Refused a refund? Know your rights while shopping

Consumer guarantees exist only on paper in many cases, so what happens if you buy a lemon? 

When your washing machine packs it in or your toaster dies two months after purchase, Australian Consumer Law (ACL) is clear: you are entitled to a remedy.

Why is it then that thousands of Australians walk away empty-handed?

How hard is it to lodge a consumer complaint?

In 2023, the Australian Competition & Consumer  Commission (ACCC) logged more than 28,000 complaints about returns and refunds - nearly a third of reports received. Cars, electronics and whitegoods dominated the list.

About a third of these consumers didn't have their problem fixed. And of the 69% who did, a third were not satisfied with the outcome.

An ACCC sweep of 2000 retail websites in early 2025 revealed the kinds of terms shoppers face:
• Sale items cannot be returned.
• Opened products cannot be exchanged.
• Notify us within 30 days for a replacement.

These statements are flagrant violations of the ACL's consumer guarantees - basic rights that apply to every product or service sold in Australia.

But that's cold comfort when you're standing in-store arguing with a junior employee reading off a laminated sign.

"Sorry, that's our policy... buyer beware, dude." Kick up a stink and you'll likely be bounced between managers, on-hold queues and email addresses that never reply.

As Chandni Gupta from the Consumer Policy Research Centre (CPRC) points out, protections that exist only on paper are "deeply unfair", leaving Australians to fight through a maze of bureaucracy.

A joint CPRC and the Consumer Action Law Centre report found lodging a complaint about a faulty car can involve up to 60 steps - and that's if everything goes smoothly.

Gupta says the reality is that "Australians are unlikely to pursue their rights under consumer guarantees as the administrative burden sits solely on them".

Why wasn't the law working for consumers?

The ACL came into force in 2011, billed as a major step forward in protecting buyers. For the following decade, government and industry finetuned the framework, but the gap between guarantees on paper and guaranteed outcomes in practice only widened.

As Assistant Minister for Treasury Andrew Leigh recently wrote in The Canberra Times, "rights without consequences are just suggestions".

The 2016 Consumer Survey laid bare the problem: most people tried to resolve issues themselves, but only 36% succeeded on first contact.

On average, consumers spent 22.6 hours a year - worth about $655 of their time - chasing problems, plus another $299 in out-of-pocket costs such as legal advice or technical reports. In some cases, tribunals demanded expert evidence before even hearing a case.

For low-value goods - a $40 toaster, a $60 pair of headphones - it was usually cheaper to give up than to fight.

By 2021, Treasury conceded the system only works if consumers know and assert their rights and businesses are compelled to meet their obligations. Australians agreed. A 2022 CHOICE survey of nearly 10,000 people found 99.6% believed businesses should be penalised when they fail to provide a refund, repair or replacement under the ACL. But reform takes time.

Two years later, Treasury released a consultation paper on penalties for businesses that flout their  obligations. By December, consumer affairs ministers had agreed to make prohibitions and penalties a 2025 policy priority.

What's changing in consumer protection laws?

The ACCC has long pushed for stronger enforcement of consumer guarantees. At present, the watchdog can issue warning letters and, in some cases, negotiate tailored penalties with individual businesses.

While the ACCC says its methods do improve compliance, it's a patch-up job. Without penalties written into law, the regulator is forced to craft bespoke fixes rather than wield a blunt instrument that applies across the board. That's why consumer groups argue that the law 'has no teeth'.

"This allows businesses to give people the runaround, exploit consumer anxiety and sell poor-value extended warranties that give the consumer access to remedies they may already have a right to under the law," says Andy Kelly from CHOICE.

The CPRC's Gupta calls it a blind spot. "Reforming consumer guarantees so that a regulator can enforce directly will help address a major gap in the ACL."

Government agrees. Assistant Minister Andrew Leigh says Australians expect products and services to work as promised, and when they don't, the supplier should fix the problem.

"That's why we are taking action to strengthen consumer guarantee protections for consumers and small businesses and introducing civil penalties for breaches - so that rights come with real consequences."

On this point, there's rare consensus: shoppers, regulators, consumer advocates, legal experts, ministers and Treasury all want penalties. The sticking point, yet again, is timing. Treasury is still working through the 2024 consultation.

Next comes a decision regulation impact statement, weighing the evidence and recommending a preferred policy option.

Proposed amendments must then win the support of State and Territory consumer affairs ministers, before draft legislation is developed and released for public consultation. Only after that can a Bill make its way to parliament. In other words, everybody wants reform; but it's not likely to happen anytime soon.

What are your rights under Australian Consumer Law?

If a product or service doesn't meet one of the consumer guarantees, you're entitled to a remedy.

That might mean a repair, replacement, refund, cancellation or compensation for damages or loss. Your first step is always to contact the business that sold you the product or service.

ACL says the business can't simply tell you to chase the manufacturer, except where the issue is that spare parts or repair facilities are no longer available within a reasonable time.

If the business refuses to help, there are other options. Each State and Territory has a consumer affairs agency, such as NSW Fair Trading, Consumer Affairs Victoria, Access Canberra or WA Consumer Protection - that can step in. Industry ombudsmen, including the Telecommunications Industry Ombudsman and the Australian Financial Complaints Authority, also offer free dispute resolution. If that fails, legal avenues are available.

Each State has small claims courts or tribunals that hear consumer and fair-trading disputes, and you can seek advice through community legal centres or State-based legal services before proceeding.

CHOICE recommends keeping a written record of all complaints, while the CPRC urges consumers to report retailers to regulators.

"Every report adds weight and evidence, making it harder for the government to ignore the case for change," says Gupta.

That evidence has shaped and is shaping the policy debate. Without it, Australia may not have had consumer guarantees to begin with.

As Minister Leigh told The Canberra Times, since 2011, protections have expanded: unfair contract terms are now banned, consumer guarantees are better enforced and regulators have more tools to hold businesses to account.

"But markets don't stand still, and nor can our laws," said Minister Leigh.

Progress may be slow but by consumers knowing their rights, asserting them and adding their voice, it will move in the right direction - eventually.

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