Refund and Returns Policy Template Australia: What Your Business Must Include

Every Australian business must give a repair, replacement or refund when something it sells fails a consumer guarantee under the Australian Consumer Law, whatever its own policy says. That is why a plain “no refunds” sign or policy is not allowed. What you do get to decide is whether you take returns when a customer simply changes their mind, and on what terms. A refund and returns policy sets out those choices on top of the rights you cannot remove.

Claim Done drafts a Refund and Returns Policy from your answers for a flat A$49. You download it straight away and publish it on your own website.

What the law requires, whatever your policy says

All businesses selling goods and services in Australia must comply with the Australian Consumer Law, including businesses based overseas. According to business.gov.au, the goods you sell must be of acceptable quality, match the description you give, meet any promises you make about them, and be fit for the purpose stated. Services must be carried out with due care and skill, be fit for the purpose stated, and be supplied in a reasonable time if no timeframe was agreed.

When a guarantee is not met, the remedy depends on whether the problem is major or minor. The ACCC puts it this way:

• Major problem with a product (for example it is unsafe, or very different from the description): the customer chooses a refund or a replacement. A refund is the full amount paid, with nothing taken off for use, and it goes back in the same form as the original payment unless you both agree otherwise.
• Major problem with a service: the customer can cancel and get a refund, less a reasonable amount for work already done properly, or keep the contract and pay a lower price.
• Minor problem: you must fix it or repair the product for free. You do not have to refund or replace, though you can. If you cannot or will not fix it within a reasonable time, the customer can have it fixed elsewhere at your cost, or get a refund or replacement.

You may assess the product or service before giving a remedy, but you must not send the customer to the manufacturer. A customer is not entitled to a remedy under the guarantees if they simply changed their mind, misused the product, or were told about the problem before they bought it.

Why “no refunds” signs are not allowed

The ACCC says it is illegal for a business to rely on store policies or terms and conditions that deny these rights, giving “no refunds” and “no refunds or exchanges on sale items” as examples. Its page on consumer rights and guarantees adds that a business cannot take the rights away by saying refunds are not available at all, or not available after a certain number of days.

Consumer Affairs Victoria notes that this rule also applies to an online store’s refunds and returns policy, and that businesses must not tell a consumer a guarantee does not exist or may be excluded. Customers cannot agree to give up these rights either.

What is acceptable is a sign or policy line that is clearly about change of mind only. Consumer Affairs Victoria gives “No refunds will be given if you have simply changed your mind” as an acceptable example. Displaying a refund sign is not compulsory.

Change-of-mind returns are your choice

Generally, a business does not have to give a refund or replacement if a customer simply changes their mind. You can offer change-of-mind returns as an extra, and you can set the window and conditions. Once you do, the policy should be clearly displayed at the point of sale or on your website so customers can read it before buying, and you must follow it.

State regulators give slightly different examples, so be precise:

The common thread: any limit must say it applies to change of mind only. In New South Wales, South Australia, Tasmania, the ACT and the Northern Territory, check the wording guidance of NSW Fair Trading, Consumer and Business Services SA, Consumer, Building and Occupational Services Tasmania, Access Canberra or NT Consumer Affairs.

What your refund policy should state

1. Customers’ rights first. Say that your goods or services come with consumer guarantees which cannot be excluded, and nothing in the policy limits them.
2. Whether you offer change-of-mind returns. If yes, the number of days and the condition the item must be in. If no, say so once and make clear it does not affect faulty items.
3. Sale items and exclusions. Anything you will not take back for change of mind, worded so it applies to change of mind only.
4. Proof of purchase. The ACCC says you can ask for a receipt or other proof, and its receipts page lists others, such as a card statement or an order reference number. The customer only needs to reasonably show they bought the item. A faulty item does not have to come back in its original packaging.
5. How to return. The email or page to use and what to include.
6. Who pays postage. For change-of-mind returns, that is your call. For faulty goods, the ACCC says customers return items that can be posted or easily returned, you pay to ship or collect large, heavy or hard-to-remove items, and you must repay reasonable return costs once you confirm a fault.
7. How refunds are paid. Original payment method, store credit or exchange. Keep store credit for change-of-mind returns, because a refund for a fault goes back in the original form unless the customer agrees otherwise.

The structure of a refund and returns policy

The policy Claim Done drafts is written in your business’s voice to your customers, and uses these headed sections:

1. Your rights under the Australian Consumer Law: the guarantees, stated first.
2. Change-of-mind returns: your yes or no, window and conditions.
3. Faulty, damaged or not as described: how to raise a problem, and that you cover return costs for a faulty or wrong item.
4. How to make a return or claim: who to contact and what to include.
5. Return postage: who pays for a change-of-mind return (left out if you sell no physical goods).
6. How refunds are issued: your chosen method.
7. Products we cannot accept for change of mind: your list, if any, noting the guarantees still apply if faulty.
8. Contact, then the State or Territory whose law governs the policy.

It does not invent a window, fee or exclusion you did not give, and nothing is sent to anyone or signed.

Selling online

When you sell online, the ACCC says you must follow all the usual consumer laws, including the guarantees. On a marketplace, the customer’s guarantee rights are against you as the seller, not the platform. business.gov.au suggests making your terms clear, accurate and easy to find, and telling customers about the consumer guarantees. It also notes that on an online marketplace you cannot set your own policies.

Mistakes to avoid

• A bare “no refunds”, “exchange or credit only” or “no refunds after 7 days” line with no change-of-mind qualifier.
• Sending a customer with a faulty item to the manufacturer.
• Refusing a faulty item because the packaging is gone.
• Offering change-of-mind returns and then not honouring them.
• Staff who do not know the policy. Queensland’s regulator suggests making sure all staff fully understand it.

If a customer thinks you are not meeting the guarantees, state and territory consumer protection agencies handle individual complaints, the ACCC deals with widespread issues, and courts and tribunals can enforce the law.

Answer a few plain questions and download your Refund and Returns Policy for a flat A$49, ready to publish today.