Published on May 2, 2017

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‘Operation Refund’


Do you have a refund, returns, or exchange policy? Don’t have NSW Fair Trading knocking on your door – check that your policy meets Australian Consumer Law!

Across two days in February 2017, NSW Fair Trading visited more than 560 businesses in rural and metropolitan NSW as part of ‘Operation Refund’.

‘Operation Refund’ was a crusade to check businesses who may be failing to uphold Australian Consumer Law. The compliance officers were checking business policies on refunds, returns and exchanges.

Fair Trading officers removed illegal refund, return and exchange policy signage in businesses, and made sure to ensure business operators were educated with correct practices under Australian Consumer Law.

In the crackdown, compliance officers found that clothing shops, discount variety stores and pharmacies were amongst the worst offenders. One in five retailers were identified to improperly refuse refunds and advertise illegal policies on signs in shop windows and on receipts.

Breaking Australian Consumer Law can be a costly mistake as illegal refund policies can mean businesses are fined a penalty of $11,000 if prosecuted.


Refund Policy Checklist:

Ensure you have a refund policy in place


  • It is illegal for a shop or business to claim consumers have no right to a refund. Signs that say “no refunds”, “no refunds on sale items”, or “exchange or credit note only for return of sale items” are illegal.
  • Consumers are entitled to a refund if there is a problem with the product ie. Faulty or doesn’t perform as reasonably expected to. The business who sold you the product not the manufacturer are obliged to resolve issues.
  • Returns do not have to be in original packaging.
  • Proof of purchase comprises of a tax invoice or receipt, credit card statement, confirmation or receipt number on phone or email, warranty card with date, price and place of purchase, or serial or production numbers if stored on retailer’s computers.
  • Australian Consumer Law’s guarantees require a product to be of ‘acceptable quality’ throughout its reasonable life – regardless of lapsed warranties.
  • Consumers are not entitled to a refund if they simply change their mind or find it cheaper elsewhere.

For more information on Australian Consumer Law obligations, please visit: