Everything you need to know about refunds in Australia

The laws around refunds in Australia are quite different to refund laws in other countries. Both the Australian Competition and Consumer Commission (ACCC) and the Department of Fair Trading have detailed descriptions of the Australian laws around refunds. To help, we've summarised them all for you.

Do you have a question about refunds that we haven't answered? Get in touch with us in the comments below.

Am I entitled to a refund?

Not really. Only in certain circumstances.

Australian consumer law says that a store or seller MUST provide a repair, replacement or refund if an item is faulty or significantly not as described.

For example, if you bought a dress online and it arrived with a stain on it, the item could reasonably be considered faulty. The retailer would be required to provide either a refund or send you a new dress (without charging postage) as a remedy.

Similarly, if you've purchased a food processor and it has worked fine for a week but then suddenly broke you may also be entitled to a remedy. If you've used the product as described, there is a reasonable expectation that the product will last at least until the end of the warranty period. Again the retailer or supplier would be required to provide a remedy.

Another example: if you bought a blue vase online and when it arrived it turned out to be red, then you could also be entitled to a remedy. If the actual product is significantly different from both the images and product description, you're entitled to a remedy.

Many retailers will ask whether you prefer a refund or a new product, but this is a courtesy and the retailer has the final say.

Am I entitled to a refund if I've changed my mind?

No, you're not.

Let's say you walk into a store and buy something and then walk back in one minute later with the receipt and try to return it, even then you're not entitled to a refund. Australian retailers are not required by law to refund anything simply because a customer has changed their mind.

That said, many retailers including David Jones, Myer and THE ICONIC will happily offer refunds for change of mind. Lots of stores do! So if you often find that you change your mind about purchases, you might want to stick to shopping with stores that definitely do offer refunds for change of mind.

It's worth checking the returns policy at the store you're shopping with before you make a purchase. Otherwise you might not be able to get your money back.

The "Am I entitled to a refund?" checklist

Not sure if you're entitled to a refund? Run through this checklist and you'll be able to work out if you can get a refund under Australian law.

I don't have my receipt. Can I still get a refund?

No, not generally.

Even if the item you bought is faulty, you still need to present a valid proof of purchase to be eligible for a repair, replacement or refund. You'll find that many retailers will accept returns without a proof of purchase but they are NOT legally required to.

A business has the right not to supply you with a repair, replacement or refund for a faulty item unless you show valid proof of purchase.

According to the ACCC, proof of purchase is defined as:

A receipt can come in the form of a:

• A GST tax invoice or
• A cash register or hand written receipt

Other types of proof of purchase include:

• Credit or debit card statement
• A lay-by agreement
• A receipt or reference number given for phone or internet payments
• A warranty card showing the supplier’s or manufacturer’s details and the date or amount of the purchase
• A serial or production number linked with the purchase on the supplier’s or manufacturer’s database
• A copy or photograph of the receipt

As long as you have one of these, you are legally entitled to a refund if your item is faulty.

What if a store is only offering a refund for store credit?

Store credit refunds are tricky. If you've returned something because you changed your mind or found the item cheaper somewhere else, then a business is entitled to deny a refund. But if businesses do decide to offer refunds in these instances, they can decide how to refund your money. In this case, if the business only wants to issue store credit for "change of mind", then that is legally allowed.

In the case of faulty items, however, you're most certainly entitled to a full refund. If a business decides the best remedy is a refund then the business is required to issue a refund based on the original form of payment. Here is an excerpt from the ACCC:

"Refunds should be the same amount you have already paid, provided in the same form as your original payment."

This means that if you paid by Mastercard, the retailer will need to process the refund on your Mastercard. If you paid using cash, you should get cash back. If you paid for your item using a gift card or credit note, then the store will provide your return in the form of a credit note. If you made a split payment (half cash, half card), your refund will be applied in the same way.

The store I purchased from says it doesn't offer refunds. Is this allowed?

No, it's not. Stores displaying signs saying "no refunds" imply that they will not offer remedies in the case of a faulty items. This is illegal.

Regardless of what signs a store may have displayed, you will always be entitled to a refund if an item you bought doesn't meet its "consumer guarantee", e.g. it's damaged or doesn't work like it should.

You can read more on "no refund" signage in the ACCC's guide.

The item I bought is faulty. Can I get a refund?

This is the one instance where you're absolutely entitled to a remedy.

According to the ACCC, any product you buy must be of "acceptable quality". It must be "safe, lasting, with no faults" and most importantly it must "do all the things someone would normally expect them to do". For example, a kettle should be able to boil water or it would be considered faulty.

If you've purchased something, online or in-store, and it doesn't work as it should, then the business that sold it to you is required by law to provide you with a repair, a replacement or a refund. The business can choose which one of these three is most appropriate. But it shouldn't come at any extra cost to you and if it does, the business is required to compensate you for that extra cost.

Note: if you have "misused a product in any way that caused the problem" the item is not considered faulty and you are not entitled to a refund. This includes not following correct washing instructions.

What if I bought something online? Who pays for the return postage?

If you are returning something because you simply changed your mind, then you will often be required to pay for the return postage. Some online stores like THE ICONIC, Styletread or ASOS will offer "free returns" meaning they will cover the return postage charge, but they are not required by law to do so.

If you're returning a product because it's faulty and doesn't meet your consumer guarantees, then the remedy provided by the retailer should not come at any extra cost to you. And if it does, the business will be required to reimburse you. It is not required to reimburse the initial postage charges.

For example, if you purchase a dress online and when it arrives you find it has a broken zipper, the retailer would be required to cover the postage for sending the broken dress back. It can do this in a few ways including asking you to pay for the postage and then reimbursing you or sending you a prepaid postage label. In some instances, retailers will not require you to send back the broken item.

Some retailers will prefer you to cover the return charges in case the item isn't actually faulty. According to the ACCC:

"If the product is found not to have a problem, you may be required to pay the transport or inspection costs. An estimate of these costs should be provided to you before the product is collected, and the costs must not be inflated in an attempt to deter you from pursuing your claims."

Refund advice

It can be quite frustrating when stores do not offer refunds for "change of mind" or only for store credit. To prevent yourself from being caught in this situation, you can try to only shop with stores that have an open refund policy. Stores like THE ICONIC, David Jones and Myer will accept "change of mind" returns, so these are some of the safer stores to shop with.

It's also very important to keep your receipt. Even if your item is faulty, businesses can deny you a return if you don't have adequate proof of purchase. It's worth taking a photo of the receipt on your phone just in case you lose it. Photos of receipts are accepted.

With online purchases, the store is required to email you a receipt, so you should always have a copy unless you purposely delete it.

If you are not sure what your rights are about a specific purchase, you can try the ACCC's 'Repair, replace, refund problem solver' – a short quiz to help you work out what your next steps are.

If you request a refund for an item and you're not happy with the retailer's response, you can make a report to the ACCC. They are not able to investigate individual disputes, but they can accept and record reports of information about business practices and behaviours that concern you.

ACCC and Fair Trading refund policy

Here are the direct excerpts that discuss refunds from the Fair Trading and ACCC websites.

From Fair Trading: "You have the right to a repair, refund or replacement if goods or services bought in Australia (from 1 January 2011) do not meet one or more consumer guarantees. Guarantees apply to both major and minor problems. The type of remedy (e.g. a repair or a replacement or a refund) and who must provide it, will depend on the problem and which consumer guarantee was not met."

Consumer guarantees are defined by the ACCC in the below passage.

"Since 1 January 2011, the following consumer guarantees on products and services apply.

Products must be of acceptable quality, that is:

• safe, lasting, with no faults
• look acceptable
• do all the things someone would normally expect them to do.

Acceptable quality takes into account what would normally be expected for the type of product and cost.

Products must also:

• match descriptions made by the salesperson, on packaging and labels, and in promotions or advertising
• match any demonstration model or sample you asked for
• be fit for the purpose the business told you it would be fit for and for any purpose that you made known to the business before purchasing
• come with full title and ownership
• not carry any hidden debts or extra charges
• come with undisturbed possession, so no one has a right to take the goods away or prevent you from using them
• meet any extra promises made about performance, condition and quality, such as life time guarantees and money back offers
• have spare parts and repair facilities available for a reasonable time after purchase unless you were told otherwise."

According to Fair Trading a business can refuse a refund on the following terms.

"A business may refuse to give you a free repair, replacement or refund if:

• you simply changed your mind
• you misused the product or service in any way that contributed to the problem
• you asked for a service to be done in a certain way against the advice of the business or were unclear about what you wanted
• a problem with a service was completely outside of the business’ control."