Understanding Refunds, Replacements, and Repairs Under Australian Consumer Law (ACL)
When customers purchase products or services in Australia, they have rights under the Australian Consumer Law (ACL). These rights ensure they receive products and services that meet certain standards. If these guarantees aren’t met, businesses must offer a repair, replacement, or refund, depending on whether the failure is major or minor. Here’s what businesses need to know to stay compliant.
Consumer Guarantees Apply to Gifts Too
Consumer rights don’t just apply to the person who made the purchase—they extend to the recipient of a gift as well. That means if someone receives a faulty item as a present, they have the same rights as if they had purchased it themselves. Businesses cannot modify, limit, or exclude consumer guarantees, even through contracts or store policies.
Misleading Refund Policies Are Illegal
Businesses must be careful about the messages they communicate to customers regarding refunds. It is unlawful to mislead consumers about their rights, which means avoiding signs or policies that state:
‘No refunds’—a business cannot refuse a refund outright if an item is faulty.
Refunds are only available within a certain timeframe—consumer guarantees do not have a set expiry date.
‘Exchange or credit note only’ for sale items—sale items are still covered under consumer guarantees.
A real-world example: In November 2024, Koala & Tree Pty Ltd was fined $56,340 by the ACCC for making false or misleading claims about consumers’ rights to remedies for faulty products.
When a Customer Changes Their Mind
While businesses must provide remedies for faulty goods, they do not have to offer refunds if a customer simply changes their mind. However, if a store policy does allow for refunds or exchanges in these cases, the business must clearly display this policy at the point of sale and on its website—and follow it consistently.
Proof of Purchase Requirements
A business has the right to request proof of purchase before providing a remedy. However, customers are not limited to paper receipts—acceptable proof of purchase can include:
A credit or debit card statement
A receipt or reference number from an online or phone transaction
A copy or photograph of the receipt
Small Businesses Can Be Consumers Too
Small businesses purchasing goods and services are also covered by consumer guarantees if one of the following applies:
The product or service costs less than $100,000 (including GST).
It is commonly purchased for personal, domestic, or household use.
It is a vehicle or trailer used to transport goods on public roads.
However, consumer guarantees do not apply if the goods are purchased for:
Resupply (reselling)
Use in production or manufacturing
Repairing or treating other goods
Final Thoughts
Understanding consumer rights is essential for both businesses and customers. Staying informed and compliant with the Australian Consumer Law helps businesses build trust and avoid penalties. If you’re unsure about a refund, replacement, or repair situation, check official ACCC guidance or seek professional advice.
This information was sourced from the ACCC. If you need any assistance in this area, please contact us today.
Please note that this is a general and brief update, it does not purport to be comprehensive legal advice of all information and/or relevant to your circumstances. Consequently, specific legal advice for each of your circumstances should be obtained first before taking or not taking any action with respect to this area.