When customers want a refund
Your customers can return goods for a refund (or for a repair, replacement or a credit note) if the item:
- has a fault that wouldn't normally have been detected at the time they bought it;
- is not the same as described by the salesperson, or on a label or sign, or in an advertisement, or does not match the sample they were shown;
- is not suitable for the customer's intended use as they described to the salesperson before they bought it.
What sort of remedy?
Do you offer a repair or a replacement item; or do you refund their money or offer them a credit note?
The rule of thumb here is: what is "fair and reasonable"?
Consumer Protection believes that, if it is possible to have the item repaired to your customer's satisfaction, then you should be given the opportunity to do that, providing the time to do it is not excessive.
If it can't be repaired, or the customer does not want to wait for a repair, then you should offer a replacement or refund. In such instances, you can offer a credit note, but the choice of a replacement, a refund or a credit note is the customer's - not yours.
The goods do not have to be returned with the original packaging, but your customer must be able to show proof of purchase, such as a receipt. Price tags, credit card statements and cheque butts are not necessarily considered proof of purchase.
Your customers have no legal right to a remedy if they have simply changed their mind, or the item is an unwanted gift, or the wrong size etc. However, under such circumstances, if the salesperson agreed at the point of sale to give a refund if the item proved not suitable, this may become a ‘condition of sale' and they may insist on a refund.
Some stores have a very flexible and customer-friendly policy of exchanging goods. They do this for good will, not because the law requires them to.
"No Refunds" signs
Under the Trade Practices Act and Fair Trading Act, certain store signs relating to refund practices are illegal.
Here are some examples of illegal signs:
- "No refunds"
- "No refunds on sale items"
- "No exchanges"