Dick Smith customers and former staff say the retailer's claim that its sale of a second-hand hard drive as new was just a "one-off occurrence" is wrong.
The practice has sparked the interest of the NSW Fair Trading, Minister Anthony Roberts, who said selling returned goods as new without marking them as such was a breach of Australian law.
Earlier today this website reported that Sydneysider Darryl Mason was sold a "new" portable hard drive that was filled with pirated movies and which, he suspects, contained malware that corrupted his work.
Numerous readers have responded to the story with their own examples of being sold "new" goods by Dick Smith that turned out to have previous owners' content still stored on them or warranty cards already filled out.
The practice does not appear to be limited to Dick Smith with several readers reporting similar experiences with other retailers. However, the highest proportion of complaints came from people who said they bought from Dick Smith.
Earlier Dick Smith said Mason's hard drive had been returned by a previous customer and that the company had "procedures in place to thoroughly check and restore settings on all units when they are returned but on this occasion the process wasn't implemented".
Asked whether it was appropriate or legal to sell returned goods as new, Dick Smith said today it was a "one-off occurrence" and that it was investigating its procedures.
But a former Dick Smith staffer who worked there for three years up until July this year said on condition of anonymity that while there was a procedure to mark returned goods as such, this was rarely followed.
The staffer said USB sticks, hard drives, computers or other data recording devices that were returned to the retailer were supposed to be placed into a pile called "quarantine".
Under normal procedure, a round red and white label is then affixed to the packaging marking it as either "returned", "change of mind" or "shop soiled", with a brief description.
"It's not very often followed, which is quite sad because then the customer has the belief that it's a new item," the former staffer said.
Another former staff member, who for a time was a store manager, blamed the retailer's returns policy.
"Largely due to the silly 14-day No Questions Asked Return, I would frequently get customers purchasing items knowing full well that they were going to return those items after use (this was prevalent during sports weekends on long weekends," the former staffer said.
"There was no possible way for us to check hard drives or MP3 players when they were returned due to the fact that PCs were set up to have their USB connections disabled. "
She said if the customer returning the goods said there was a fault, the product would be returned to the manufacturer for a claim, but if the customer simply no longer wanted the product the return had to be accepted.
"However, with the items that were re-sellable, we were to advertise that they were in fact returned, and offer them at a discounted price," she said.
Comments received from customers include:
"Yep, same thing here. Bought a 'brand new' hard drive from Dick Smith in the city which was half-filled with pirated movies."
"I bought a 'new' Apple TV device from dick smith - it had someone's account entered & AppleCare expired."
"I bought a 'new' PlayStation 3 console a few years ago from their Roselands store. I found out when I tried to register it for warranty purposes with its serial number, which had been registered by the previous owner."
"I bought a cordless phone they claimed was only store opened ... when I got home there was heaps of stored phone numbers on it."
"I purchased a new Toshiba from Dick Smith Electronics two years ago and found that it had been used. Included on it were the eBay purchase details, from I assume, the previous owner ... I was not impressed by the store would do nothing about it."
"A few years ago, my friend and I both bought Macs from Dick Smith. Both of the computers turned out to be used - they were dirty, had other people's passwords on them, had opened packages and, in my friend's case, was missing the mouse. When we contacted Dick Smith we were told that the computers weren't sold as 'new' or as 'used' – they were just 'for sale'."
"I recently bought a smartphone which I had to return ... Dick Smith gave me another one but I did notice that some of the accessories were different. I told the sales staff that I did not get a memory card with the first phone but ... they refused to give me memory card and referred me to the manufacturer."
"I worked for a number of years for Next Byte (An Apple dealer) – they would supply sales staff with a brand new Mac each time one was released – the old one? It was cleaned up and returned to stock as new. Some of these 'new' machines have been used for a year or more."
"They tried to pass off a returned laptop as new when my daughter bought one last year, it stuffed up within a couple of days, they wanted to fix it under warranty, we demanded a new one, so far so good who knows if it's also a returned laptop."
"I purchased a digital voice recorder last year from Dick Smith. It was supposedly new but when I unpacked it, it already had some recordings on it."
"I bought a new LCD TV from them last year. When I plugged it in it had dead pixels. I took it back to exchange it for a new one and they put the malfunctioning one straight back onto the shelf. Disgraceful."
Several customers have reported buying PlayStation games consoles from Australian retailers only to find a game disc already in the drive.
Users of the Whirlpool forum have also contributed their own anecdotes:
"DSE once wanted to sell me a hard drive which was obviously returned by previous customer. The drive was out of the box and had fingerprints all over it. I asked is this new and the salesman said yes," wrote one.
Another said they bought a "brand new" laptop from JB Hi-Fi only to find it had a password, registered software installed that did not come with the machine and was registered with a Hotmail address already in place.
One reader, Kirsty O'Brien, had a similar experience at Bunnings Warehouse when she bought a portable light fitting that had to be assembled.
"In assembling it I discovered a fault (stripped thread) and returned the light fitting and asked for a replacement. They refunded my money and told me to just buy another light," she said.
"I bought another one and discovered the same fault with the replacement. When I took the replacement back I found my original light fitting had been returned to the shelf for resale.
"When I looked closely I could see that every product on the shelf had been opened up and removed from packaging and put back in the box. I guess all the lights had the same problem, and Bunnings didn't care."
This reporter is on Twitter: @ashermoses