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ACCC sweep reveals potentially misleading conduct by Australian retailers
In February 2025, the Australian Competition & Consumer Commission (ACCC) announced that it had conducted a review of over 2,000 Australian retail websites, uncovering practices that may violate the Australian Consumer Law (ACL). In particular, the ACCC noted that several businesses had potentially misleading online return policies.
This serves as a timely reminder for businesses to review their policies and terms and conditions to ensure they are clear and comply with the ACL.
What are consumer guarantees?
Under the ACL, consumers have non-negotiable rights when buying goods and services, known as consumer guarantees. These rights cannot be reduced or undermined by businesses’ policies.
Relevant consumer guarantees include:
- Acceptable quality: Means a product is safe, durable, free from defects and does everything that similar products are commonly used for.
- Due care and skill: A consumer is entitled to have work carried out as good as what a competent service provider would be expected to provide with reasonable skills and experience.
- Fit for purpose: When you tell a service provider you require a service, or purchase a product, for a particular purpose, or make a purchase based on the advice of the business, the resulting products or services must meet that purpose.
- Reasonable time: If you agree on a delivery time, services must be provided within that time, or otherwise within a reasonable time based on the nature of the services, weather conditions or availability of parts and materials.
- Matches its description: A product description must be accurate, whether written or spoken.
Importantly, if a product or service does not meet one of the consumer guarantees, the consumer can make a claim for a repair, replacement, refund, cancellation, or compensation for damage or loss. This will apply irrespective of any returns policy a business may purport to impose.
A business cannot take these rights away, for example by displaying a ‘no refunds’ sign. It is against the law for businesses to mislead consumers about their rights to refunds or other remedies in this way.
What were the ACCC’s findings?
The ACCC sweep identified various problematic statements on websites and in terms and conditions that had the potential to mislead or deceive consumers about their rights, including:
- Imposing blanket ‘no refund’ conditions, for example:
- ‘Sale items cannot be returned, exchanged or refunded’
- ‘Items that have been opened and used cannot be exchanged or refunded’
- ‘Made to order products cannot be returned’
- Imposing time limits for returning faulty products, for example:
- ‘In the unlikely event that your item arrives damaged or faulty, please notify the store within 30 days of delivery to receive a replacement’
- Referring to manufacturer warranties as the only avenue for consumers to claim remedies for faulty goods
- Placing restrictions on consumers’ rights to a remedy, including:
- Stating that delivery fees paid for faulty items were non-refundable
- Charging restocking fees if customers returned faulty items.
As a result of these findings, the ACCC issued warning notices to several businesses that had included concerning statements, including misleading online return policies. The ACCC has flagged that it will continue to actively monitor this area and has prompted consumers to report potential breaches to ensure that enforcement action can be taken where necessary.
Recent penalties for false or misleading statements
Koala Living
Koala Living paid $56,340 in penalties for limiting consumer rights to remedies for faulty products.
In November 2024, the ACCC issued furniture and homewares retailer Koala Living with three infringement notices for making false or misleading statements about consumers’ rights to remedies for faulty products. The statements included misrepresenting that:
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- A consumer’s right to seek remedies for faulty products was limited to 72 hours, or the period of the manufacturer’s warranty; and
- Koala Living could choose the type of remedy for minor and major faults, when the choice of remedy is actually up to the consumer.
Mosaic Brands
In March 2024, the ACCC commenced Federal Court proceedings against fashion clothing and footwear retailer Mosaic Brands, better known for brands like Millers, Noni B and Rivers. The ACCC alleged that Mosaic Brands had misrepresented consumer guarantee rights about delivery timeframes.
Mosaic Brands referred to dispatch dates of 2-14 business days when, in reality, the majority of goods were delivered more than 20 days after the order date or, at times, failed to be delivered at all.
Despite Mosaic’s statements that they were experiencing shipment delays, the ACCC has alleged that this was insufficient to overcome the understanding created by the advertised delivery times. The ACCC also alleged that Mosaic wrongfully accepted payment for the goods by failing to dispatch the ordered products within the advertised delivery time or within a reasonable time.
Mazda
Mazda paid $11.5 million in penalties for making misleading representations about consumer rights repair, replacement or refund for faulty products.
In February 2024, Mazda was found to have falsely misrepresented to consumers that the only remedy available for faulty products was a repair, or in some other circumstances, it only offered a refund of a portion of the vehicle’s purchase price.
Again, this case makes clear that despite any representations a business may make, a consumer has a right at law to their consumer guarantees, and it is up to the customer to choose an appropriate remedy. It is not up to the business.
The final word
Given consumer guarantees are a continued enforcement priority for the ACCC, businesses should be advised to regularly review all policies and terms to ensure ongoing and strict compliance with the ACL.
While blanket statements like ‘no refunds’ should be avoided, consumer guarantees do not apply if the consumer has changed their mind, or if the consumer has misused the product in a way that caused the problem. Businesses should clarify that any “no returns” policy applies only to change-of-mind returns, as consumers are always entitled to return faulty products, including when they are on sale.
