The Australian Competition and Consumer Commission (‘ACCC’) recently reviewed over 2,000 retail websites across Australia. This examination focused on business return policies and website terms and conditions to ensure compliance with the Australian Consumer Law (‘ACL’).

The ACCC discovered multiple instances where businesses might be misleading consumers about their rights to refunds, exchanges, and returns. All businesses selling goods and services online or through social media should be aware of the findings.

 

Key Findings

The review revealed several practices that could mislead or deceive consumers regarding their legal rights under the ACL. These include:

• Unlawful Time Limits: Some websites had time limits for returning faulty products, which contradicts consumer guarantees that allow returns regardless of specified timeframes.
• No Refund Policies: Blanket statements of “no refunds” on sales or specialised items were found, despite ACL protections ensuring consumer rights even for discounted or custom-made products.
• Misleading Warranty Information: Some websites incorrectly indicated that manufacturer warranties were the only recourse for faulty products. This ignores the ACL’s consumer guarantees that apply regardless of manufacturer warranties.
• Restrictions on Remedies: Statements suggesting that delivery fees for faulty items were non-refundable, or that restocking fees would be charged for returns of faulty products, were found to be misleading and inconsistent with ACL requirements.

 

Examples of Problematic Statements

The ACCC highlighted specific statements from various websites that could mislead consumers, including:

• Items that have been opened and used cannot be exchanged or refunded.
• Made to order products cannot be returned.
• Sale items cannot be returned, exchanged, or refunded.
• In the unlikely event that your item arrives damaged or faulty, please notify the store within 30 days of delivery to receive a replacement.

 

ACCC’s Warnings

Following these findings, the ACCC issued warning letters to businesses with misleading terms and conditions, urging them to revise their policies to comply with the ACL. Many businesses have since updated or removed concerning statements and improved their consumer guarantee information.

The ACCC will continue to monitor compliance and, where necessary, will take enforcement action against businesses that continue to mislead consumers.

 

Consumer Rights Under the ACL

Under the ACL, consumers are entitled to certain statutory guarantees when purchasing products or services. Businesses must not make misleading statements such as:

• No refunds under any circumstances.
• No refunds on sale or specialised items.
• Delivery fees are non-refundable.
• Restocking or processing fees apply to returns for faulty items.

 

Ongoing Compliance and Law Reform:

The ACCC is going to do further website sweeps and monitor retail practices. It also supports proposed legal reforms, including:

• Penalties for Non-Compliance: Introducing penalties for businesses that fail to provide remedies for faulty products or for manufacturers that refuse to reimburse suppliers for defective items.
• Enhanced Consumer Protection: The proposed changes aim to strengthen consumer rights and ensure businesses fulfill their obligations under the ACL.

 

What Should Retail Businesses Do?

The ACCC’s review serves as an important reminder for businesses to ensure their policies are clear, accurate, and in line with consumer law. Failing to comply with the ACL not only risks legal action but also damages customer trust. Retail businesses should act now to ensure they are fully compliant and avoid any penalties or reputational damage in the future.

Retailers should review their online and in-store terms and conditions, returns/refund/exchange policies, and signage to ensure they comply with ACL regulations. Bell Legal Group can assist with this process. Our team has extensive experience in consumer law and can help ensure your policies are clear and compliant.

Contact us to review your current policies and make sure you are meeting the legal requirements under the ACL.

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