Australian Consumer Law Basics Every Small Business Should Know

The Australian Consumer Law applies to almost every business that sells goods or services to consumers in Australia, regardless of size. It sits within the Competition and Consumer Act and is enforced by the ACCC along with state and territory regulators. Understanding the basics helps you avoid disputes, penalties and reputational damage, and it also helps you explain your policies confidently to customers.

The consumer guarantees

When you sell to a consumer, automatic guarantees apply. Goods must be of acceptable quality, fit for purpose, match the description and be free from defects. Services must be delivered with due care and skill, be fit for purpose and be completed within a reasonable time. These guarantees apply regardless of anything you write in your terms and conditions.

They apply whether you sell something as simple as reusable mesh produce bags or something complex like a construction service. What changes is how you handle a problem, not whether the guarantee exists.

Refunds, returns and change of mind

A common misunderstanding is that customers can always get a refund, or that a no-refunds sign settles the matter. Neither is correct.

• If a product is faulty, not as described or unfit for purpose, the customer is entitled to a remedy — a repair, replacement or refund depending on the circumstances.
• If a customer simply changes their mind, they are not automatically entitled to a refund. You can choose to offer one, and if you do, it is sensible to publish the conditions clearly.
• You can ask for proof of purchase, but you cannot insist on a receipt — a bank statement or other evidence will often do.

Advertising and claims must be accurate

Misleading or deceptive conduct is prohibited. That covers advertising, websites, social media posts, packaging and anything a staff member says. Claims about performance, origin, sustainability or certification need to be true and able to be substantiated.

If you work with a marketing provider, agree in writing about who approves claims and testimonials. The guidance on choosing a digital marketing agency is a useful starting point. Responsibility for the final message rests with your business, not the agency.

Warranties, repairs and services

Manufacturer warranties are additional to consumer guarantees; they do not replace them. If you sell a service, be clear about scope, timelines and exclusions. For example, an inspection service such as a pre-auction building inspection should state exactly what is examined and what is not, so customers understand what they are paying for.

Handling complaints well

Deal with problems quickly and in writing where possible. Listen, ask what outcome the customer wants and explain what you can do within a reasonable timeframe. Most complaints escalate because people feel ignored rather than because the original problem was severe. Keep records of what was agreed and when.

Online sales and delivery

If you sell online, display prices clearly, including any mandatory charges, and state delivery timeframes realistically. Your returns policy should be easy to find. Consumer guarantees still apply to online purchases, including those from overseas sellers shipping to Australia, which is one reason customers increasingly expect local businesses to match that standard of service.

Frequently asked questions

Do I need a refund policy?

You are not required to offer refunds for change of mind, but if you do, the policy should be written clearly and applied consistently. Consumer guarantee rights always apply.

Can I say no refunds on my signage?

You can display a policy, but it cannot override consumer guarantees. Signage suggesting customers have no rights can itself be misleading.

Who enforces the Australian Consumer Law?

The ACCC enforces it nationally, and state and territory consumer affairs agencies handle many complaints and investigations.

Frequently asked questions

Do I need a refund policy?

You are not required to offer refunds for change of mind, but if you do, the policy should be written clearly and applied consistently. Consumer guarantee rights always apply.

Can I say no refunds on my signage?

You can display a policy, but it cannot override consumer guarantees. Signage suggesting customers have no rights can itself be misleading.

Who enforces the Australian Consumer Law?

The ACCC enforces it nationally, and state and territory consumer affairs agencies handle many complaints and investigations.