Can I still sell my old stock of recalled toys in my Melbourne shop?

The situation

I run a small independent toy boutique in Melbourne, Victoria, and I am in a bit of a bind regarding some inventory. Back in early February 2024, I received a formal notice from a consumer safety regulator stating that a specific brand of plastic building blocks had been hit with a permanent ban due to choking hazards. I currently have about 150 units of these specific blocks sitting in my storeroom, which I purchased from my supplier last November for a total of $3,000. I have already taken them off the shop floor and moved them to the back, but I am hesitant to simply throw them away because they are still in perfect condition and represent a significant loss to my small business. I tried calling my supplier to see if I could return them for a full refund, but they told me they won't take them back because of the safety ban. I am worried about the legal repercussions if I try to sell them at a discount just to clear the stock, or even if I just keep them in my possession for now. Is it actually against the law for me to keep these items in my shop, or am I only in trouble if I actually sell them to a customer?

Detailed Analysis

Under the Australian Consumer Law, the permanent ban placed on these plastic building blocks in February 2024 changes your legal obligations regarding your $3,000 inventory.

First, you cannot sell or even attempt to sell these items. The law states that a person commits an offence if they "supply consumer goods of a particular kind" and "a permanent ban on goods of that kind is in force"^[1]. This means you cannot complete a sale to a customer. Furthermore, you cannot even try to clear the stock by offering it at a discount. The law prohibits a person from "offering for supply" goods that are subject to a ban^[1]. An 'offer for supply' means any attempt to make the goods available to a customer, even if no money changes hands immediately.

Second, you are likely already in breach of the law just by having the blocks in your storeroom. The law states that an offence is committed if a person "manufactures, possesses or has control of consumer goods" where the supply of those goods is prohibited by a ban^[1]. Because you are holding these 150 units in your shop for the purpose of your business, you are 'possessing' them for trade.

There is a small exception if you do not possess the goods for the purpose of supplying them^[1]. However, since these are part of your retail inventory intended for customers, this exception likely does not apply to you.

These offences are 'strict liability' offences^[1]. This is a legal term meaning the regulator does not have to prove you intended to break the law; they only need to prove that the banned goods were in your possession or offered for sale. The penalties for a business can be extremely high, reaching up to $100,000,000 or more depending on the circumstances^[1].

Please note that Victorian state consumer laws may add further specific requirements for business compliance.

Statutory Citations

Related Questions

• Can I sue a shop if they sold me a toy that has been banned for safety?