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“No refunds” unlawful

November 06, 2016

Christmas & Australian Consumer Law Obligations

As consumers start their Christmas shopping early, the National Retail Association are reminding retail businesses to revise and align their exchange, return and refund policies to meet the Australian Competition and Consumer Commission standards.

The ACCC Commissioner, Sarah Court, reported that many clothing retailers have been displaying “No Refunds” signs and selling sale items on terms that purport to exclude Australian Consumer Law rights.

All businesses should be aware that:

  • They cannot refuse to provide a remedy to an issue if the goods were faulty or defective and were bought in a sale.
  • It is unlawful to display signs of ‘No Refunds’ of ‘No refunds or exchanges on sale items’.
  • There are no specific expiry dates and retailers cannot restrict the period for a remedy to an item fault.
  • Retailers are not obliged to offer refunds if the item is not faulty, is still fit for purpose, or if the customer has changed their mind.

When reviewing your terms and conditions, retailers need to be aware that consumer guarantees under the ACCC apply to all purchases, inclusive of sale items.


If there are minor problems with a product, you can offer a free repair instead of a replacement or refund. If there are major problems with a product, you will need to offer a choice of a replacement or a refund.

Replacements and Refunds

In the cases of major problems, products replaced should be an identical type to the product originally supplied. Whereas, refunds should be the same amount that the customer paid in the same form as original payment.


The business is not responsible for the returns of products that can be posted or easily returned. Only in particular circumstances will a business be responsible for the payment of returns. These include if the product is faulty or has a problem, and when the item is too heavy or difficult to remove, for example a bed.

An example

Lucy purchased her dress for a Christmas day function a few weeks prior to Christmas. A sale came up at one of her other favourite retail stores and she noticed another dress that would suit her better. Lucy took the first dress back and demanded a refund as she did not want it anymore. As there were no problems with the dress and it was fit for its purpose, the retailer was not obliged to give her a refund. Instead they kindly offered her the option to keep the dress or exchange it. Although Lucy was upset about not getting her money back, but the staff dealt with the situation so well, that she came to realise changing her mind did not validate the right to a refund.

The National Retail Association are urging members to review their refund and return policies to ensure they comply with Australian Consumer Law. For more information or assistance, please contact the National Retail Association Legal Hotline on 1800 RETAIL (1800 738 245).

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