Key points

• The Australian Competition and Consumer Commission (ACCC) has recently reviewed over 2,000 Australian retail websites and found many misleading terms and conditions, which it considers are in breach of the Australian Consumer Law (ACL).
• Of particular concern were misleading statements regarding consumers’ rights to exchange, refund or return products and blanket ‘no refund’ statements or time limits on returns.
• The ACCC has issued warning letters to multiple retailers, and we expect to see more enforcement of the Australian Consumer Law in 2025. 

Background

Recently, the ACCC has conducted a comprehensive audit of over 2,000 Australian retail websites, uncovering an apparent trend of misleading and deceptive statements in retailer’s return, refund and exchange policies. 

This latest enforcement activity is consistent with the ACCC’s Compliance and Enforcement Priorities for 2024-25 (Priorities) to promote compliance with the Australian Consumer Law including consumer guarantees in the retail sector. 

Recent Enforcement

For context, the audit is unsurprising given recent enforcement activity by the ACCC has borne fruit.  For example, in February 2024, one retailer and automotive manufacturer was ordered to pay $11.5 million in penalties for misleading and deceptive conduct including misleading representations regarding consumer guarantees. More recently, the ACCC conducted an investigation into misrepresentations during Black Friday ‘sales’. The Black Friday investigation raised concerns about, among other trends, ‘on sale’ products selling for the same non-sale price; a lack of clarity about items which sales did or did not apply to; and use of ‘Up to X% off’ (which is problematic in the context where the ‘up to’ text is not prominent, or few products are on sale at X% off).

Following their audit, the ACCC has sent warning letters to retailers requiring changes to their terms and conditions.

Impact

The ACCC’s enforcement activity serves as an important warning to retailers, including foreign retailers, to ensure their terms and conditions comply with the Australian Consumer Law.  Many retailers unlawfully seek to restrict consumer guarantees or rights to refund, return, and exchange.  Generally, under the mandatory Australian consumer guarantees, goods must be of acceptable quality, fit for purpose, and match their description, while services must be provided with due care and skill, be fit for purpose, and delivered within a reasonable time.  Under Australian Consumer Law, the consumer guarantees operate separately from a warranty offered by a business and cannot be waived or overridden.

Common problematic terms and conditions identified in the audit included statements to the effect that:

• no refunds are allowed under any (or only limited) circumstances;
• refunds are not available for opened or used items;
• faulty products can only be returned within limited timeframes;
• restocking, repair or processing fees will be charged for returns of faulty products;
• delivery fees paid by the consumer for returned faulty items are non-refundable; and
• customers must cover return shipping costs for faulty goods.

Retailers must take particular care when setting out customer rights in relation to return, refund and exchange (including change of mind).  Businesses that fail to comply risk regulatory intervention and reputational damage, as well as potential penalties.   

In 2025, we expect to see the ACCC continue to enforce the consumer protection laws against retailers within the scope of their current Priorities.  Retailers should be aware they are subject to the Australian Consumer Law when established in Australia or ‘carrying on business in Australia’, even if from overseas.

The ACCC 2025 Priorities include review of:

• claims in relation to the environment and sustainability;
• the supermarket sector (particularly food and groceries);
• the digital economy (including influencer marketing, online reviews, in-app purchases and price comparison websites);
• unfair contract terms;
• consumer electronics;
• delivery timeframes; and
• consumer product safety for young children.

Retailers should also be aware of the potential changes in Australian law coming to regulate unfair trading practices and dark patterns (see our article: Australia expected to regulate dark patterns and other unfair trading practices in 2025).

Next Steps

Dentons has experience in advising on business terms and conditions to align with Australian law, including the Australian Consumer Law. Please contact Partners Robyn Chatwood, Vanessa Gore or your usual Dentons contact if you would like advice about these matters or a review of your terms and conditions for compliance.