What is the only condition under Australian Consumer Law where a customer is entitled to for a replacement or refund for a product they have received?

Refund obligations can be placed into two categories – major and minor failures.

You don't have to give a refund when a consumer simply changes their mind about a product, for example if they no longer like it, or they've found it cheaper elsewhere.

Signs that state 'no refunds' or 'no refund on sale items', and 'exchange or credit notes only' are unlawful because they imply it's not possible for consumers to get a refund under any circumstance – even when there's a major problem with a product.

Some main points to remember include:

• If the customer changes their mind, it's up to you whether you provide a refund or not.
• You can never put up a 'no refund' sign
• If it's a major failure, you have to give a refund, replacement or compensation.
• If it's a minor failure, you have to repair, replace or refund.
• You must provide a lay-by statement if you offer it.
• If you charge for credit, you must register with the Business Licensing Authority.

What's considered a major failure?

Under the Australian Consumer Law, when a product or service fails to meet a consumer guarantee, your obligation to provide a type of remedy will depend on whether the failure is major or minor.

A major failure with a product or service is when:

• a reasonable consumer would not have bought the product or acquired the service if they had known about the problem
• the product is significantly different from the description, sample or demonstration model shown to the consumer
• the product or service supplied is substantially unfit for its normal purpose and cannot be made fit within a reasonable time
• the product is unsafe or the service supplied has created an unsafe situation

When there is a major failure with a product or service, the consumer can choose to:

• give it back or cancel it, and get either a refund or identical replacement
• keep it, and ask for compensation for the fault

In either circumstance, the consumer can seek compensation for any other reasonably foreseeable loss or damage. To find out what remedies can be provided, read the Australian Consumer Law consumer guarantees guide.

What's considered a minor failure?

A minor failure occurs when a problem with a product can be fixed easily, in a reasonable time and doesn't have the characteristics of a major failure.

You can provide a repair, offer the consumer a refund or an identical replacement (or one of similar value if it is reasonably available).

If you've identified a minor fault, but have not been able to fix it within a reasonable time, the consumer can choose to get the job done elsewhere, and charge you reasonable repair costs.

Alternatively, if the fault cannot be repaired within a reasonable time, or at all, the consumer can choose to reject the product and demand a refund, replacement, or the difference in value.

Find out more information about refunds.

Lay-by payments

Businesses must provide a lay-by statement which clearly sets out the terms and conditions of the lay-by transaction, under the Australian Consumer Law (ACL).

They include:

• a description of the goods purchased
• a date when payments are due
• any cancellation charges which may be payable
• conditions outlining when each party may cancel the lay-by transaction
• a date when the cancellation charge is payable
• restrictions on such a charge

Find out more information about lay-by purchases.

Providing credit

You may be providing credit, which is covered by the National Credit Code, if you provide money to purchase goods, services or land; or lease goods.

The Consumer Credit Code applies if:

• you provide the credit as part of any business
• you charge for the credit you provide
• your customers are individuals or residential strata corporations who use it mostly for personal, household or domestic purposes

Specific parts of the Code apply to different types of credit contracts and leases, but they are all covered by the Code's principles of disclosure and fairness in the marketplace. Some examples of transactions covered by the Code include:

• credit cards or hire of goods
• personal loans or overdrafts
• pay-day or housing loans
• related guarantees and mortgages
• continuing credit accounts

Under the Act, credit providers whose activities are regulated by the Code must register with the Consumer Affairs Victoria on their website.

Find out more information about the National Credit Code.

Print

The Australian Consumer Law (ACL), automatically gives you rights when you buy, hire or lease goods and services from businesses in Queensland. These are your consumer guarantees.

Businesses must provide these automatic guarantees, regardless of any other warranties they give or sell to you.

When you buy goods the seller guarantees:

• the goods
  • will be of acceptable quality
  • will be fit for a specific purpose
  • match their description
  • match any sample or demonstration model
  • have no undisclosed debts or hidden charges involved
• the seller will
  • honour any express warranties
  • give you title or clear ownership of the goods
  • give you undisturbed possession of the goods.

The manufacturer guarantees that:

• goods will
  • be of acceptable quality
  • match their description
• the manufacturer will
  • honour any express warranties
  • provide repairs or spare parts for a reasonable time after purchase.

The consumer guarantees only apply to goods purchased on or after 1 January 2011. Purchases made before this time may be covered by the laws that applied before this date.

Items covered

Consumer guarantees for goods apply to:

• anything purchased
  • from 1 July 2021 for $100,000 or less
  • before 1 July 2021 for $40,000 or less
• anything for personal or household use, regardless of price
• vehicles and trailers, regardless of price and provided they are used mainly to transport goods.

Consumer guarantees for goods do not apply to:

• goods you normally use for your business
• one-off sales such as by private sellers, garage sales or school fetes (though guarantees about clear title still apply)
• auctions where the auctioneer is the owner’s agent
• goods purchased for on-selling or re-supply
• goods that your business plans to use up or transform during a production, manufacturing or repair process.

Remedies

You can seek a remedy if a business sells you goods that don’t meet these guarantees. The business will have to attempt to correct any fault, deficiency or failure.

The remedy might be a refund, repair, replacement or compensation for damage and loss. The remedy you are entitled to will depend on whether the failure to comply with the guarantee is major or minor.

Express warranties, warranties against defects, and extended warranties can be offered to you in addition to your automatic legal rights under the Australian Consumer Law.

Find out more about seeking a remedy.

Acceptable quality

A business guarantees that goods will be of acceptable quality. This means they must:

• be fit for all of their usual purposes
• look acceptable in appearance and finish
• have no defects
• be safe
• be durable.

This acceptable quality test considers:

• the nature of the goods
• the price paid for the goods
• any claims the manufacturers make on the packaging or labels
• anything the business or its salespeople claim about the goods, including in advertising.

Examples

A consumer buys a toaster. He takes it home and unpacks it. The toaster looks fine, with no obvious scratches or marks of damage. He uses it a few times without any problems.  A week later when he tries to toast some bread with it, the timer mechanism falls off and the toaster throws sparks around the kitchen. The consumer takes it back to the store. He is entitled to a refund because it had a defect—it wasn’t safe and it wasn’t durable.

A homeowner goes to an appliance store to buy a new fridge. The attendant suggests a particular model, saying it is a major brand and will last for years. The customer decides to buy it. When it arrives, she sees a label on the box about an easy-to-use defrost function. A year later, she activates the defrost function to clean the freezer. The fridge makes a long wheezing noise and then a loud bang. She phones the store. The fridge did not meet the claim on the box about its function or the sales attendant’s claim about how long it would last. The homeowner is entitled to a remedy.

Exceptions

This guarantee does not apply if:

• you purchase the goods privately or at auction
• the business or salesperson points out any hidden defects before the sale
• the defect should have been obvious when you first saw the goods (unless you didn’t see them at all before you bought them)
• you use the goods in an abnormal way.

Fit for a specific purpose

A business guarantees that the goods you buy will be reasonably fit for their intended purpose. This covers their usual purpose plus anything else that the business or its salespeople claim that the goods can do.

You might also want goods to do a specific job for you. You are guaranteed that the product you buy will be suitable, if you:

• clearly told the business or salesperson how you want to use the goods
• relied on the business’s or salesperson's knowledge or expertise when deciding if the goods would suit your needs.

Example

A diver buys a watch that the business says will be suitable for diving. A couple of weeks later, the diver goes for her first dive wearing the new watch. When she surfaces, she sees that the dial has filled with water. The watch is not fit for purpose, so she is entitled to a remedy.

Exceptions

This guarantee does not apply when:

• you purchase the goods privately or at auction
• the business can show that you did not rely on their skill or judgment when buying the goods
• you should have reasonably known not to rely on the business's or salesperson’s skill or judgement in the circumstances.

Accurate description

A business guarantees that their description of goods is accurate. The business cannot argue that you inspected the goods before buying them and should have noticed any errors in the description.

This guarantee does not apply to private and auction sales.

Example

A consumer saw an online advertisement for a t-shirt. He liked the design and placed an order for a specific colour, but the t-shirt he received was a different colour. He is entitled to a remedy because the shirt does not match the description provided.

Samples or demonstration models

A business guarantees that the goods you buy will match any sample or demonstration model you were shown.

This guarantee does not apply to private and auction sales.

Example

A consumer goes into a retail store and is shown a vacuum cleaner on display that is being used as a demonstration model. The person working in the store demonstrates its features, including the attachments they say come with the vacuum cleaner. The consumer particularly likes the attachment they demonstrated that is designed to get pet hair out of the carpet. She places an order. When the vacuum cleaner is delivered, it is missing this attachment. She is entitled to a remedy.

Express warranties

There is a guarantee that if a seller or manufacturer makes extra promises about the quality, condition, performance or characteristics of goods—whether verbally or in writing—these promises must be met.

Known as express warranties, they commonly include money-back guarantees, extended warranties, warrantees against defects and lifetime guarantees.

Express warranties apply in addition to the consumer guarantees.

Example

A consumer purchases a kitchen knife.  The seller promises them that it will stay sharp for 10 years.  After 5 years, the knife is no longer sharp.  The consumer can claim that the knife does not meet the express warranty.

Spare parts and repairs

Manufacturers or importers guarantee they will take reasonable steps to provide spare parts and repair facilities. They guarantee they will do so for a reasonable time after you buy the goods.

How much time is 'reasonable' will depend on the type of goods. For instance:

• tyres for a new car should reasonably be available for many years after its purchase
• spare parts for an inexpensive children's toy are not reasonably likely to be available at all.

This guarantee does not apply to private and auction sales.

Example

A consumer bought a new digital camera a year ago for $2,000. He drops it and it breaks. He contacts the importer and asks how to get it repaired. The importer tells him they no longer supply parts for his camera. The manufacturer has not taken reasonable steps to provide spare parts for such a new camera. The importer must therefore provide a remedy.

Exceptions

This guarantee does not apply if:

• you purchase the goods privately or at auction
• the manufacturer or importer told you that repair facilities and spare parts would not be available after a certain time. They must do this in writing before you finalise the sale.

A business guarantees they have clear title—that is, the right to sell the goods to you.

If a third party has placed a mortgage or security on the goods, this would mean the seller has limited title. This is usually because the seller owes money to the third party.

This guarantee also applies to private and auction sales.

Example

A consumer buys a car from a car dealer, but the dealer had previously mortgaged the car with their bank. The dealer stops making repayments. To claim on its debt, the bank repossesses the car from the consumer. The consumer is entitled to a remedy from the dealer.

Exception

This guarantee does not apply if the business tells you they only have limited title before they sell you the goods.

Available to use (undisturbed possession)

A business guarantees that no one will:

• take back the goods
• prevent you from using them
• limit how you use them (except for illegal uses).

This guarantee also applies to private and auction sales.

Exceptions

This guarantee does not apply if you:

• do not meet your obligations under the sale, hire or lease contract
• were aware the business only had limited title when you bought the goods
• were aware when you bought the goods that another person had a security interest over them
• hired or leased the goods and the hire or lease has ended.

No debts or hidden charges (free from hidden securities)

A business guarantees that any goods you buy do not have hidden securities or charges, and this will not change. This means that a business cannot sell you goods with limited title (i.e. not full ownership) without telling you first.

This guarantee also applies to private and auction sales.

Example

A customer buys a television set from an electronics shop. The shop had already used the television as security for a current loan. The lender calls in the debt and is entitled to take ownership of the television. The business must provide a remedy to the customer, such as replacing the television.

Exceptions

This guarantee does not apply if:

• the security was placed on the goods with your permission
• an existing security was brought to your attention in writing before you bought the goods.

Last updated: 1 July 2021