Australian Consumer Law: A Plain-English Guide for Online Sellers

Selling online gives Australian small businesses access to customers across the country and overseas. It also brings responsibilities under the Australian Consumer Law (ACL), which is contained in the Competition and Consumer Act. The ACL applies to most businesses, regardless of size, and it covers everything from product descriptions to refunds and warranties.

What the Australian Consumer Law covers

The ACL sets out consumer guarantees that apply automatically when you sell goods or services to consumers. These guarantees include that goods are of acceptable quality, fit for purpose, match the description, and are free from defects. Services must be delivered with due care and skill, be fit for purpose, and be completed within a reasonable time.

Your terms and conditions cannot override these guarantees. Even if you state "no refunds" on your website, a customer may still be entitled to a remedy if a product fails to meet a consumer guarantee. This is a common area of confusion for online sellers.

Refunds, returns and cancellations

Customers do not have an automatic right to a refund if they change their mind. However, if a product is faulty, significantly different from the description, or unfit for its purpose, you must offer a remedy. The remedy may be a repair, replacement or refund, depending on whether the problem is major or minor.

• Major failure: The customer can choose a refund or replacement, and may also seek compensation for other losses.
• Minor failure: You can choose to repair, replace or refund, but you must act within a reasonable time.
• Change of mind: You are not required to offer a refund, but you can choose to have a returns policy. If you do, it must be clear and followed.

Your returns policy should be easy to find, written in plain English, and consistent with the ACL. Do not use wording that suggests customers have fewer rights than they do.

Advertising and marketing claims

Any claim you make about your products or services must be accurate, truthful and able to be substantiated. This applies to website copy, social media posts, email marketing and paid ads. Misleading claims can attract penalties from the ACCC and state consumer affairs agencies.

If you work with a digital marketing specialist or SEO agency, make sure they understand your obligations. Claims such as "best in Australia" or "guaranteed results" should be avoided unless you can prove them. Testimonials and reviews must be genuine, and you should not edit them to change their meaning.

Pricing is another focus area. Display prices clearly, including any mandatory fees or charges. If you use a strike-through price, the original price must be genuine.

Warranties, repairs and record keeping

Manufacturers may offer express warranties, but these are in addition to consumer guarantees. You cannot tell a customer to deal only with the manufacturer if the product is faulty. Your business is responsible for resolving the issue.

Keep records of customer complaints, repairs, refunds and replacements. These records help you identify recurring product issues and demonstrate that you have acted in good faith. If you operate from a virtual or shared office, ensure your business address is correct on your website and invoices so customers can contact you.

For online sellers, it is also important to have a clear privacy policy explaining how you collect and use personal information. The Privacy Act applies to many businesses, and customers expect transparency.

Building trust and staying compliant

Complying with the ACL is not just about avoiding penalties. It builds trust, reduces disputes and encourages repeat business. Train your staff and contractors on consumer guarantees, respond to complaints promptly, and review your website terms regularly.

If you are unsure about your obligations, seek advice from a lawyer or business adviser familiar with Australian consumer law. The ACCC website also provides detailed guidance for small businesses.

Frequently asked questions

Do I have to offer a refund if a customer changes their mind?

No. Under Australian Consumer Law, you are not required to provide a refund for change of mind. However, you can choose to have a returns policy, and if you do, it must be clear and followed.

Can I say my product is "the best" in my marketing?

You should only make claims you can substantiate. Broad, unqualified claims like "the best" can be misleading and may breach the law. Use specific, evidence-based language instead.

Does Australian Consumer Law apply to overseas customers?

The ACL generally applies to sales made in Australia, including online sales to Australian consumers. If you sell to customers overseas, other consumer laws may also apply, so it is wise to seek advice.