Understanding your Business Obligations and Responsibilities
If your business provides a product or service, it’s important to understand your obligations and responsibilities. Under the Australian Consumer Law, consumers have rights, called consumer guarantees, which apply to certain products and services. These guarantees are intended to ensure that consumers get the product they paid for and that it does what it is meant to do.
If a product or service fails to meet a guarantee, businesses may be required to provide a remedy such as a replacement, repair or refund. The type of remedy depends on whether the failure is major or minor.
Check any signs you display are accurate and clear
It is unlawful to mislead consumers about their rights, such as by displaying signs that claim:
- ‘No refunds’ at all, or after a certain number of days
- ‘Exchange or credit note only for the return of sale items’.
Consumer guarantees have no set time limit and still apply regardless of whether an item is on sale.
What to do if a customer changes their mind
If the customer has simply changed their mind, you don’t have to provide a refund. However, if you have a store policy that offers a refund, exchange or credit note if a customer changes their mind, you must follow that policy. In-store policies should be clearly displayed at the point of sale or included on your business’ website.
Proof of purchase
Sometimes customers may need to exchange or return purchases for various reasons. A business has the right to ask a customer for proof of purchase. If they are unable to provide such proof, you may refuse to offer a remedy.
Remember, there are different ways a customer can provide proof of purchase, not just a cash register or hand-written receipt. These may include:
- credit or debit card statement
- a receipt or reference number given for phone or internet payments
- a copy or photograph of the receipt.
Small businesses can be consumers too
Remember, when your business buys a product or service from another business, you may also have rights as a consumer.
A product or service bought for business use is covered by the consumer guarantees when it meets at least one of the following conditions:
- it costs less than $100,000 including GST
- it is a product or service commonly bought for personal, domestic or household use
- the good is a vehicle or trailer that is used mainly to transport goods on public roads.
However, there are some exceptions. Even when meeting one of these conditions, a product is not covered by consumer guarantees when it's purchased:
- for resupply
- for use or transformation in production or manufacturing, or
- to repair or treat other goods.
Visit the ACCC website for examples of when a small business is a consumer.
You can find
guidance about consumer guarantees on the ACCC website.
