Retailers beware: 4 tips to avoid post-Christmas return and refund headaches

Business & Commercial, General news

By Matt Windle – Business Law Specialist

As 2020 came to a close, many retailers relished the sales of the Christmas season after a year of so many unknowns and downturns.

Retailers must ensure they understand consumers’ rights and business obligations under the Australian Consumer Law (ACL) for post-Christmas returns and refunds.

Here are my top 4 tips to ensure your post-Christmas returns and refunds go smoothly so you can keep converting those sales and purchases into repeat customers this year.

1. Know the basics for consumer guarantee

The ACL has a basic set of guarantees for consumers when buying products. There are certain remedies you must abide by for your customers if a product does fail to meet these guarantees. This will generally include a repair, replacement or refund.

Did you know, customers who received your product as a gift is entitled to the same rights as customers who bought the products from you directly?

The remedy you must provide will depend on whether the product has a major or minor problem:

  • If it is major, the customer is allowed to choose a repair, replacement or refund
  • If it is minor, you can choose which option to offer

2. Specific warranties cannot replace the basic consumer guarantees

If you choose to offer specific warranties on your products, these operate in addition to the ACL consumer guarantees and they cannot override the consumer guarantees

3. Make your returns policy clear

Do you have a policy that allows customers to return or exchange your products if they change their mind?

Any policy that includes change of mind clauses are not required by the ACL consumer guarantees so, you will need to make those terms clear to your customers and honour them consistently. You can have these on display in-store, on your website and included in your order confirmation emails to make sure your customers know exactly what is available to them when purchasing from you.

4. Avoid misleading consumers

We know the post-Christmas rush can be busy for retailers with change of mind or fault enquiries after the New Year fog lifts through January and February.

My final tip is to ensure you are not misleading customers about their rights. You must be careful what you say and the wording you use in signs, advertisements, on your website and in email or social media messages.

It’s important to remember that consumer guarantee rights are automatic and cannot be excluded, modified or restricted, which means you should not:

  • display “no refund” signs
  • represent that faulty items cannot be returned or exchanged, except at the seller’s absolute discretion
  • tell customers that they are only entitled to a repair, when in fact their rights include a refund or replacement
  • make decisions about providing a repair, replacement or refund on the basis of the terms of the product warranty, or the terms of your returns policy only. You must make such decisions on the basis of your obligations under the ACL consumer guarantees.

More information

If you are looking for further advice on customer rights, your obligations as a retailer or to review your terms and conditions of trade, contact MBA Lawyers today.

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