How Does the Proof of Purchase Requirement Work?

Thanks to the ever-growing world of technology, there are so many ways for consumers to purchase goods and services. EFTPOS, PayPass and online transactions are some of the popular ways consumers pay for goods. However, for small business owners, the exponential growth of e-commerce can complicate your understanding of proof of purchase. This article will explain the concept of proof of purchase, along with what your responsibilities are as a business owner.

What is Proof of Purchase?

Proof of purchase or transaction is a document that proves you have bought a particular product or service from a specific place. For instance, a receipt is an excellent example of proof of purchase. A receipt generally contains the ABN or ACN of the supplier, date, name of the product or service and the price. A receipt signifies that a particular item was bought at a certain place on a certain date.

Types of Proof of Transaction

Besides receipts, there are other types of proof of purchase consumers can use. These include:

• Credit or debit card statement
• Warranty card that shows the supplier’s or manufacturer’s details, date of purchase and the amount paid
• GST Tax invoice
• Lay-by agreement
• Copy of the receipt
• A confirmation number or reference number for phone or online transactions
• A serial number linked to the purchase on the supplier’s or manufacturer’s database

Components of a Proof of Transaction

Any document issued to consumers as proof of purchase must include:

• Your business name
• Australian Business Number (ABN) or the Australian Company Number (ACN)
• Date of purchase
• Name of the product or service
• Details of the product or service
• Purchase price

Proof of purchase can be used by a business to confirm that you purchased the particular product from their store. Businesses have to prove the product or service was indeed purchased from them to allow you access to your rights as a consumer and negate questions of possible fraud.

Consumer Rights & Guarantees

Consumers have the right to ask for a repair, replacement or refund if the product or service fails to meet the consumer guarantee under Australian Consumer Law. Regardless of the remedy sought, a product returned to the store represents a cost to the business which bears the responsibility and expense of repairing or replacing the item. If the consumer is seeking a refund, that is additional costs the business has to incur. Before companies undertake additional expenses to comply with their legal obligations, they have the right to ask for evidence to prove the product was not purchased elsewhere. If it was and the business provides a remedy, they would incur double costs through fraud. For this reason, a business has the right to ask for proof of purchase when a consumer returns an item. A business can decline to perform the appropriate legal remedy if the consumer fails to provide any proof of purchase. Consumers cannot rely on consumer guarantees if they have no evidence to prove the product or service was purchased from a particular business.

Finally

As a business owner, you have no legal obligations to the consumer if they fail to provide a proof of purchase. However, you can have a store policy in place as a sign of goodwill to your consumers. There is also no legal requirement to provide a receipt for purchases under $75. However, if your consumer requests a receipt, you are obliged to provide a receipt within seven days. Regardless of the purchase price, its a good practice to offer a receipt to your customers. The maximum civil penalty for failing to provide consumers with proof of purchase within the required timeframe is $15,000 for a body corporate and $3000 for an individual. If you’re not sure whether a document a customer has provided is a valid proof of purchase, you should get in touch with a commercial lawyer for further advice. Further, a lawyer can help you ensure the proof of purchase you issue is valid.