Supplier Won’t Refund Faulty Goods: Letter of Demand Guide

You ordered goods from a supplier. They arrived defective, damaged, or not fit for purpose. You’ve asked for a refund or replacement. The supplier has ignored you, offered a credit note you don’t want, or blamed the manufacturer.

Under the Australian Consumer Law, you have automatic guarantees when you buy goods from a business. If those guarantees are breached, the supplier must provide a remedy. When they refuse, a letter of demand is the fastest, most cost-effective way to enforce your rights before escalating to a tribunal.

What the Australian Consumer Law Says About Faulty Goods

The Australian Consumer Law (ACL) applies to every business selling goods or services in Australia, regardless of state or territory.

When you buy goods from a supplier, you automatically receive these consumer guarantees:

• Acceptable quality — goods must be safe, durable, free from defects, and acceptable in appearance and finish
• Fit for purpose — if you told the supplier what you needed the goods for, they must be fit for that purpose
• Match description — goods must match any description, sample, or demonstration model
• Title — the supplier must have the right to sell the goods
• Undisturbed possession — no one can take the goods from you or claim ownership

These guarantees cannot be excluded by the supplier’s terms and conditions. They apply even if the supplier says “no refunds” or “warranty claims go to the manufacturer.”

When You’re Entitled to a Refund vs Repair

The remedy you’re entitled to depends on whether the failure is major or minor.

Major failure

A major failure occurs when:

• The goods have a problem that would have stopped a reasonable consumer from buying them if they’d known about it
• The goods are substantially unfit for their normal purpose and cannot easily be fixed within a reasonable time
• The goods are unsafe

Your choice: refund, replacement, or repair.

Minor failure

A minor failure is any other breach of the guarantees — a defect that can be fixed reasonably quickly.

Supplier’s choice: the supplier can choose to repair, replace, or refund.

Most disputes arise because the supplier claims the failure is minor (and offers only repair), while you believe it’s major (and want a refund). A letter of demand forces the supplier to take your position seriously or face tribunal proceedings.

Why Suppliers Refuse Refunds

“It’s a manufacturer’s warranty issue, not ours.” Wrong. Under the ACL, the supplier is responsible for consumer guarantees, not the manufacturer. You can pursue either, but the supplier cannot deflect responsibility.

“We only offer store credit or exchange.” Wrong. If you’re entitled to a refund under the ACL, the supplier cannot force you to accept credit or an exchange.

“You damaged it yourself.” The supplier can refuse a remedy if they can prove you caused the fault through misuse, abnormal use, or failure to follow instructions. The burden of proof is on them.

“It’s past our 30-day return policy.” Wrong. Consumer guarantees apply for a reasonable period based on the type and price of goods. For a $2,000 appliance, a reasonable period might be years, not days.

“You didn’t buy directly from us.” If you bought through a distributor or reseller, the ACL guarantees still apply to the business you paid.

What a Letter of Demand Does

A letter of demand is a formal written notice that:

• Sets out the facts — what you bought, when, how much you paid, and what went wrong
• Cites the specific ACL guarantees that have been breached
• States the remedy you’re entitled to
• Gives the supplier a deadline to comply (typically 7-14 days)
• Warns that you will escalate to the relevant tribunal if they do not comply

Most suppliers respond to a properly drafted letter of demand because it shows you know your rights and are prepared to escalate. Tribunal proceedings cost them more time and money than simply refunding you. If the matter goes to tribunal and you win, they may be ordered to pay your costs.

When to Send a Letter of Demand

Send a letter of demand when:

• You’ve already asked the supplier for a refund or remedy and been refused or ignored
• The goods are clearly faulty, defective, or not as described
• You have evidence — receipts, photos, correspondence, delivery notes
• The amount is worth pursuing (typically $500+, though smaller amounts are valid)
• You’re willing to escalate to tribunal if the supplier still refuses

Do not send a letter of demand if:

• You haven’t yet contacted the supplier — always try to resolve it informally first
• The fault is genuinely your fault (misuse, damage, normal wear and tear)
• The dispute is complex and requires expert evidence

What to Include in Your Letter of Demand

A properly drafted letter of demand for faulty goods should include:

• Your details — name, address, contact details
• Supplier’s details — business name, ABN, address
• Transaction details — date of purchase, invoice number, amount paid
• Description of goods — make, model, quantity
• Description of fault — what is wrong, when you discovered it, how it fails the ACL guarantees
• Evidence — reference to attached photos, receipts, correspondence
• Remedy sought — refund of $X, or replacement, or repair (be specific)
• Deadline — “within 7 days of the date of this letter”
• Consequences — “If you do not comply, I will file an application with [state tribunal] without further notice”

The tone should be direct, factual, and commercially confident. State the facts, cite the law, and give a clear path to resolution.

What Happens After You Send It

Most suppliers respond within 7-14 days. Possible outcomes:

Full compliance — they refund or replace the goods. Dispute resolved.

Partial offer — they offer a repair or partial refund. You can accept or reject and escalate.

Counteroffer — they claim the fault is minor and offer a different remedy. You can negotiate or escalate.

No response — after 14 days, you can file a tribunal application. The letter of demand becomes evidence that you attempted to resolve the matter before escalating.

Denial — they deny liability and refuse to pay. You can file a tribunal application. The tribunal will decide based on the evidence.

If you escalate to tribunal, the letter of demand strengthens your case by showing you acted reasonably and gave the supplier a fair opportunity to comply.

How ClaimDone Prepares Your Letter of Demand

ClaimDone’s Proprietary AI Engine reads your evidence and drafts a letter of demand citing the applicable ACL guarantees. You complete a 5-minute intake form, upload your receipts and photos, and the system generates a professionally formatted letter — which is then delivered to the supplier automatically.

What you get:

• Letter citing the relevant ACL consumer guarantees
• Clear statement of the remedy you’re entitled to
• 7-day compliance deadline
• Warning of tribunal escalation
• Automatic delivery via email and registered post

Flat fee: $79 — no subscription, no hourly billing, done in 60 minutes.

If the supplier still refuses after receiving your letter of demand, you can prepare your tribunal application using ClaimDone’s tribunal service, which prepares all the forms and supporting documents based on the same evidence.

When to Skip the Letter and Go Straight to Tribunal

In some cases, a letter of demand may be unnecessary:

• The supplier has already said in writing they will not refund under any circumstances
• The dispute involves a major retailer with a formal complaints process you’ve already exhausted
• The amount is small (under $500) and you’d rather file a tribunal claim immediately
• You need an urgent remedy for business purposes

Even in these cases, a letter of demand can still be useful as evidence that you attempted resolution before filing. Tribunals typically look favourably on applicants who tried to settle first.

What If the Supplier Is Overseas?

If you bought goods from an overseas supplier (including online marketplaces), the ACL may still apply if:

• The supplier carries on business in Australia (has an Australian presence, advertises here, or targets Australian consumers)
• The goods were delivered to Australia

If the supplier has no Australian presence and is based entirely overseas, enforcing your rights is difficult. You may need to:

• Dispute the transaction with your credit card provider or PayPal
• Report the supplier to the ACCC’s Scamwatch
• Accept the loss if the amount is small

A letter of demand is only effective if the supplier has assets or a reputation in Australia.

Get Your Letter of Demand Prepared and Sent

When a supplier won’t refund faulty goods, you have clear rights under the Australian Consumer Law. A letter of demand is the fastest, most cost-effective way to enforce those rights before escalating to tribunal. Most suppliers comply when faced with a properly drafted letter citing the ACL guarantees and warning of tribunal action.

ClaimDone prepares and delivers your letter of demand automatically for $79. Upload your evidence, answer a few questions, and the letter is drafted and sent within 60 minutes. If the supplier still refuses, you can escalate using ClaimDone’s tribunal application service. Get your letter of demand prepared and sent automatically.

Frequently Asked Questions

Can a supplier refuse a refund if I don't have a receipt?

No. Under the ACL, you must prove you bought the goods from that supplier, but a receipt is not the only way. Bank statements, emails, delivery notes, or witness testimony can be sufficient. The supplier cannot refuse a remedy solely because you lost the receipt.

How long do I have to claim a refund for faulty goods?

There is no fixed time limit. Consumer guarantees apply for a ‘reasonable period’ based on the type and price of goods. A $50 item might have a reasonable period of months, while a $5,000 appliance might have a reasonable period of several years. If the goods fail within that period, you’re entitled to a remedy.

What if the supplier offers a repair but I want a refund?

If the failure is major, you can choose the remedy — refund, replacement, or repair. If the failure is minor, the supplier can choose. Most disputes turn on whether the failure is major or minor. A letter of demand forces the supplier to justify their position or face tribunal proceedings.

Can I claim compensation for losses caused by the faulty goods?

In some cases, yes. The ACL allows you to claim compensation for reasonably foreseeable loss or damage caused by a breach of the consumer guarantees. For example, if a faulty appliance damaged your property, or you lost income because equipment failed. You must prove the loss with evidence.

What if the supplier goes out of business before I get my refund?

If the supplier is insolvent or has closed, you may be able to claim against the manufacturer under the ACL, or against your credit card provider if you paid by card. If the supplier is a company, you can check their status on the ASIC register. If they are in liquidation, you may need to lodge a proof of debt with the liquidator.