5 Things Employees Need to Know About Return Policies

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Table of Contents

• General Consumer Rights for Refunds, Repairs and Replacements
• 1. When Can the Consumer NOT Return the Product?
• 2. Customer has a Broken Product and an Expired Warranty
• 3. “No Refund” policies are not allowed
• 4. Consumer Refunds After 14 or 30-day policy
• 5. Do I Have to Refund in Cash or Can I Give Store Credit?

All too often, company refund and repair policies do not line up with the Australian Consumer Law (ACL), leading to employee confusion about whether they should allow a refund or replacement of that product. Below, we provide five tips that employees in any industry should know. But remember, you should always check with your manager about your employer’s return policies first!

General Consumer Rights for Refunds, Repairs and Replacements

If a business sells a product worth under $40,000, or sells a product for personal or household use, then that business will automatically provide consumer guarantees, including: 

• The product is of an acceptable quality;
• The product is fit for the purpose specified when purchasing the product;
• The product is safe to use; and
• The product matches the description advertised or any representation made by a salesperson

If there is a minor defect, then the business can choose to provide either a repair, replacement or refund of the product. The business must pay for all costs incurred to get the product back to the premises.

If there is a significant problem, then the business must offer a replacement or refund of the product, either of which the consumer can choose to accept. For example, the product is:

• Unsafe,
• Doesn’t do what the description stated, or
• The problem cannot be easily fixed.

Retailers must accept responsibility for the product, and cannot redirect customers to the manufacturer or importer.

1. When Can the Consumer NOT Return the Product?

Under the ACL, consumers have no right to return a product if they:

• Change their mind;
• Found the product cheaper elsewhere;
• Were aware of the fault before buying it;
• Misused the product;
• Used the product for over a reasonable period; or
• Realised they bought the wrong product.

But, if your employer’s policy allows customers to do any of the above and remain entitled to an exchange or refund, then you must apply that policy!

2. Customer has a Broken Product and an Expired Warranty

Even when the warranty is expired, the customer’s consumer guarantees may still exist. The ACL does not provide that consumer guarantees will not apply after a specific date. However, they provide for a reasonable period depending on the nature of the good. For example, a grand piano may be protected by consumer guarantees much longer than a smartphone.

3. “No Refund” policies are not allowed

Businesses cannot rely on a “no refunds” policy. This is illegal, regardless of the circumstances. Even if the product is on sale, customers may claim a refund for their product.

4. Consumer Refunds After 14 or 30-day policy

Consumers are entitled to a refund for any product provided that the time taken to request the refund is ‘reasonable’. Time limits set by your employer for 14 or 30 days may not apply in some circumstances.

5. Do I Have to Refund in Cash or Can I Give Store Credit?

It is the consumer’s right to have their refund in the form of their original payment. It is illegal to force consumers to accept store credit instead of refunding them their original card, cheque or cash payment.

Questions? Get in touch with LegalVision’s consumer lawyers on 1300 544 755.