Reading time: 6 minutes

If your business provides goods and services to consumers, you must deal with customer complaints as they arise. If there are any issues with those goods or services, you need to fix them appropriately. But what happens when the cause of a customer complaint is not an issue with your business, but your supplier? In that situation, you still have to provide a remedy for the customer. However, in most cases, your supplier should compensate you for any loss you suffer. Check your contract, as there will likely be a clause covering this situation. This article will provide some possible options for dealing with customer complaints caused by your supplier.

Obligations To Your Customers

Because you are ‘in trade’ when you sell your goods or services, the law requires that you fulfil certain consumer guarantees when dealing with your customers. For your products, in particular, you guarantee that they:

  • are fit for their intended purpose;
  • are safe and of acceptable quality;
  • match any descriptions or demonstrations you give;
  • are delivered on time and in good condition;
  • are priced reasonably if there is no already agreed-upon price; and
  • are sold legally.

Customers will complain if you break one of these guarantees, or fail to meet them. You will then be obliged to give customers a remedy, usually in the form of a:

  • repair;
  • replacement; or 
  • refund.

For example, if you sell a customer a fan and it breaks within a few hours of usage because it was faulty, you would have to give them a remedy.

What happens when the supplier is the cause of a customer complaint? Some examples include where:

  • the product they made was damaged or faulty;
  • shipping delays meant that delivery was late; or
  • products were damaged in transit, if your supplier also handles delivery.

Despite your business not being the cause of the problem, you still have to give the customer a remedy. You cannot simply direct their complaint to your supplier, and leave them to solve it. Instead, it is best to provide a remedy for your customer’s complaint and then claim back any loss from your supplier.

When Your Supplier Causes a Customer Complaint

Investigate The Complaint

Your consumer law obligations mean that you have to investigate every customer complaint as they come. You cannot delay it needlessly, or outright refuse to do so. This does not mean that you have to provide a remedy for every complaint as they come. Remain professional and courteous at all times, and keep customers updated as to the progress of the investigation.

Determine Appropriate Remedy

Once you have investigated and determined that your supplier caused the problem, you need to decide on the appropriate remedy to give. If the fault is serious, such as an unsafe product, the customer gets to decide what kind of remedy they want.

Depending on the kind of remedy, you may have to ask your supplier for a product repair or replacement. Focus on helping and compensating the customer as promptly as possible, as any unjustified delay will only lead to customer dissatisfaction and will not reflect well on you.

Take It Up With Your Supplier

Once you have resolved the customer’s side of things, you need to contact your supplier and sort out the root of the problem. Before you contact your supplier to determine what happens next, check your contract to see if there are any clauses outlining what should happen when something goes wrong.

You should then:

  • inform your supplier of the complaint, if you have not done so already;
  • provide relevant paperwork from the sale, as well as the time and nature of the problem;
  • work together with your supplier to move forward.

Make sure to keep things amicable and professional. If you cannot get a remedy for your loss from your supplier, they will want to know about the problem to fix their processes.

For example, say that a customer complains to you about a damaged product. You inform your supplier of the problem, and they find that employees did not take enough care when packaging the products in their factories. They should then aim to fix that process to avoid the damage occurring again.

Legal Options

If you cannot solve the issue amicably, you have certain legal rights that protect you. Always check your contract in the first instance, as there will likely be clauses that outline what you should do in case of a supplier-caused issue. If there is a breach of contract in any way, you can follow up that avenue. There may also be other laws that you can rely on, so be sure to seek legal advice. If the supplier refuses to cooperate, you may have to go to the Disputes Tribunal.

Key Takeaways

Regardless of whether you or your supplier broke your consumer guarantees, you have to provide a remedy for customers with legitimate complaints of this nature. But, if your supplier caused the issue, you should be able to get a remedy from them as well. If you would like more information or help with a customer complaint caused by a supplier, contact LegalVision’s regulatory and compliance lawyers on 0800 447 119 or fill out the form on this page.

Frequently Asked Questions

Can I refuse to give a customer a refund?

You cannot outright refuse to give a customer a refund. You have to listen to their complaint, and if you have broken one of your consumer guarantees, you will have to give them a refund or other remedy. 

Do I have to deal with all customer complaints?

Yes, you have to handle all customer complaints. You cannot delay or avoid investigating them. However, you do not have to provide a remedy for every customer complaint.

What happens when my supplier causes a complaint?

If your supplier caused a customer’s complaint, focus on fixing the mistake first. Then, you can ask your supplier to compensate you for the loss if the circumstances are appropriate.

Can I make my supplier deal with a customer complaint?

You cannot make your supplier deal with a customer complaint directly. You can ask them to repair or replace a faulty product, but you cannot tell your customer that the supplier will handle their complaint.

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2019 Top 25 Startups - LinkedIn
  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards