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Guide

Savvy shopping

SHOP SMARTRefunds

WarrantiesOnline shopping

Digital downloadsInterest-free deals

Gift cardsManaging your debt

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3

Welcome

Zoya Sheftalovich, CHOICE investigative journalist

It’s holiday time, and you know what that means. It’s a time for celebration,

relaxation and catching up with friends and family – and possibly eating and drinking too much.

But for many, it’s also a time of shopping – not just battling the crowds in bricks-and-mortar stores, but also increasingly jumping online and clicking up a buying storm.

Whether you’re planning on stuffing your stockings via your laptop or in-store the traditional way, we’ve outlined some of the common traps to beware as well as offering tips on smarter shopping.

Being armed with information is essential to standing your ground and not taking no for an answer when retailers and manufacturers want you to. And that’s where CHOICE comes in.

So happy shopping from all of us!

2

PLUS! Join CHOICE today and you’ll receive the latest issue of CHOICE Computer and

a CHOICE multi-mini tool set – FREE! Enter the promotion code CCTOOLOFFER

at the checkout to receive your giftsOFFER ENDS 31 DECEMBER 2013 OR WHILE STOCKS LAST

Contents

Refunds & your rights 6 Don’t take no for an answer

Warranties 8 Should you buy that extended warranty?

Online shopping 10Browse, choose, click – done! But there are some traps to beware

Digital downloads 12Work around the pricey roadblocks that online international traders set up for Aussie shoppers

Interest-free deals 14 Buy now, pay later – in spades. So what are your alternatives?

Gift cards 16 The gift that can keep on taking

Managing your debt 18 Get the debt monkey off your back once and for all

How CHOICe can help you 20 Find out why you should sign up and become a member today

4 Back to cover 5

Did you know?

Regardless of lapsed warranties, consumer

guarantees require a product to be of “acceptable quality”

throughout its reasonable life

Refunds & your rights

Back to cover6 7

It’s a common problem. You give or receive a present, unwrap the packaging and discover it’s broken or doesn’t work. Or, it fails to perform in the way it promised. Or, it stops working a few days after the warranty expires.

So where do you stand if you need to return something?

MajOr Or MInOr?For gifts with major failures,

you may reject the goods and

get a refund or an identical

replacement. Under the

Australian Consumer Law,

there is a major failure with

a product when: you would

not have purchased it had you

known about the problem;

it is significantly different

from the description, sample

or demonstration you were

shown; it is substantially unfit

for its normal purpose and

cannot be easily fixed within

a reasonable timeframe; or it

is unsafe.

For minor failures, the

seller may choose to offer

you a refund, replacement

or repair. This must be

provided free of charge and

within a reasonable time

period. In this case you can’t

immediately reject the goods

and demand a refund – you

must give the supplier a

chance to fix the problem.

Minor failures include small

problems with products that

do not fit into the major

failure categories, such as

loose threads on clothing.

You don’t have the

automatic right to a refund

if you change your mind,

although many retailers will

offer you this option if you

return the product within a

certain time period.

Watch out for these common

breaches of your rights:

no refund – store credit only Consumers are entitled to a

refund for products found to

have a major fault or failure.

Out of warranty = no remedy Regardless of lapsed

warranties, consumer

guarantees require a product

to be of “acceptable quality”

throughout its reasonable life.

This length of time can often

be longer than the warranty

period, especially in the case

of an expensive product such

as an oven or fridge.

no packaging = no remedy Your rights are not affected

or negated just because you

haven’t kept the original

packaging of the product

you’re looking to return.

Warranties

Back to cover8 9

All goods for sale in Australia come with a statutory warranty. This means that goods should function properly for a reasonable period, bearing in mind their price and the way they were described when you bought them.

This is different from a

manufacturer’s warranty

(also known as a voluntary or

express warranty), which is

usually provided as a booklet

that comes with the product,

but may only be available in

certain circumstances, and is

often for a limited time.

Your right to compensation

is not limited to the period

of the manufacturer’s

written (express or extended)

warranty. So if, for example,

a fridge develops a major fault

after just 18 months, it is still

reasonable to expect a refund

or replacement – even if the

manufacturer’s warranty has

expired after say one year.

ExtEndEd rIP-OffThis is the third type of

warranty available in Australia

– and also the shakiest.

You’ve probably found

yourself in this situation: just

before you get ready to pay

thousands of dollars for a new

TV, the salesman asks if you’d

like to take out an extended

warranty. He says it will

give you another four years’

protection should anything go

wrong and will only cost an

extra couple of hundred dollars.

At that point the extra

money doesn’t seem much to

help protect your expensive

investment, so you agree.

After all, it’s good to have

some extra protection, right?

Not necessarily. Most

appliances are covered by

a manufacturer’s warranty

– usually one year for TVs

and up to three years for some

LCD and plasma models. And

contrary to common belief,

most products, especially

big-ticket items such as

washing machines and

TVs, are quite reliable.

Secondly, if something goes

wrong with your TV outside

the warranty period you

may be covered under the

statutory warranty.

A CHOICE survey revealed

consumers are being pressured

by sales staff to buy extended

warranties. If this happens to

you, you can always come back

with a witty rejoinder about

their confidence in the product

they’re selling while you

politely decline.

In the meantime, you can be

confident that you’re already

covered by the Australian Consumer Law.

Online shopping

10 11

Traditional bricks-and-mortar stores are slowly but steadily being left behind as more and more

Australians go online to shop. But there are some traps for young players of the online shopping game. OnLInE fraUd-bUStIng• Never give your personal password to anyone, including the

business that helped you set

it up. Legitimate businesses

don’t ask for security details

via email or phone.

• Only buy from websites that encrypt your payment details. You can tell by the

https:// in the address bar

(instead of http://) and a

small padlock symbol on the

bottom right of the browser.

If something doesn’t look

right, click on the padlock

to view the SSL certificate

and check the owner matches

the online shop and that the

certificate has not expired.

• Don’t use the same password for different sites, and create strong

passwords with a combination

of letters and numbers.

• Have up-to-date anti-virus, anti-malware, anti-spyware software

on your computer.

• If a website is unfamiliar,

research the company, read

buyer reviews, call the contact

number, and check the refund,

returns, privacy, delivery and

guarantee policies.

• Always double-check that the domain name matches the website. For

example, www.cols.com.au

might be a fraudulent copy

of www.coles.com.au.

gEt UnbLOCkEdRestricting access to content

based on geographic location

is a popular strategy used by

multinationals so they can set

different prices in different

regions of the globe.

The frustrating reality of geo-blocking is common

for Australian consumers,

who are often charged hefty

mark-ups on products from

companies such as Apple,

Microsoft and Amazon, based

on their IP address.

Third-party delivery services,

such as MyUS.com, Lil’ Shoppa,

Bongo and Price USA, remove

physical shipping barriers.

From computers to clothing,

the basic principle is the same:

you purchase the product,

enter the warehouse address of

the parcel-forwarding service

you choose, and wait until

they redirect the mail to your

Australian address. Some of

these companies, for example

Price USA, even buy the

product on your behalf.

Back to cover

Digital downloads

Back to cover12 13

Imagine a virtual tunnel from your lounge room to a computer in the US or UK capable of disguising your IP address and bringing you a constant stream of movies and TV shows, as well as access to heavily discounted software downloads.

This is exactly what a virtual private network (VPN)

does. As a client connecting

to a VPN server that’s in the

same country as the site you’re

attempting to access, you

have unimpeded access

to services and purchases

usually unavailable to

Australian residents.

There are hundreds of free

and paid VPN service providers

available online. Some of

the popular options include

TorVPN, LogMeIn Hamachi,

Hotspot Shield, HMA, IPVanish

and Overplay. Opening the

Netflix or Hulu webpage

while connected to a VPN

server in the US allows you

to successfully set up an

account if you use a legitimate

US postal address.

The alternative to using a VPN

is to adopt a US-based domain

name system (DNS) server,

such as unblock-us.com, for

about $5 per month. Rerouting

your internet connection

through a DNS server – a

simple configuration in your

computer’s network preferences

– can also trick the site you’re

attempting to access into

believing you’re elsewhere.

naME Of tHE gaMEThe average cost of an online

video game is 50% more in

Australia. Access to the lower

prices offered on the US version

of online gaming service Steam

is difficult without a US credit

card, but you can access the

legitimate US address. To

get around the US credit

card requirement, it’s possible

to make your maiden purchase

a free app and later top up

your account with prepaid

US iTunes store gift cards

purchased from eBay.

cheaper US

prices for Play

Station 3 online

and Xbox LIVE

by purchasing

prepaid vouchers

that can be used

to add credit to

an account set

up via a VPN if

you also use a

legitimate US

address.

tUnIng InIn the US

iTunes store,

the Beatles’ No. 1

album sells for US$12.99, yet

Australians fork out almost

60% more to buy it from an

Australian IP address. To get

around this, you can set up a US

iTunes account by altering the

country setting automatically

detected when opening the

iTunes store and entering a

In the US

iTunes store, the Beatles’ No. 1 album sells for US$12.99,

yet Australians fork out almost 60%

more

Interest-free deals

Back to cover14 15

Interest free, instalments payable

You pay off the purchase in

equal instalments over the

interest-free period. If you

miss an instalment, interest

will apply not only to that

instalment but also to the

remaining balance of

your account.

Interest free, with minimum payment required You pay a minimum repayment

over the interest-free period

and must pay the remaining

amount before the interest-

free period expires. If you

miss minimum repayments,

penalty fees will apply.

no deposit, four years to pay You pay off the purchase over

four years, interest applies

from day one and there is

no interest-free period.

As shopping traps go, long-term payment deals are as bad as they get. They can cost you hundreds of dollars in fees alone, even if you pay everything off within the interest-free period.

Long-term payment offers usually come in four different types:

An alternative to interest-free is lay-by, which allows you to select your presents before popular gifts are snapped up and avoid the last-minute crowds. And according to research, it’s enjoying a resurgence in popularity.

As with an interest-free purchase, you can spread lay-by payments over several weeks or even months. But unlike with interest-free deals, you can only take the product home once it’s been paid off. On the upside, lay-by fees are much lower than those for interest-free and you’ll never be charged interest.

You’ll usually pay a 10-20% deposit for the goods and a small service fee may apply. As interest-free deals usually require an application and ongoing fees, lay-by can cost much less. But it can become expensive if you change your mind, as the service fee and sometimes also the deposit may not be refundable if you cancel or don’t keep up the payments. However, should you just need a longer period to pay it off, retailers will often allow you to vary the payment terms if you ask.

HI, LaY-bY!buy now, pay later

You take your purchase home

and don’t need to make any

repayments or pay interest

during the interest-free

period. If you fail to repay

it (along with all the fees)

within the interest-free

period, interest will usually

apply on the remaining

balance from the end of

that period onwards.

Gift cards

16 17

While gift cards and vouchers make a convenient present, they’ve been the subject of numerous complaints to CHOICE over the years. traPS tO watCH fOrExpiry dates Will the card be honoured after

this date? A large number of

card providers allow a grace

period (usually one month)

after the card has expired.

Be especially wary of cards

that state only their issue date

rather than the

expiry date (they

usually also state

the time period

for expiry after

the issue date).

You should

also be able to

conveniently check

the remaining value

on the gift card. While

for this amount (such as a

Christmas card), you have to

buy something more expensive

and pay the amount above the

value on the card. Some also

can’t be used for a sale under

$10 or even $20.

Lost or stolen cards You normally have to treat your

gift card like cash – if you lose

it, it’s gone. However, some

retailers allow you to cancel and

re-issue a card you’ve bought,

sometimes for a fee. Hold onto

your receipts for gift cards and

jot down details such as the

card number.

restrictions about which shops accept the card

You can usually only use a

gift card in a specific store or

group of stores, such as the

Coles Group & Myer gift card

and Woolworths Wish card.

Shopping centre cards, such

most allow you to do so online

or via a dedicated customer

phone number, others require

you to check the balance

in-store.

gift cards not honoured for transactions less than a specified amount You can’t use, for example, a

Dymocks gift card for amounts

less than $5, so if there is

$4.50 left on your card and

you want to buy something

as Westfield’s, can be used in

a wider variety of stores, but

won’t be accepted by all stores

in a Westfield shopping centre

– in particular, none of the

Coles group (except Kmart),

Myer or Woolworths group

stores accepts it.

will you get change?

For most cards the answer is

no, but you can use the card

again if you haven’t used the

full amount.

fees and charges Fees are

mainly a problem with Visa and

MasterCard gift cards – most

retailer cards have no fees.

Back to cover

Did you know?

Shopping centre cards, such as Westfield’s, can be used in a

wider variety of stores, but won’t be accepted by all stores in a

Westfield shopping centre

Managing your debt

Back to cover18 19

Holidays are a time for celebration, spending quality time with friends and family – and sometimes racking up too much debt on the (not so) plastic fantastic.

If you do start to find yourself

drowning rather than swimming

in debt, there are steps you

can take to find yourself

back on shore.

Seek help from the professionals Financial

counselling services provide

a free, confidential and

independent service to assess

your situation and help with

solutions. They can assist with

pleading hardship on your behalf

and/or negotiating an agreement

with your lender, but they advise

consumers to make the initial

approach if they feel comfortable

doing that.

A list of counsellors in your

state is on the website of the

Insolvency and Trustee Service

payments or put the debt on hold

until you can start repaying it.

Creditors must consider your

case and respond within 21

days. If they knock you back,

the Financial Ombudsman Service or Credit Ombudsman

Service can both intervene on

your behalf.

Australia. You can also check

the services listed on Financial

Counselling Australia.

CIrCLIng dEbt COnSOLIdatIOn SHarkSDebt consolidation businesses advertise

themselves as a quick way to get

the monkey off your back, but

you could end up paying more

in the long run than you would

dealing with creditors yourself.

By law, you’re entitled to deal

with the creditor directly. Should

you fall into debt, you have the

right to ask your creditors to

revise the terms of payment

through a hardship variation.

You can also ask to revise the

terms if you simply don’t have

the money to pay what you owe,

but the terms of repayment may

be more stringent. Through the

hardship variation, you may be

allowed to extend the duration

of your debt and make smaller

At CHOICE’s Compare, Ditch and Switch page, you can compare everything from home loans to credit cards. Search the entire credit card market in seconds and compare cards on rates, fees, balance transfers and more so you don’t end up stuck with a card that will bleed you dry.

COMParE, dItCH & SwItCH

How CHOICe can help you

Back to cover20 21

• Special offers for new

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related research projects

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CHOICE is the number one advocate of consumer rights in Australia. With a wealth of advice and support on goods and services, backed up with an active community of like-minded consumers, we provide members with an unmatched resource for getting the most out of their purchases. wHY bECOME a MEMbEr?Becoming a CHOICE member

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