Consumer Guarantees: What Online Retailers Owe Buyers

Consumer guarantees give buyers automatic rights when goods fail, and online retailers must provide the remedy required by the Australian Consumer Law (ACL). A store warranty or returns deadline can’t remove those rights. Whether you owe a repair, replacement or refund depends on the fault and its seriousness.

For a kettle that stops working after five months, start by assessing the fault and the durability a buyer could reasonably expect. An expired warranty alone doesn’t answer the claim.

What Are Consumer Guarantees Under the ACL

Consumer guarantees are automatic legal promises about goods and services sold to consumers, including online purchases. They sit in the ACL, which is Schedule 2 of the Competition and Consumer Act 2010. Australia has no single law called the Consumer Rights Act.

The ACCC’s business guidance on consumer guarantees explains the rights you must respect. Goods must meet these guarantees where applicable:

• Acceptable quality, including reasonable durability, safety and freedom from defects.
• Fitness for a purpose the buyer disclosed and relied on you to meet.
• Matching the description, sample or demonstration model.
• Meeting extra promises about performance or quality.
• Clear title, undisturbed possession and freedom from undisclosed securities.
• Reasonable access to spare parts and repair facilities, subject to disclosed exceptions.

Services must be supplied with due care and skill, be fit for a disclosed purpose and arrive within a reasonable time when no time is agreed.

The consumer value threshold is $100,000 including GST. Purchases at or below that threshold qualify, as do goods or services ordinarily bought for personal, domestic or household use, regardless of price. A vehicle or trailer bought mainly to transport goods on public roads also qualifies. Goods acquired for resale or certain production uses are excluded. A business buyer can be a consumer too.

These rights apply in South Australia and every other state and territory. Local consumer protection offices handle complaints, including Consumer and Business Services in South Australia. The Australian Competition and Consumer Commission (ACCC) handles broader enforcement and doesn’t resolve individual disputes.

Major and Minor Failures

A major failure gives the buyer the choice of a refund or replacement when they can reject the goods under the ACL. A minor failure lets the retailer choose how to fix the problem within a reasonable time.

A failure is major if the goods are unsafe or substantially different from their description or sample. It also includes a serious fault, or several faults together, that would have stopped a reasonable buyer purchasing them. Goods unfit for their normal or disclosed purpose have a major failure when they can’t easily be fixed within a reasonable time.

Use this table while assessing a claim. The examples are hypothetical.

Failure	Retail example	Who chooses the remedy	What staff do
Major	A kettle creates an electrical safety hazard	Buyer chooses refund or replacement	Arrange the chosen remedy after assessment
Minor	A loose handle can be repaired promptly and safely	Retailer chooses free repair, replacement or refund	Give a reasonable repair timeframe and follow through
Minor fault left unresolved	The retailer refuses a repair or takes too long	Buyer gains further remedy rights	Assess rejection for refund or replacement, or reimburse reasonable outside repair costs

Rejection rights have limits, including the reasonable rejection period and certain damage after delivery. That period depends on the product and the fault, rather than a fixed store deadline. Buyers may also have rights to compensation for reasonably foreseeable loss.

Who Pays Freight on Faulty Goods

You must reimburse reasonable return costs once a fault is confirmed. Buyers generally arrange the return of small items they can post or bring back easily.

For a large, heavy or difficult-to-remove faulty item, you must arrange collection or pay the shipping costs within a reasonable time. Ask buyers to keep postage receipts. If assessment finds no fault, collection and inspection costs can fall to the buyer only after you give a reasonable estimate before collection.

Your store remains responsible for handling the claim. The ACCC’s remedy guidance says retailers can’t send buyers to manufacturers for a remedy. The narrow spare-parts and repair-facilities guarantee has a manufacturer route, but it doesn’t justify redirecting every faulty-item claim.

Proof of Purchase and Refunds Without a Receipt

Proof of purchase is evidence that the buyer bought the item from your store. You can request it, but a lost receipt alone doesn’t remove their rights.

The ACCC’s proof of purchase guidance accepts alternatives to an original receipt. These include card statements, online reference numbers and a serial number matched to a supplier database. It also accepts photos and photocopies of documents.

A photo of a receipt can therefore count. A bank or card statement can establish the transaction, although another document may be needed to identify the item. An order confirmation email, account order history or screenshot can help when it shows the purchase details and reference number.

Ask for the order number or purchasing email address and look up your own order history. Match the item and payment before deciding that evidence is missing. The test is whether the buyer reasonably demonstrates the purchase, not whether they kept one particular document.

Warranty Claims and Extended Warranties

A warranty against defects adds a promise about what the business will do if goods fail. It sits alongside the consumer guarantees, which can last beyond the warranty period.

For a goods-only warranty, regulation 90(2) of the Competition and Consumer Regulations 2010 requires this exact text:

Our goods come with guarantees that cannot be excluded under the Australian Consumer Law. You are entitled to a replacement or refund for a major failure and compensation for any other reasonably foreseeable loss or damage. You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure.

The warranty must explain what the business and buyer must do, its claim period and the claim procedure. Include the warranty provider’s name, business address, telephone number and email address if it has one. State who pays claim expenses and how the buyer can recover expenses the provider bears.

The document must say its benefits add to other legal rights and remedies. Supply the required information with the actual product. A link to a website alone isn’t enough. Services and mixed goods-and-services warranties have different mandatory text in the same regulation.

When selling an extended warranty, explain what extra protection the buyer gets. You can’t suggest that paying for it is necessary to retain rights they already have under the ACL. The ACCC’s warranty guidance sets out these obligations.

What a Chat Agent Must Tell Shoppers About Guarantees

Shoppers must get an explanation of their consumer guarantee rights alongside your store’s claim process. Keep fault assessment and remedy decisions with authorised staff.

These model replies give the shopper a next step without deciding the claim prematurely.

For a faulty item:

If the item has a major failure, you can choose a refund or replacement under the Australian Consumer Law. Please share the order details and describe the fault so our team can assess it. For a minor failure, we can arrange a free repair within a reasonable time or choose another remedy.

For an expired warranty:

Your consumer guarantee rights can continue after the warranty expires. Please tell us what has failed and when you bought the item. Our team will assess the fault under the Australian Consumer Law.

For a lost receipt:

You can use other proof of purchase, such as an order confirmation or card statement. If you share your order number or purchasing email address, our team can look up the order.

Staff must decide whether the failure is major and whether misuse or a disclosed defect affects the claim. They also decide the appropriate return arrangements. While staff assess it, the agent can acknowledge the claim, collect evidence and explain the next step. It must never say that all faults go to the manufacturer or that warranty expiry ends the shopper’s rights.

Second-Hand and Sale Goods

Consumer guarantees cover used and discounted goods sold by businesses. Expectations of acceptable quality account for the price, age and condition of the item.

A clearly disclosed scratch can affect a claim about that scratch. It doesn’t remove rights for an unrelated electrical fault. Describing something as “sale”, “seconds” or “as is” doesn’t disclose every defect.

Used cars follow these principles alongside state motor dealer rules, so direct vehicle complaints to the relevant state office, including NSW Fair Trading.

A shopper who simply changes their mind has a different question. Read the guide to change-of-mind returns for those optional store policies.

Unsolicited Goods and Services

A business can’t demand payment for goods or services the recipient never requested. Adding an extra item to an online parcel doesn’t create an obligation to buy it.

Under the ACCC’s unsolicited supply guidance, the collection period is one month after written notice to the supplier, or three months without notice. The recipient must allow reasonable collection and mustn’t deliberately damage the goods during that period.

After the collection period, the recipient can keep genuinely unsolicited goods without paying. This doesn’t apply to a parcel clearly intended for someone else. A subscription started without agreement also cannot justify charging for unrequested services. Keep evidence of consent before supplying recurring orders.

Store Wording That Breaks the Law

Store wording breaks the law when it misleads buyers about rights the ACL gives them. “No refunds on sale items” is misleading if it denies remedies for faulty goods.

“Warranty void if opened” mustn’t imply that opening a product cancels all consumer guarantee rights. A voluntary warranty condition and a legal claim are separate questions. Damage caused by misuse still needs assessment.

A lawful explanation can say, “Our change-of-mind policy doesn’t limit your rights under the Australian Consumer Law.” Use the returns policy template to draft the broader policy. Read the guide to store credit before offering credit instead of a required refund.

The ACCC can seek court penalties for false or misleading representations about consumer rights. Its penalties guidance lists a corporate maximum based on the greatest applicable amount. The alternatives are $100 million, three times the attributable benefit, or 30% of adjusted turnover when that benefit can’t be determined. The maximum for individuals is $2.5 million. The court determines the penalty, and the applicable law depends on when the conduct occurred.

Treasury’s consumer guarantee reform proposes civil penalties for failing to provide required remedies themselves. Treasury describes draft laws as the next step, so that proposed prohibition isn’t an operative law yet. Existing remedy duties already apply, and misleading buyers about them can already attract enforcement.

Get legal advice on your store’s own refund and warranty wording before using it in policies or chat replies.