Rights and responsibilities

The goods consumers purchase must be of merchantable quality. Goods and services supplied to consumers must also be reasonably fit for any particular purpose made known by the consumer to the supplier except where the consumer does not rely, or it is unreasonable for the consumer to rely, on the skill or judgement of the supplier.

Consumers may ask for a refund if the goods purchased:

• have a basic, serious fault that was not known by the consumer at the time of purchase
• do not do the job that the consumer was led to believe they would do
• do not match the sample the consumer was shown, or
• do not fit their description.

Consumers and traders may negotiate other solutions such as a repair or replacement but under these circumstances a consumer has a legal right to cancel a contract (rescind) and receive a refund if there is a breach of that contract.

Where a dispute arises between a consumer and a trader, NSW Fair Trading can negotiate with the parties to achieve an acceptable solution.

Remember:  you cannot ask for a cash refund if you did not pay cash.

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Consumers are not entitled to a refund when they:

• change their mind about a product. This includes when a consumer has found a cheaper product elsewhere, has bought a gift that is unsuitable, or their circumstances have changed and they no longer require the goods
• knew, or should have known about a fault when the goods were bought, for example as seconds. However, if a second has a fault that the consumer was not aware of, or could not have discovered upon a reasonable inspection when the item was bought, their rights are not affected
• are unable to prove from whom and when the item was purchased. However, traders should not refuse a refund solely because there is no receipt, if they are satisfied that the goods were purchased from their store
• are responsible for damaging the goods by not following the instructions, or misusing the product.

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If a consumer wants a refund they should:

• report the details of the fault or take the goods back to the trader as soon as possible
• state what remedy they would like
• provide proof of purchase when returning the goods
• be sure that they did not cause the fault
• stop using the faulty item
• make sure they care for the goods while in possession.

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A trader does not have to provide a refund if:

• no proof of purchase is offered
• customers simply change their mind
• the goods have been damaged by abnormal use after purchase, or
• customers knew, or should have known about any faults when they bought the goods, for example as seconds. However, if a second has a fault that the customer was not aware of, or could not have discovered upon a reasonable inspection, at the time of purchase, they would be entitled to a refund.

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Many traders offer refunds over and above their legal requirements as a gesture of goodwill for their customers. When buying goods, consumers should check with the trader if they offer refunds in addition to what the law requires.

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Traders can reduce the risk of confusion and disagreements by making their customers aware of any additional policies they have regarding refunds. However, traders should ensure that any sign states the customer's rights, including those provided by law. Signs must not mislead consumers into believing that they have no right to a refund when they may have that right under the law. Examples of illegal signs are:

• 'No Refunds'
• 'No refunds after 7 days'
• 'We will exchange or repair or give credit notes but we do not refund.

Refund signs with disclaimers in small print may also be misleading because consumers may not see the disclaimers.

View or download a sample refund sign Our refund policy in PDF format (size: 32kb).  

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In some circumstances a consumer may only be entitled to a partial refund, for example, where the fault was not brought to the attention of the trader within a reasonable amount of time after the fault was discovered.

If the consumer has already had a reasonable amount of use from the goods, there may only be a right to a partial refund.

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The right to cancel a contract and obtain a refund is lost in certain circumstances, for example, after a lapse of 'reasonable time' or damage by abnormal use.

Reasonable time will depend on the circumstances, but generally is influenced by the price paid for the goods concerned.

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Written warranties provided by the manufacturer or seller are known as voluntary or express warranties. The manufacturer and seller must stand by their voluntary warranty.

Conditions are essential terms of a contract and a breach of a condition entitles the consumer to cancel the contract and obtain a refund of their money.

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Services must generally be carried out with due skill and care. This means that they should be of a standard and quality that could be reasonably expected from a competent person in that particular trade or industry.

It should be made clear to the service provider what a consumer wants done. If a consumer insists on having a service carried out in a particular way, or with particular materials against the service provider's advice, the service provider cannot be held responsible if the result is unsatisfactory because the method or materials were unsuitable. The parties involved should make a written note of any such requests.

If the service provider fails to meet its obligations, the consumer can claim compensation for expenses incurred as a result of loss or damage.

Some service providers try to limit their responsibility by using signs like 'No responsibility for loss or damage' or 'Goods left for repair at your own risk'. These signs are misleading. A consumer must generally be compensated for repairs or services that are not carried out with appropriate care and skill. For instance, carpet cleaners are responsible for making sure that their cleaning method doesn't negligently result in carpet shrinkage.

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If after contacting the trader you still cannot resolve a refund issue call 13 32 20 or visit your local Fair Trading Centre to find out your options.
Fair Trading Centre locations

 Listen to information on Refunds (3:00 mins)

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