Any refund should be given to the consumer in the same form that the consumer used to purchase the item. If consumers buy on credit, they are entitled to a credit refund. If they use cash then they are entitled to a cash refund.

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Where consumers are entitled to a refund, traders cannot place any additional conditions on those terms. This includes goods such as swimwear, where traders sometimes assert that they cannot give a refund because of health regulations. The Department of Health does not control the return of any non-food items. In fact, there are no such regulations and consumers can request a refund under the same conditions as any other type of goods. The same refund conditions also apply to goods purchased at a sale.

However, where a trader offers a refund policy that allows consumers a refund over and above what the law requires, the trader may set the terms and conditions in relation to this additional policy.  These terms and conditions might include a time limit for when goods can be returned and whether they will provide a credit note, refund or exchange.

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As outlined above, there are circumstances when consumers can insist on a refund. In other instances, a repair or exchange may be negotiated. Common sense should be used in these situations.

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Credit notes are generally offered as a goodwill gesture when consumers are not entitled to a refund and they allow consumers to buy something else at the store. However, if consumers are returning goods because of circumstances where the laws state they are entitled to a refund, traders cannot substitute this right with a credit note.

Be aware that credit notes sometimes have a time limit or an expiry date. If the credit note isn’t likely to be used within that period, the consumer should negotiate with the trader to have this period extended.

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Many traders offer gift certificates where consumers pay an amount of money and receive a certificate allowing them or another person to purchase goods or services to that value at a later date.

When purchasing gift certificates consumers should check whether there are any terms and conditions, such as ‘excluding sale items’. Traders must provide notice, preferably in writing, about these conditions and cannot impose conditions that were not stipulated at the time the certificate was purchased.

Consumers should also make sure that the gift certificate is kept in a safe place and treated like cash. Many certificates are not recorded with details of the purchaser so anyone can return and use the certificate. If the certificate is lost, consumers may not be able to redeem them.

If a dispute arises with respect to a gift certificate the matter would need to be addressed by the purchaser of the certificate, as the recipient does not have a contract with the trader. Similarly, if a complaint is made to the Office of Fair Trading it would have to be lodged by the purchaser of the gift certificate.

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For smaller domestic and personal items, it is generally accepted that consumers will return the goods to their place of purchase for a refund. If a customer wants to cancel a contract due to a breach of condition, the customer is entitled to cancel by:

• serving the supplier with a notice in writing signed by the customer giving particulars of the breach; or
• returning the goods to the supplier and giving the supplier either verbally or in writing, particulars of the breach.

Disputes can arise when freight costs are incurred because the item is large, such as household furniture, or where the goods were delivered by post or courier.

Bearing in mind that a consumer has a legal right to cancel a contract and receive a refund if there is a breach of the statutory condition of merchantable quality, consumers should not incur costs for returning goods that are so defective they should not have been sold. If the goods don't work, break down or develop a serious fault, then the trader must put consumers in the position they would have been in if the fault had not occurred.

In these circumstances, consumers are not responsible for any costs for returning goods from the trader to the manufacturer. Traders may have a claim against their supplier for their costs incurred as a result of a faulty product.

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Generally, it is not illegal to cancel a cheque once you have given it to another party. However, the rights of the parties to a contract depend on a variety of circumstances such as the nature of the contract, any written or oral conditions, any representations made and any statutory requirements applicable. In some instances you may be liable to pay damages for breach of contract.

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If after contacting the trader you still cannot solve a refund issue contact us on 13 32 20 or visit your local Fair Trading Centre.

Case study: damaged bridal gown - read about Amy and how her search for the perfect gown went horribly wrong...

Case study: faulty dishwasher - read about Megan and how she got a dud delivered to her door...

Case study: faulty mobile phone - read about Sharon and how the gift for her daughter turned out to be a disappointment...

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