retail.
The four words that can backfire
Now, the deflection. “Take it up with the manufacturer” is the phrase to unlearn.
When a customer buys faulty goods from you, the remedy lies with you as the seller. You cannot send them to the maker or the importer. The regulator is blunt about this: a business must not tell a consumer to go to the manufacturer for a remedy.
This feels unfair to some owners, because the manufacturer made the product. But the law is practical. Your customer dealt with you, so you are the one who has to fix it. You then recover your costs from the manufacturer behind the scenes. When the fault is the manufacturer’s, they must reimburse you. The customer never needs to see that part.
Saying “take it up with the manufacturer” does more than annoy a customer. It can be a fresh breach of the law, because it misrepresents their rights. The four words that feel like an easy way out are often the start of a bigger problem. With faulty goods, the remedy is always yours to arrange first.
When you are the buyer, not the seller
Here is the side that many owners miss. The consumer guarantees protect you too, whenever you buy goods for your business.
Take an early learning centre. A centre is a heavy buyer of durable equipment: commercial fridges and dishwashers, laptops and tablets, air conditioners, cots, nappy change tables, and outdoor play equipment. Much of it is expensive, and much of it is bought at or below the consumer threshold, which means the centre buys as a consumer. That gives the centre the same rights under the faulty goods law as any shopper.
So when a $3,000 dishwasher dies fourteen months in, and the warranty was twelve, the centre is not out of options. The durability guarantee asks whether the dishwasher lasted a reasonable time for its type and price. Fourteen months is not a reasonable life for a commercial machine. The supplier, not the centre, may well have to remedy it.
This matters because margins are tight. Early childhood education and care is a large sector under real cost pressure. Government funding for the sector totalled more than $20 billion in a single year across around 15,000 approved services, and most operators watch every dollar. Knowing your rights on faulty goods can save a centre thousands on equipment that failed too soon. Do not accept “out of warranty” from your own supplier any more than you would say it to a parent.
What this means across the sectors
Faulty goods reach every business SBAAS supports, on both sides of the counter.
- A childcare centre sells a branded hat to a family. If the stitching fails, the centre is the supplier and carries the remedy, not the wholesaler.
- A tradesperson installs a hot water system. If it fails too soon, the tradesperson cannot send the homeowner to the maker.
- An allied health clinic sells a brace or a TENS unit that stops working. The clinic handles it.
- A charity op shop sells a faulty appliance. Second-hand goods still carry guarantees suited to their age and price.
- A consultant on the buying side has the same durability rights on the laptop that died a month after its warranty.
The setting changes. The principle does not. Faulty goods follow the same path everywhere: the seller carries the remedy, and durability, not the warranty card, decides how long the right lasts.
A common and costly misunderstanding about faulty goods
Step back, and the scale is striking. Every year, the national and state regulators receive thousands of complaints about consumer guarantee issues. A large share come down to the same misunderstanding: the belief that a manufacturer’s warranty is the limit of everyone’s obligations.
Almost every one of those disputes over faulty goods is avoidable. That belief costs money in two directions. Customers are wrongly turned away, inviting complaints and regulatory attention. And businesses wrongly pay for repairs that their own suppliers owe them because they never pushed back on an “out of warranty” brush-off.
The regulator has made consumer guarantees an enforcement priority, with a particular focus on electronics and whitegoods, the very products where the warranty myth is strongest. The message is consistent. Faulty goods are judged by durability and the guarantees, not by a date printed on a warranty card.
The world is betting on durability.
Zoom out, and Australia is part of a clear global shift toward making products last.
In Europe, a minimum two-year legal guarantee applies to goods, and from late 2026 sellers must display a standard notice reminding buyers of those rights, alongside a new label that rates how long a product is built to last. France has gone further by making planned obsolescence a criminal offence, punishable by up to two years in prison and a fine of 300,000 euros. It is building a durability score for products.
Australia takes a more flexible path. We do not fix a single guarantee period. Our “reasonable time” test bends to the product, which can be shorter or much longer than two years. But the direction is the same everywhere. Durability is rising on the agenda, and the warranty card is losing its grip as the measure of rights over faulty goods. A business that already judges the durability of faulty goods is ahead of the curve.
How to handle a faulty item, on either side of the counter
You do not need to memorise the law. You need two short routines for faulty goods, one for selling and one for buying.
When you are the seller
- Do not lead with the warranty. Ask whether the item lasted a reasonable time for its type and price.
- If it did not, treat it as a genuine problem and sort out the remedy. The size of the fault decides who chooses it.
- Never send the customer to the manufacturer. Handle it, then recover your cost from your supplier.
When you are the buyer
- If equipment fails sooner than it reasonably should, go back to the supplier you bought it from.
- Do not accept “out of warranty” as a final answer. Ask whether the goods met the durability guarantee.
- Keep your receipts and records, so you can show what you paid and when.
The bottom line
A warranty is a bonus. The consumer guarantees are the law, and they turn on durability, not on a printed date. When you sell faulty goods, the remedy is yours to give, and “take it up with the manufacturer” is the wrong answer. When you buy them, the same rules protect you. Learn the difference once, and you will stop turning away customers you should help, and stop paying for repairs on faulty goods that a supplier owes you.
Consumer law works best when it feels like a tool, not a trap. At SBAAS, we help small business owners understand exactly where their responsibility as a seller ends and the manufacturer’s begins, so a faulty item never turns into a costly guess. If you would like to talk through how warranties and guarantees apply to your work, or learn more about how we support owners across early childhood, trades, allied health, professional services, and the not-for-profit sector, we would be glad to hear from you. Learn more about who we are and how we help at https://sbaas.com.au/about-us/.
Sources
Australian Competition and Consumer Commission. (2025). 2025-26 compliance and enforcement policy and priorities. https://www.accc.gov.au/system/files/compliance-enforcement-policies-priorities-2025-26.pdf
Australian Competition and Consumer Commission. (2026). Repair, replace, refund, cancel. https://www.accc.gov.au/consumers/problem-with-a-product-or-service-you-bought/repair-replace-refund-cancel
Consumer Protection Western Australia. (n.d.). Returns: refunds, repairs and replacements. https://www.consumerprotection.wa.gov.au/returns-refunds-repairs-and-replacements
European Consumer Centre Germany. (2026). Right to repair. https://www.evz.de/en/topics/internet-shopping/right-to-repair/
Productivity Commission. (2021). Furthering Australian consumers’ right to repair. https://www.pc.gov.au/news-media/articles/right-to-repair-consumer-goods
Productivity Commission. (2026). Report on government services 2026: Child care, education and training. https://www.pc.gov.au/ongoing/report-on-government-services/child-care-education-and-training/
Eric Allgood is the Managing Director of SBAAS and brings over two decades of experience in corporate guidance, with a focus on governance and risk, crisis management, industrial relations, and sustainability.
He founded SBAAS in 2019 to extend his corporate strategies to small businesses, quickly becoming a vital support. His background in IR, governance and risk management, combined with his crisis management skills, has enabled businesses to navigate challenges effectively.
Eric’s commitment to sustainability shapes his approach to fostering inclusive and ethical practices within organisations. His strategic acumen and dedication to sustainable growth have positioned SBAAS as a leader in supporting small businesses through integrity and resilience.
Qualifications:
- Master of Business Law
- MBA (USA)
- Graduate Certificate of Business Administration
- Graduate Certificate of Training and Development
- Diploma of Psychology (University of Warwickshire)
- Bachelor of Applied Management
Memberships:
- Small Business Association of Australia –
International Think Tank Member and Sponsor - Australian Institute of Company Directors – MAICD
- Institute of Community Directors Australia – ICDA
- Australian Human Resource Institute – CAHRI
Our Consulting Services
Management Consulting
Compliance & Risk
Professional Writing Services
Consistency in Communication
Small Business Consulting
Sustainable Businesses
Start-ups
Set-up for Success
Further Reading
The Warranty Ran Out. Your Responsibility Didn’t.
A customer brings back something you sold. It stopped working, and the warranty ended last month. Most owners think that settles it. It does not. The manufacturer’s warranty is not where your obligations end, nor is it where your customer’s rights end. The real test is something else entirely, and it is worth knowing before the next conversation at the counter.
Is Business Coaching Really Worth It? Here’s What Every Aussie SME Needs to Know
Business coaching is no longer a luxury—it’s a strategy. This article explores the tangible returns and real-world results Australian SMEs see from business coaching in today’s climate.
Since 1 August, Every Childcare Service Has a Written Duty to Children With Disability. Most Have Not Read It.
On 1 August 2026, the Disability Standards for Education 2005 were extended to almost every early childhood service in Australia: long day care, family day care, in-home care, outside school hours and vacation care. The obligations under the Disability Discrimination Act were always there. What has changed is that they are now spelled out, auditable, and enforceable in a form that families and regulators can point to. Here is what the Standards require, what a reasonable adjustment actually is, and what to put in place now.
Your Next Patient May Never See a List. An AI Will Choose for Them.
More and more buying decisions are being made by AI, not people. For allied health practices, that shift may soon influence how patients discover, compare and book healthcare services. As AI agents become the gatekeepers of search and selection, practices with accurate, consistent and easily accessible information will be the ones most likely to be recommended. The good news? The same factual, transparent approach that AI rewards is also aligned with AHPRA’s advertising requirements.
Most Small Businesses Now Own AI. Almost None Use It Well. Here Is How to Be the Exception.
Most small businesses now use some form of AI. Very few get real value from it. Agentic AI changes that by moving beyond simple prompts and handling multi-step tasks, but the advantage does not come from owning more tools. It comes from choosing one useful workflow, keeping a person accountable, measuring the result, and building from what works.
The Price of Getting It Wrong Just Doubled
In March 2026, the maximum penalties under the Australian Consumer Law doubled overnight. You will probably never face the top fine. So why should a small business owner care? Because the change quietly raised the stakes on the everyday decisions you already make, from the quote you send tomorrow to the refund you handle next week.