Second-hand goods warranty barrier

By Georgina Crouth Time of article published Apr 16, 2018

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PRE-OWNED, pre-loved or simply second-hand, the market for used goods is burgeoning. With retail sales gradually picking up, the growth area to watch is online retail, with more than 40% of all goods sold in South Africa being traded online.

It seems the market’s been swayed from snobbishness towards second-hand goods and buying “other people’s problems”, because used goods make better financial sense and they’re kinder to the environment.

Online retailer Gumtree said last year the second-hand economy was “thriving in the local market”, with 95% of respondents (it didn’t reveal its sample size) having bought or were planning to opt for second-hand goods and vehicles in 2017.

Its survey said men favoured cellphones, computers and furniture, while women preferred to buy household goods and appliances, furniture, décor and items for babies. Claire Cobbledick, head of core business for Gumtree South Africa, noted millennials were behind the biggest growth sector for second-hand shopping.

“The 26-35-year-old age group opts for second-hand goods in order to afford items they aspire to, spending R2500-R5000 in an average shop on items like furniture, household goods and appliances; while the 36-55-year-old (group) can afford to pay retail prices but prefers not to. About a third of millennials say they buy a second-hand item at least once a month, while older groups (56+) will only buy an item once a year.

“Millennials are big drivers of this trend (to buy second-hand goods). They are more eco-conscious than previous generations and purposefully want to consume less.”

But that drive to “reduce, reuse and recycle” is being deliberately thwarted by some manufacturers, who are denying the transfer of warranties from original purchaser to new owner.

Semion Torbochkin brought the issue to my attention in recent weeks, when he complained twice about appliance manufacturers’ warranties on goods. He had bought second-hand appliances - still under warranty - but when they failed to work he couldn’t claim against the warranties. He says Samsung and Defy are blatantly disregarding consumers’ rights, quoting the Consumer Protection Act’s clause 44, which prohibits “unfair, unreasonable or unjust contract terms”.

“They (are restricting) the consumer’s right to re-sell the goods by limiting the transferability of any commercial guarantee/warrantee provided by the supplier,” he says.

Torbochkin referred me to Samsung’s warranty card, which states: “The 24-month warranty is not transferable and is only applicable to the first purchaser who legally acquired the product from Samsung Electronics authorised dealers and is subject to relevant African countries’ laws.”

Neither Defy nor Samsung responded to my queries by deadline.

Attorney Evert van Eeden, who co-authored Consumer Protection Law in South Africa with Professor Jacolien Barnard, says the CPA contains a list of terms, referred to as a “grey list”, that are typically encountered in consumer agreements. It really is a “grey area” because these terms may be presumed unfair, but they’re not necessarily so.

“Regulation 44(1)(* ) stipulates that a term of a consumer contract is presumed to be unfair if it has the purpose or effect of restricting the consumer’s right to re-sell the goods by limiting the transferability of any commercial guarantee provided by the supplier.

“In a nutshell, a term in a particular consumer contract that is not transferable to another person is not automatically unlawful or unenforceable, but is nevertheless subject to scrutiny by the National Consumer Commission and the National Consumer Tribunal, and is thus subject to possible censure.”

Both the National Consumer Commission (NCC) and the Consumer Goods and Services Ombudsman (CGSO) were interested in picking up on the issue.

CGSO spokesperson Ouma Ramaru said: “The manufacturer’s warranty is attached to the product for the entire duration, no matter who owns it. It makes no sense to say the warranty belongs to the original purchaser.”

The NCC’s spokesperson, Trevor Hattingh, agreed: “The law prescribes a minimum warranty of six months. Over and above that, the manufacturer can provide a longer period of warranty.

We’d like to know, on what grounds are they not offering the warranty? Even under the Second-Hand Goods Act, you would get a six-month warranty. Goods must be usable and durable for the duration of the warranty.”

Hattingh said the commission would like to know on what grounds the manufacturers were denying consumers their rights to qualify for the warranty. “The manufacturer guarantees that their goods are usable and durable for their maximum period. When you buy something, that warranty is worked into the price - you don’t even know it. When you buy a car, that vehicle is covered for the entire warranty period, no matter who owns it. Appliances are no different.”

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