No refund on sale items in Australia? The myth and the law

The zip on your half-price jacket fails, and the store points to a sign: "No refunds on sale items."

Quick answer

Why you're returning the item decides the answer. If you've simply changed your mind, the Australian Consumer Law (ACL) doesn't require a refund, whether the item was on sale or not. The store's own policy generally decides that. A store must not mislead you about its policy and may be bound by a clear promise it makes, and separate termination rights can apply to an unsolicited consumer agreement, such as certain door-to-door or uninvited phone sales. If the item is faulty, doesn't match its description, or isn't fit for a purpose you made known, the consumer guarantees apply whether you paid full price or 70% less, and a "no refunds on sale items" sign can't take them away.

On a faulty sale item:

• A non-major fault that can be remedied (a loose button, a zip that can be replaced): you can require the seller to remedy it within a reasonable time. The seller chooses the form of remedy: repair, replacement with goods of an identical type, or a refund (section 261).
• A major failure, or one that can't be remedied (possibly a heater that won't turn on and can't, easily and within a reasonable time, be remedied, or a "leather" bag that turns out to be vinyl): you may be able to reject the item and choose a refund or a replacement of the same type and similar value if one is reasonably available, if your right to reject hasn't been lost under section 262. Alternatively, you can keep it and claim compensation for any reduction in its value below the price paid or payable.
• A defect pointed out to you before you bought (a "seconds: torn seam" ticket, for example): you generally can't rely on the acceptable-quality guarantee for that defect, but other faults are still covered.

Your guarantee remedies run against the business that sold you the item, though the manufacturer may also be liable in damages in some cases. If it refuses, your state or territory consumer body may help, and a tribunal or court with jurisdiction can make a binding order.

What the law actually says

The ACL gives you consumer guarantees when a business supplies goods to you in trade or commerce. There is no exception for goods sold at a discount.

Who counts as a consumer. Under section 3 of the ACL, you acquire goods as a consumer if any one of these applies:

• the amount paid or payable did not exceed $100,000;
• the goods are of a kind ordinarily acquired for personal, domestic or household use or consumption (this is about the kind of goods, not your own use); or
• the goods are a vehicle or trailer acquired mainly to transport goods on public roads.

The exclusions cover goods acquired for re-supply, or to use up or transform, in trade or commerce, in the course of production or manufacture or of repairing or treating other goods or fixtures on land. Check how section 3 applies to your purchase.

The guarantees that matter for sale items:

• Acceptable quality (section 54). Goods must be as fit for all the purposes for which goods of that kind are commonly supplied, acceptable in appearance and finish, free from defects, safe and durable. The test is what a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects) would regard as acceptable. That assessment has regard to the nature of the goods, their price (if relevant), any statements on packaging or labels, any representation by the supplier or manufacturer, and any other relevant circumstances of the supply. How a markdown affects the assessment depends on the facts. The guarantee is judged at the time of supply.
• Fitness for a disclosed purpose (section 55). If you told the seller (or the manufacturer, or a person who conducted prior negotiations) what you needed the item for, it must be reasonably fit for that purpose, and for any purpose the seller represented it to be reasonably fit for. The guarantee doesn't apply if the circumstances show you didn't rely on the skill or judgment of the seller, the person who conducted prior negotiations or the manufacturer (as the case may be), or that it was unreasonable to rely on it.
• Matching the description (section 56). A sale listing can still describe the goods. If goods supplied by description don't correspond with that description, the guarantee is breached.

Where a sale really does limit your rights. Under section 54(4), goods are taken to be of acceptable quality if the only reasons they fall short were specifically drawn to your attention before you agreed to buy. Section 54(5) treats a transparent written notice displayed with the goods as doing that. Separately, under section 54(7), if you examined the item before buying, it doesn't fail acceptable quality because of a defect that examination ought reasonably to have revealed. A clearly ticketed "faulty: cracked lid" item may therefore carry no acceptable-quality claim for the cracked lid, though it may still carry one for a motor that dies the next day. A general "sold as is" label that doesn't name the defect may not specifically draw it to your attention. These rules affect only the acceptable-quality guarantee.

Why the sign doesn't work for faults. Under section 64, a contract term is void to the extent that it purports to exclude, restrict or modify the guarantees, the exercise of the rights they confer, or liability for failing to comply with them. Separately, section 64A allows a supplier's contract to limit its liability for goods or services not of a kind ordinarily acquired for personal, domestic or household use or consumption. For goods, the limit can be to repair, replacement or equivalent goods, or their cost, but not for the guarantees of title, undisturbed possession and freedom from undisclosed securities (sections 51 to 53). For services, it can be to supplying them again or the cost of doing so. The limitation doesn't apply if the consumer establishes that it isn't fair or reasonable for the supplier to rely on it. Our guide to section 64 and disclaimers goes further.

The ACCC puts it plainly: "It's illegal for businesses to rely on store policies or terms and conditions which deny these rights."

The sign itself can be a problem. A sign that suggests you have no remedy for a faulty sale item may be a false or misleading representation concerning the existence, exclusion or effect of a guarantee, right or remedy under section 29(1)(m). It may also be misleading conduct under section 18. A sign that makes clear it applies only to change of mind is a different matter. A contravention can support a damages claim under section 236 for loss caused by it, which must be brought within 6 years after the day the cause of action accrued (section 236(2)). You'd need evidence of the loss; under general legal principles, loss you could reasonably have avoided may not be recoverable, and you can't recover the same loss twice.

Remedies. Your remedies depend on whether the failure is major. Under section 260, a failure is major if any of these applies:

• a reasonable consumer fully acquainted with the nature and extent of the failure would not have acquired the goods;
• the goods depart in one or more significant respects from their description, sample or demonstration model;
• the goods are substantially unfit for a purpose for which goods of the same kind are commonly supplied, and can't, easily and within a reasonable time, be remedied to make them fit;
• the goods are unfit for a disclosed purpose made known to the supplier (or the person who conducted prior negotiations), and can't, easily and within a reasonable time, be remedied to make them fit; or
• the goods are not of acceptable quality because they are unsafe.

Under section 260(2), two or more failures together are also a major failure if a reasonable consumer fully acquainted with the nature and extent of those failures, taken as a whole, would not have acquired the goods. This applies to contracts entered into on or after 18 December 2020, and the failures needn't relate to the same guarantee. Our guide to what a major failure means covers this in more detail.

If the failure is major, or can't be remedied, you have two alternative paths:

1. Reject the goods (if the right to reject hasn't been lost under section 262) and choose a refund or a replacement of the same type and similar value, if one is reasonably available (section 263).
2. Keep the goods and claim compensation for any reduction in their value below the price paid or payable (section 259(3)(b)).

If the failure isn't major and can be remedied, section 259(2) lets you require the supplier to remedy it within a reasonable time, and under section 261 the supplier chooses whether to repair the goods, replace them with goods of an identical type, or refund. If it refuses or doesn't do so within a reasonable time, you can have the failure remedied elsewhere and recover all reasonable costs of doing so, or reject the goods (subject to section 262).

You can also claim other loss caused by the failure that was reasonably foreseeable (section 259(4)), if you can evidence it. Under general legal principles, loss you could reasonably have avoided may not be recoverable, and you can't claim the same loss twice.

A refund after a valid rejection means money, not store credit (section 263(5)). And you can take action whether or not the goods are in their original packaging (section 259(7)).

When this applies (and when it doesn't)

Your guarantee rights likely apply when:

• you bought from a business in trade or commerce, including sole traders, online stores and outlet shops;
• you acquired the item as a consumer under section 3;
• the problem is a fault, a mismatch with the description, or unfitness for a purpose you made known; and
• the problem wasn't specifically drawn to your attention before you bought, and wasn't one your own pre-purchase examination ought reasonably to have revealed.

They likely don't help when:

• You changed your mind. A store can lawfully refuse change-of-mind returns on sale items, and if it offers them, it can set conditions such as exchange or credit only. Our guide to return policies versus the ACL explains the line.
• You caused the damage. Goods aren't treated as unacceptable where you caused the problem (or failed to take reasonable steps to prevent it) and they were damaged by abnormal use (section 54(6)). Both are needed.
• It was a genuine private sale. A one-off sale by an individual who isn't in business, such as on a community marketplace, usually carries no claim under the guarantees in sections 54 to 59, because those need a supply in trade or commerce. Whether a seller is in business depends on the substance and regularity of what they do, not how they describe the sale. The title guarantees in sections 51 to 53 don't need trade or commerce, but the section 259 remedies do, so a title problem in a private sale needs another legal route. Other laws may still affect a private sale.
• You bought at a sale by auction conducted by the seller's agent. Sections 54 to 59 don't apply, and only the title-related guarantees remain.

Bought online or through a marketplace? Identify who actually supplied the item from the checkout screen, the receipt and the terms that applied when you ordered. On a marketplace, the ACCC says your rights run against the seller you buy from, not the platform itself, though the platform may be able to help, depending on the situation. If the platform sold the item itself, it is that seller. A platform is also responsible for its own conduct, such as its own promises or misleading statements, and may offer its own buyer-protection or dispute process. The ACCC also says an overseas business that supplies directly to consumers in Australia must follow the ACL, but you aren't covered if the business doesn't directly offer its products in Australia, if the goods went to an overseas address and were forwarded, or if the whole transaction happened overseas. Getting a remedy from an overseas business can also be hard in practice.

What to do today

1. Stop using anything unsafe. If a discounted electrical item, heater or child's product may be unsafe, stop using it and check Product Safety Australia for a recall.

2. Gather proof of purchase. A tax invoice, order email, card or bank statement, or loyalty record may be sufficient, depending on whether it identifies the business, the transaction and the goods clearly enough. For purchases of $75 or more (excluding GST), the supplier must give you a proof of transaction as soon as practicable (section 100). For smaller purchases, you can request one as soon as practicable after supply, and the supplier must provide it within 7 days of your request.

3. Photograph the sale ticket and any signs. Note exactly what any defect notice said. Under section 54(4), it only covers the reasons it specifically disclosed.

4. Document the fault. Take dated photos or video, note when you first noticed it, and record how you used the item. If you hand over a device for repair, back up your data first and read the repair notice. A repairer must give you one before accepting goods for repair, and it must warn of possible data loss if the goods can store user data, and include the prescribed text if it's the repairer's practice to use refurbished parts, or to supply refurbished goods instead of repairing (section 103).

5. Get an independent opinion if the cause is disputed. If the store says you caused the damage, a written report from an independent repairer or other qualified person may help. Ask it to cover the cause, whether and how the fault can be fixed, the likely cost, and the effect on the item's value.

6. If you paid recently, check a chargeback or BNPL dispute. Contact the business first. If you paid by card, ask your card issuer whether a chargeback may be available. If you used buy now pay later, ask the provider about its own dispute process, which is not a chargeback. Time limits follow the card scheme's or provider's rules, not the ACL, so check now. Nothing guarantees an outcome, and there is no chargeback right for a change of mind.

7. Write to the seller. State the purchase date and price, the fault, and the guarantee you say has been breached. Then say what you want:

   • Require a remedy for a non-major fault that can be remedied.
   • Reject the item only where the failure is major or can't be remedied, or where the seller didn't fix a non-major fault within a reasonable time. Rejection is always subject to section 262, and you must give the ground for rejecting.

   If you reject, you must return the goods unless they've already been returned to, or retrieved by, the supplier. The supplier must, within a reasonable time, collect them at its own expense where they can't be returned, removed or transported without significant cost to you because of the nature of the failure or their size, height or method of attachment (section 263). fairgo can generate a demand letter for you.

8. Set a deadline. 14 days is a sensible choice (a practical default, not an ACL requirement).

9. Keep the item. Disposing of it can end your right to reject.

What if the business refuses

Your state or territory consumer protection body. It may help, for example by contacting the business or conciliating, if your complaint meets its criteria. Most expect you to have tried to resolve the matter with the business first, and eligibility rules vary by state and dispute type (in the ACT, for example, statutory conciliation applies only where the remedy you seek is worth $5,000 or less). These bodies don't make binding orders in ordinary consumer disputes and can't make the business settle. Contact details are at /agencies.

A tribunal or court with jurisdiction. In NSW, Victoria, Queensland, the ACT and the NT, a tribunal (NCAT, VCAT, QCAT, ACAT or NTCAT) hears many consumer claims within its limits. In Western Australia, South Australia and Tasmania, ordinary consumer claims go to the Magistrates Court. Jurisdiction depends on each forum's enabling legislation, the type of claim and the amount, so confirm the forum and its current thresholds on the official site before filing. You can usually run a claim without a lawyer, though some forums restrict legal representation (QCAT, for example, requires permission). Check current filing fees on the official site, and ask about fee exemptions, reductions or deferrals if cost is a concern. Our guide to choosing the right tribunal or court has more.

The ACCC. The ACCC investigates systemic conduct rather than individual disputes, so it won't resolve your claim. Reporting a business that displays signs denying guarantee rights can still be worthwhile.

If the business offers store credit or a partial refund, read the terms carefully. A "full and final" settlement or release may end your claim, and writing "under protest" doesn't necessarily preserve your rights. Consider getting advice before signing anything described as final.

Common mistakes

• Assuming the manufacturer's warranty is the limit. A warranty sits on top of your guarantee rights and doesn't replace them. Your remedies under sections 259 to 263 run against the seller. In some cases you can also claim damages from the manufacturer under section 271, including for any reduction in value below the lower of the price you paid and the average retail price, and for reasonably foreseeable loss (section 272). If you asked the manufacturer to repair or replace the item under its express warranty, you can't claim that reduction in value from it unless it refused or failed to fix the problem, or didn't do so within a reasonable time (section 271(6)). The manufacturer has defences (section 271(2)), and the action must be started within 3 years after you first became aware, or ought reasonably to have become aware, that the guarantee wasn't complied with (section 273). Our guide to consumer guarantees versus warranties explains the difference.

• Waiting too long. The ACL has no single warranty-style expiry for the guarantees, but limitation laws and forum rules still apply. The right to reject is lost under section 262 if any of these applies:

  • (a) the rejection period has ended. This is the period from supply within which it would be reasonable to expect the failure to become apparent, having regard to the type of goods, their likely use, how long they can reasonably be used, and the amount of use;
  • (b) you have lost, destroyed or disposed of the goods;
  • (c) the goods were damaged after delivery for reasons not related to their state or condition at the time of supply; or
  • (d) the goods have been attached to, or incorporated in, any real or personal property and can't be detached or isolated without damaging them.

  Losing the right to reject doesn't necessarily end every ACL remedy; depending on the circumstances, compensation or damages may still be available.

Related reading

• Business refused your refund? Here's what to do next
• Can I demand a refund? When Australian Consumer Law gives you the right
• Section 64 of the ACL: why disclaimers can't remove your rights
• Clothing return policies versus the ACL
• Section 29: false or misleading representations about goods
• Is a restocking fee legal in Australia?

This article is general information about Australian Consumer Law, not legal advice. It also touches on complaint and escalation pathways (state and territory consumer bodies, tribunals and courts, the ACCC, card chargeback rules and buy now pay later providers' dispute processes) and limitation laws, whose scope, rules, thresholds and processes sit outside the ACL or can change. Confirm the current position with the relevant body before lodging. For advice on your specific case, see your state or territory consumer body — full list at /agencies.