Here is a current example of dealings with a Harvey Norman based franchise by a mate of mine:

"I purchased a LCD TV at the Chirnside Park Harvey Norman store via GE interest free - the sales people were helpful enough. I was able to take it home that day.

First turning on the TV - everything was already setup which is in contradiction to the user manual. I Didn't think anything of it at this stage. It wasn't until I set up my Home theatre equipment a couple of weeks later that I noticed none of the side inputs would work properly - svideo had intermittent issues with a camcorder and the TV's much touted usb ability did not work at all.

After originally calling the store with these issues, I was told to bring in some devices to test on a similar TV set. I went back to the store and approached a salesman with my issues with the TV. After testing the devices on another TV, all of which worked, I was told there was nothing Harvey Norman can do and he gave me a number of a repair company.

I then asked if it was possible to replace the TV with another one as the TV we bought was clearly faulty and was told there was no stock of that particular TV in the store and that he cannot take my word for it that there was an issue with the TV in the first place.

I then said I can bring the TV down to the store and he can see for himself, but was told “I am not a technician, I cannot make that decision, you need to get it seen by a qualified technician”

I then requested a refund after exhausting all avenues of politeness, talking to unhelpful and rude sales people can get you worked up. Again I was told “A qualified TV technician needs to see the TV, I cannot help you”. Frustrated with the lack of help and complete disinterest of the sales people I walked out of the store.

I organised a pickup with the repair company who and was given a two week timeframe.... A Call to Consumer Affairs Victoria outlined my rights in this matter and requested this situation be put in writing.  I then emailed Harvey Norman Feedback and physically mailed the Chirnside store the situation.  A call the next day resulted in one of the Sales people saying " We will sort it out for you, give me an hour and I'll ring you back"  Two days later - No Phone call - Unbelievable...  I rang back, got the same sales person and was subsequently told " ON MY watch you will NOT be getting a REFUND, REPLACEMENT - Nothing"  As you can imagine - I am not that happy.

How is it possible that big retailers like Harvey Norman can get away with this sort of treatment of their customers.

A quick scan of google brought up this review site: http://www.productreview.com.au/showshop.php?shop_id=1024 It appears a great number of people have had a similar issues with Harvey Norman and also have faced major problems regarding the sales of faulty products.

It is clear in this situation that Harvey Norman have attempted to mislead the customer of his or hers rights, to outline the obligations Harvey Norman has, here is an excerpt from the ACCC website:

I sell goods...

What are my obligations?

When you sell goods you must make certain that they fulfill certain conditions and warranties that are implied under the TPA.

You must be sure that goods:

• are of merchantable quality—that is, goods need to reach a basic level of quality given the price of the goods and any description that is provided with the goods
• are fit for the purpose or job that the consumer described to you or that are self-evident
• match any description or sample given to the consumer whether in promotional material, over the phone, in person, on a website or on labelling or packaging
• are free from defects and faults.

You must also be sure that any goods you sell have no debt or financing owed on them so the consumer can have free title to the goods.

If the goods you have sold do not fulfill any of these conditions then the consumer may be entitled to a refund from you on return of the goods. If the goods have been partially consumed the consumer may be entitled to a refund depending on the circumstances and the extent to which the goods have been consumed.

Consumers can choose an alternative remedy to a refund. In these circumstances you may want to offer an exchange, a credit note or to repair the goods.

If the goods being returned have had a fair amount of use then you may be entitled to provide a partial refund only or to repair the product instead. This will depend on the circumstances of the sale and return and if the use of the goods has affected the fault.

You have the right to ask for proof of purchase from the consumer, for example, a receipt or credit record.

You are not obliged to provide a refund, credit or exchange if a consumer has:

• changed their mind, decided they no longer want the goods or just don’t like them, or found that goods are the wrong size or colour
• found they can buy the same or similar goods elsewhere for a cheaper price
• examined goods before buying them and should have seen any fault at that time
• had a defect drawn to their attention before they purchased goods, for example, when goods are clearly labelled as seconds or faulty.

The interest free options that Harvey Norman spam commercially could be the only thing keeping the store viable in todays retail market, if this sort of payment option is a necessity or your only option, there are alternatives through retailers like JB Hifi and Retravision. From personal experience, Retravision has fantastic customer support, I also bought an awesome LCD from JB myself.

Update:  After a call to Consumer Affairs Australia, Harvey Norman quickly changed their tune and offered a full replacement.

Links:

Product Review.com.au

Your refund rights and obligations

ACCC Warranty & refund obligations