If you want to avoid problems with consumer issues it helps to get your facts right.

Refunds myth

‘I don’t like it. But I can always return it and get my money back.’

Refunds fact

Not necessarily. Legally, refunds are only available in fairly limited circumstances.

You are entitled to ask the trader for a refund if the item you bought is:

• not of ‘merchantable quality’
• not the same as the sample shown or described in advertising or by the salesperson
• not fit for the purpose you made known to the trader and you have relied on the trader's judgement.

You are not automatically entitled to a refund if you simply change your mind or you later discover that you picked the wrong colour or the item doesn’t fit.

However, many large retailers have generous, ‘hassle-free’ refund policies. They will refund your money even though the item is perfectly okay. These policies encourage you to shop at their outlets. They go beyond what is required by law. By all means, take advantage of them.

Some small retailers can’t afford to be quite as generous. They will often stick to the law. If you have any doubts about the suitability of an item, check the retailer’s refunds policy before you buy.

The following signs in stores are illegal as they misrepresent your rights if the product is, for example, faulty: ‘No refunds’, ‘No refunds after 7 days’, ‘We will exchange or repair or give credit note but we do not refund’. However, a sign which states: ‘No refund for incorrect choice’ or ‘No refunds if you change your mind’, is legal.

Pricing myth

‘They have got to sell it to me at the lowest marked price.’

Pricing fact

Not necessarily. When an item is marked with two prices it is illegal for the retailer to sell you the item at a price higher than the lowest marked price. However, in some cases, the retailer can withdraw the item from sale.

Beware of ‘bait advertising’ where traders entice customers into their stores by advertising goods at very low prices but don't have the sale items in stock. This may be illegal. Retailers must ensure that reasonable supplies of the products are available during sales.

Deposit myth

‘I’ve changed my mind. But I can still get my deposit back.’

Deposit fact

It depends. Whether you realise it or not, the piece of paper you sign is a contract.

Some contracts specify that the retailer is entitled to retain the deposit, or part of it, if you don't go ahead with the transaction.

A lot of people think deposits are refundable. But when you place a deposit on an item, you may be entering into a binding agreement to proceed with the transaction. If you change your mind, the trader may be entitled to retain all or part of your deposit.

The actual amount the trader is allowed to retain depends on the circumstances. This money compensates the trader for the time and expense devoted to the transaction, but should not be so high as to constitute a penalty.

As a gesture of goodwill, many traders will return your deposit. However, it is always a good idea to think the deal through before handing over a deposit.

‘Cooling-off’ period myth

‘I’m always protected by a ‘cooling-off’ period. That means I can change my mind and withdraw from the sale even though I have signed a contract.’

‘Cooling-off’ period fact

Generally speaking, when you sign a contract you are legally bound by its terms and conditions. It’s a binding document. Once you have signed the contract, you can’t back out.

‘Cooling-off’ periods only apply to a limited number of transactions including:

• direct commerce contracts (telemarketing and door-to-door sales)
• some contracts for the sale of land
• some contracts for motor vehicles where the dealer is also arranging the finance
• contracts with an agency to sell property.

In all cases, specific conditions apply and you need to make sure you fully understand your rights before signing any contracts, even if a ‘cooling-off’ period is available.

Always read any document you are asked to sign. If you don’t understand it, don’t sign it.

Supermarket scanner myth

‘If a supermarket scanner scans an item at a price higher than the displayed shelf price, I can get that item free of charge.’

Supermarket scanner fact

This only applies if the supermarket abides by the voluntary Code of Practice for Computerised Checkout Systems in Supermarkets.

Under this voluntary Code of Practice, if an item covered by the Code of Practice scans at a price higher than the shelf price, the customer is entitled to receive the first item free and all subsequent items (with the same barcode) at the lower shelf price. 

Customer rights myth

‘The customer is always right.’

Customer rights fact

Customers sometimes do get it wrong. But the fact remains that well-informed consumers have a far better chance of successfully asserting their rights.

The NSW Office of Fair Trading provides information on a wide range of consumer issues including settling disputes with traders.

You can view or download our publications from www.fairtrading.nsw.gov.au  or
phone 13 32 20.