Running a business

Offering refund or return options to customers

Most products and services that people buy, hire or lease have automatic consumer guarantees. This means customers can get a remedy - refund, a repair or to have the goods replaced if there is a problem. The type of remedy depends on the problem.

Refunds for returned items

If there is a major problem with the goods or service, the customer can choose to have:

  • a refund
  • the goods replaced or repaired
  • compensation if there's a drop in value for a service.

If the problem with the goods or service is minor, the business can choose to give the customer a free repair instead of a replacement or refund.

The customer is entitled to return something even if:

  • it has been used - faults aren't always obvious at first
  • jewellery, underwear or swimwear have been worn
  • packaging or tags have been
  • it was a gift, but the customer must provide proof of purchase eg - receipt
  • the item was bought online from an Australian business (not a private seller)
  • it was bought from a second-hand store.

However, customers and businesses will need to consider:

  • the item's age, price and condition
  • how long ago it was bought.

The business must contact the manufacturer on behalf of the customer. If a business is no longer trading, the customer can contact the manufacturer directly for a refund or replacement.

Goods that can't be returned

Some goods and services aren't covered by automatic consumer guarantees. Visit Consumer guarantees and warranties for more information about items that are excluded.

Businesses can refuse to accept a return if:

  • the store identified faults before the customer bought the item
  • the customer inspected the item before buying and didn't find faults they should have seen
  • the item was used incorrectly
  • the customer damaged the goods after they bought them
  • the customer changed their mind - some businesses will offer to refund or exchange as a sign of good will.

Returning faulty goods

The business may ask the customer to send goods back to them if there is a problem. Inspecting the item can help the supplier work out exactly what the problem is and if it can be fixed.

Businesses have to give the customer a written repair notice before they start repairs on electronic goods like mobile phones or computers. The notice must say:

'The repair of your goods may result in the loss of any user-generated data. Please ensure that you have made a copy of any data saved on your goods.'

If it's likely that the business will repair using second-hand parts, the notice must say:

'Goods presented for repair may be replaced by refurbished goods of the same type rather than being repaired. Refurbished parts may be used to repair the goods.'

Cost of returning faulty goods

The customer organises the return if it can be posted or easily returned. Items don't need to be returned in their original packages but the customer should:

  • ask about the returns policy and check if the business has a free pick-up service
  • keep proof of purchase for postage or transport costs so the business can refund the cost once the goods are proven faulty
  • wrap the goods so they are well protected during delivery.

The business pays for the cost of returning goods when:

  • the item is too large, heavy or difficult to remove – eg a bed, wide screen TV, ladder stuck in the extended position, or installed goods like a stove
  • the fault means that it's too dangerous or the goods are too fragile to return without an expert's help.

Cost of returning goods that aren't faulty

The customer can be responsible for transport costs if an inspected item doesn't prove to be faulty. The business must:

  • tell the customer about transport or inspection costs, giving them a chance to decide
  • not inflate costs so that the customer decides not to return something.

Contact Consumer and Business Services

Phone

131 882

In person

91 Grenfell Street
Adelaide

Post

GPO Box 1719
Adelaide SA 5001


Page last updated 9 February 2017

Provided by:
Attorney General's Department
URL:
https://www.sa.gov.au/topics/business-and-trade/running-a-business/offering-refund-or-return-options
Last Updated:
09/02/17
Printed on:
21/08/17
Copyright statement:
SA.GOV.AU is licensed under a Creative Commons Attribution 3.0 Australia Licence. © Copyright 2016