One month into 2017 already and I have hit the ground running! January for me has been spent helping new businesses be legally protected. Regardless of the type of business, there is a conversation that I find myself consistently having with new and established businesses.
The words “NO REFUNDS” are illegal! They have been since the Competition and Consumer Act 2011 commenced in 2012! Yet this term is still ripe and awareness about its illegality is low. Here is a quick rundown which I encourage you to share with small business owners.
Why can I not say ‘no refunds’?
The law says when refunds should be provided. It is not something that is in the business owners’ discretion. According to the law, there will be instances when a business must give a refund. For this reason, the words ‘no refunds’ in terms or on signs are illegal.
When do I have to give a refund?
When there has been a breach of a consumer guarantee. If there is a minor breach, the business has the choice of fixing the issue or providing a refund in full or in part, whatever is more suitable to fix the issue. If there is a major breach, the business must give a refund and may also have to pay compensation.
What is a consumer guarantee?
These are standards or requirements, or promises that by law a business must meet. There are different guarantees for service providers, retailers and manufacturers/importers.
But my terms are different, I don’t provide guarantees.
The consumer guarantees are embedded in law, and by having a business, you must automatically satisfy them. They cannot be changed or avoided by terms and conditions or contracts, and clauses that are not consistent with the guarantees can be deemed illegal.
I only deal with businesses so the consumer law doesn’t apply to me, does it?
Yes, it does. A business to business transaction valued under $40,000.00 falls under the consumer law, and the provider must comply with the consumer law guarantees.
Want more information?
The ACCC has a great guide for business which can be accessed on their website.