Signs that state ‘no refunds’ are unlawful, because they imply it is not possible to get a refund under any circumstance – even when there is a major problem with the goods or service.
For the same reason, the following signs are also unlawful:
Signs that state ‘No refunds will be given if you have simply changed your mind’ are acceptable.
You do not have to give a refund when a consumer simply changes their mind about the goods.
But you can have a store policy to offer a refund, replacement or credit note when this happens. If so, you must abide by this policy.
When goods fail to meet a guarantee, a consumer has a right to a remedy – an attempt to put the situation right. Common remedies include repair, replacement and refund.
The supplier has to provide the remedy when goods do not meet the following consumer guarantees:
The manufacturer has to provide the remedy when goods do not meet the consumer guarantee on repairs and spare parts, and any express warranty. The importer is responsible for these things when the manufacturer does not have an office in Australia.
The consumer can claim from the manufacturer and the supplier, if goods:
Whether you offer a repair, replacement, refund or other remedy depends on whether the problem is:
Consumer guarantees apply to both. When goods fail to meet a consumer guarantee, the consumer can also claim for consequential losses – compensation for their costs in time and money because something went wrong.
For major problems, the consumer can choose to:
A major problem with goods is when:
If the problem is not major and can be repaired within a reasonable time, the consumer cannot reject the goods and demand a refund.
They can ask you, as the supplier, to fix the problem. You may choose to:
A consumer must tell you if they intend to reject goods, and explain why. They must:
A consumer cannot reject goods when:
When the consumer tells you they are returning the goods, the goods become your property. You are responsible for any loss or damage to the goods from this time.
The consumer must return the goods to you unless the cost of returning, removing or transporting is significant – for example, the size makes transportation costly.
If so, you must collect the goods at your own expense and within a reasonable time.
Examples of goods you would have to collect:
You must repay any money paid by the consumer for the returned goods, and return any other form of payment made by the consumer – for example, a trade-in.
If this is not possible, you must refund the consumer the value of the item.
You must not:
You must provide goods of the same type and similar value. If such a replacement is not reasonably available, the consumer may choose a repair or a refund.
The consumer must return goods to you. If this involves significant cost to the consumer, you must collect the goods at your own expense.
The consumer guarantees that applied to the original goods will apply to the replacements.
For example, a consumer buys a new mobile phone. Due to a problem, the supplier replaces it. Consumer guarantees apply to the replacement phone as if it were a new mobile phone.
If a supplier cannot repair the goods (for instance, because the supplier does not have the requisite parts) or cannot do so within a reasonable time, the consumer can:
For example, several buttons came off a consumer’s new shirt due to poor stitching. The tailor who made the shirt could not supply matching buttons. The consumer is entitled to ask for a replacement or refund.
You must fix the problem within a reasonable time. What is ‘reasonable ’ will depend on the circumstances.
For example, a supplier would be expected to respond quickly to a request for a repair to an essential household item, such as a water heater. For goods used less often, such as a lawnmower, the reasonable time for repair would be longer.
If you refuse or take more than a reasonable time to repair the goods, the consumer can:
There are some restrictions on this – see When a consumer rejects or returns goods.
You cannot reduce a refund when the consumer has brought the goods back without their original packaging. See When the consumer chooses a refund
Consumer guarantees will also apply to replacement goods. See When the consumer chooses a replacement.
If the consumer has no option but to take goods elsewhere for repair, they do not have to get your agreement or provide quotes. However, you only have to pay the ‘reasonable costs’ of repair.
A reasonable cost would be within the normal range charged by repairers of such goods, and include:
For example, the zip on a pair of trousers breaks after one week. The retailer tells the consumer the repair will take a month. The consumer explains he needs the trousers for work urgently but the retailer offers no other option. The consumer gets the zip replaced by a tailor for $35. When the consumer asks the retailer to pay for this, the retailer says that their dressmaker would have done it for $15. If the higher price is a normal price for a tailor (not a dressmaker) to fix the trousers, the retailer would have to reimburse the consumer.
A repairer of goods (whether or not this is the supplier) must notify the consumer of particular information before accepting the goods for repair.
Repairers that fail to comply may face:
Consumers often buy goods linked to certain services. An example is a mobile telephone, often linked to a contract for network services.
A consumer who has returned goods within a reasonable time and is entitled to a refund, may also cancel the linked service contract. They can do this when returning the goods, or within a reasonable time.
Such contracts do not terminate automatically.
For example, a consumer signs up for a package that includes a modem and internet access. She rejects the modem because it turns out to be faulty but chooses to keep her internet connection. Alternatively, she could reject the faulty modem and cancel the connection.
A consumer who cancels a linked service contract is entitled to a refund or can refuse to pay for any services not yet received.
You do not have to give a refund for any services the consumer has received up to the time they reject the related goods.
For example, a consumer subscribes to 12 editions of a cooking magazine for $200, including $80 for delivery. She receives only three editions in six months, so cancels the subscription and delivery. The supplier must refund $150 for nine magazines not received - $90 for the magazines and $60 for delivery.
A consumer is not entitled to a remedy when you do not meet one of the consumer guarantees due to something:
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