Refunds and returns
Most products and services that people buy, hire or lease have automatic consumer guarantees. This means customers can get a remedy - by refund, repair or have the goods replaced if there's a problem. The type of remedy depends on the type of problem.
Refunds for returned items
If there's 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.
See Repair, replace, refund - Australian Competition and Consumer Commission
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's been used - faults aren't always obvious at first
- jewellery, underwear or swimwear have been worn
- packaging or tags have been removed
- 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 goodwill.
Returning faulty goods
The business may ask the customer to send goods back to them if there's 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 choice
- not inflate costs so that the customer decides not to return something.
Chargeback - debit and credit cards
A chargeback is like a refund. Chargeback is the term used by operators of credit and debit card schemes (such as EFTPOS, Mastercard, Visa and American Express) to reverse a transaction charge on a debit or credit card in certain circumstances.
The chargeback process takes place between the cardholder's and trader's banks.
When you may receive a chargeback
Your card provider may authorise a chargeback to your card account if:
- the products or services received don't match the description
- you don't receive the products or services at all, or within the agreed timeframe
- there are duplicate or fraudulent transactions
- charges are made without permission
- unrecognised transactions appear
- the trader stops operating and you didn't get what you paid for.
When you won't receive a chargeback
There are some circumstances where a chargeback may not be available. For example, if you:
- paid with cash, money transfer, cheque, direct debit or BPAY
- are eligible to lodge an insurance claim
- have already been compensated.
Request a chargeback
Contact the bank or card provider straight away to request a chargeback, as there are time limits on making a claim or dispute.
They can vary between 45 to 120 days from the transaction date, so check with your card provider. It doesn't matter if the business is no longer operating.
Keep records such as forms, emails, documents or webpages you have filled in, read or received as they may be needed to provide proof with your claim.
If you believe your bank or card provider has incorrectly rejected a chargeback request, you can dispute this decision through the Australian Financial Complaints Authority (AFCA).
Refund tips for customers
Keep receipts or proof of purchase safe
Proof of purchase can include:
- original receipt or photo of the receipt
- credit card slip or statement
- lay-by agreement
- warranty card showing information about the product, the date and purchase amount
- reference number - phone or online payments
- copy of a paid cheque or acknowledgement by store staff that they sold the item to you.
Take care of the goods
It's your responsibility to take care of products you intend to return - for example, it wouldn't be appropriate to leave a leather lounge suite outside until you return it. However, you don't have to return products in the original packaging in order to get a refund.
Getting help from Consumer and Business Services
There are some simple steps that customers can take before contacting Consumer and Business Services for advice and help with negotiating with the business. Solving a problem with a business has advice and a checklist to guide people through resolving problems with a business.