In short
A refund and returns policy explains how a business handles change-of-mind returns and, separately, its obligations under the Australian Consumer Law's consumer guarantees for faulty, not-as-described or unfit-for-purpose goods. The two need to be clearly distinguished, because change-of-mind returns are entirely optional business policy while consumer guarantee remedies are a statutory entitlement that no 'no refund' sign or website clause can override.
Two different things people call 'a refund'
Almost every dispute we see about a returns policy comes down to conflating two different rights. Change-of-mind returns — a customer simply not wanting the item anymore — are not required by law at all; a business can lawfully offer no change-of-mind returns, or offer them only within a time limit, only for full price items, or only as store credit. But where goods have a fault, don't match their description, or aren't fit for a disclosed purpose, the customer is entitled to a remedy under the Australian Consumer Law's consumer guarantees regardless of any change-of-mind policy, and that entitlement includes cases outside any change-of-mind window. We draft the policy to keep these two categories visually and substantively separate so staff applying it, and customers reading it, don't confuse a discretionary perk with a legal right.
'No refund' signage and clauses are unlawful
A sign or clause stating 'no refunds' or 'no refunds on sale items' without qualification is a well-known ACCC enforcement target, because it misrepresents a customer's rights under the consumer guarantees — sale items are just as entitled to a remedy for a genuine fault as full-price items. We draft policies with the required qualification built in, so any change-of-mind restriction is expressly stated not to affect the customer's rights where a good is faulty or not as described.
Major versus minor failures and who chooses the remedy
Where a genuine consumer guarantee failure exists, the Australian Consumer Law distinguishes a major failure (where the customer can choose between refund, replacement, or keeping the goods and claiming compensation for the drop in value) from a minor failure (where the business can choose to repair, replace or refund). We draft the policy to reflect this correctly rather than presenting a single flat process for all faults, because businesses that always insist on repair-first, even for major failures, are misapplying the law and exposing themselves to complaints.
Practical returns mechanics
Beyond the legal framework, the policy needs workable detail — return shipping cost allocation (generally the business bears this for a guarantee-based return, but can require the customer to bear it for change-of-mind returns), proof of purchase requirements, condition and packaging requirements for change-of-mind returns, and processing timeframes for refunds once goods are received. We calibrate these to be commercially sensible without drifting into terms that, read literally, would restrict the statutory guarantee remedies.
Digital goods, services and non-returnable items
For digital products, subscriptions, and services, we address what a 'return' even means (since there's often no physical good to send back) and how a guarantee-based remedy — such as a service not performed with due care and skill — is handled contractually, along with clearly flagged exceptions like perishables, custom-made goods, and hygiene-sensitive items, which can be validly excluded from change-of-mind returns but never from consumer guarantee remedies where genuinely defective.
What the fixed fee covers
- Drafting of change-of-mind and consumer guarantee return provisions as distinct sections
- Major and minor failure remedy language compliant with the Australian Consumer Law
- Return shipping, proof of purchase and processing timeframe terms
- Treatment of digital goods, services and non-returnable item categories
- Consistency check against your online terms of sale
Mistakes we see
- Displaying or publishing a blanket 'no refunds' statement without the required consumer guarantee qualification
- Treating a genuine fault as a change-of-mind matter and applying restocking fees or a shorter window
- Always offering repair first even for failures a customer is entitled to reject outright
- Excluding sale or clearance items from all remedies, including guarantee-based ones
- Failing to clarify how 'returns' work for digital products or services
Who this is for
- Online and bricks-and-mortar retailers selling directly to consumers
- Businesses running seasonal sales or clearance events
- Subscription and digital product businesses
- Retailers who have received an ACCC or Fair Trading complaint about returns wording
Frequently asked questions
- Can I refuse all refunds on sale items?
- You can refuse change-of-mind refunds on sale items, but you can never refuse a remedy for a genuine consumer guarantee failure — a faulty or not-as-described sale item is entitled to the same remedy as a full-price item.
- Who decides whether I repair, replace or refund a faulty item?
- It depends on whether the failure is major or minor. For a major failure the customer chooses between refund, replacement or keeping the item with compensation; for a minor failure, the business can choose the remedy, typically starting with repair.
- Can I charge a restocking fee?
- Yes, for change-of-mind returns, provided this is clearly disclosed before purchase — but a restocking fee can't be applied to a return arising from a genuine consumer guarantee failure.
- Who pays return shipping?
- For a genuine fault or consumer guarantee failure, the business generally bears the cost of return shipping. For change-of-mind returns, the policy can validly require the customer to cover it.
- Do digital products need a returns policy?
- Yes — while there's no physical return, consumer guarantees still apply to digital goods and services (for example, a service not supplied with due care and skill), and the policy should explain how a remedy is provided in that context.
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