savvy shopping
DESCRIPTION
We’ve outlined some of the common traps to beware as well as offering tips on smarter shopping.TRANSCRIPT
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
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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.
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