Software refund Australia ACL: your rights when digital purchases fail

You paid for software — a desktop app, a subscription platform, a mobile app, or a SaaS tool — and it doesn't do what the product page promised. Maybe it crashes constantly, lacks features that were clearly advertised, or simply can't run on the hardware it claimed to support. The vendor's response is a link to their "no refunds on digital products" policy. Sound familiar?

That policy may not be the last word. The Australian Consumer Law (ACL) applies to many digital purchases, and it can give you a path to a refund, a fix, or compensation even when the vendor insists otherwise. Understanding how the ACL interacts with software — and where the genuine limits are — is the first step to getting a result.

Quick answer

Whether you have a remedy under the ACL depends on a few key variables: who you bought from, where they operate, whether the transaction is characterised as a supply of goods, services, or a mixed supply (common for SaaS platforms), and how significant the failure is. In modern practice, many digital products (especially SaaS) involve both a good (software) and a service (ongoing access and maintenance), meaning both sets of guarantees may apply concurrently.In general terms, if you bought software from a business supplying to Australian consumers, the ACL's consumer guarantees are likely to apply automatically. A "no refunds on digital products" policy cannot override those guarantees. What remedy is available — a refund, a fix, or compensation — will usually depend on whether the failure is classified as major or minor, and on the nature of the product. The sections below work through each of these variables in plain English.

What the law actually says

The ACL is Schedule 2 of the Competition and Consumer Act 2010. It applies to consumers — broadly, people who acquire goods or services that are not acquired for re-supply or for use in a manufacturing or repair process, and where the price does not exceed $100,000 (increased from $40,000 in 2021), or where the goods or services are of a kind ordinarily acquired for personal, domestic, or household use (or where the goods or services are of a kind ordinarily acquired for personal, domestic, or household use).

Is software "goods" or "services" under the ACL?

This is the threshold question, and the answer shapes which guarantees apply. Australian courts and tribunals have generally treated software supplied as a one-off purchase (a boxed program, a perpetual licence, a downloaded app) as goods. Ongoing subscription services — where you're paying for continued access and the vendor is actively maintaining and delivering the platform — are more likely to be treated as services. Some products sit in both camps: a subscription that also involves a downloaded application may attract guarantees from both categories.

For goods, the key guarantees are:

• Section 54 — Acceptable quality. Software must be safe, free from defects, and fit for the purposes for which software of that kind is commonly used. An application that crashes on launch, corrupts data, or is riddled with bugs that prevent normal use is unlikely to meet this standard.
• Section 55 — Fitness for disclosed purpose. If you told the seller you needed the software to do something specific — say, edit RAW photo files or integrate with a particular accounting platform — and you reasonably relied on their skill and judgment in recommending or supplying it, the software must be capable of doing that.
• Section 56 — Match the description. If the product page listed features that the software doesn't actually have, this guarantee is likely breached. Screenshots, feature lists, and marketing copy all form part of the description.

For services (including SaaS subscriptions), the key guarantees are:

• Section 60 — Due care and skill. The service must be performed competently. A platform that regularly loses data, has persistent outages beyond what any reasonable user would expect, or fails to deliver core advertised functionality may fall short of this standard.
• Section 61 — Fitness for disclosed purpose. Similar to section 55 for goods: if you made known the purpose you needed the service for, and it was reasonable to rely on the supplier's skill and judgment, the service must be fit for that purpose.

What about misleading advertising?

Section 18 of the ACL prohibits conduct that is misleading or deceptive, or likely to mislead or deceive. If a vendor's product page made specific claims about features or compatibility that turned out to be false, that may be a separate basis for a remedy — independently of whether a consumer guarantee was breached. See our section 18 explainer for how this works in practice.

Major vs minor failure

The remedy available to you depends on whether the failure is major or minor. Under section 260 of the ACL, a failure is major if:

• a reasonable consumer would not have bought the product had they known about the failure;
• the software is substantially unfit for its normal purpose and cannot be made fit within a reasonable time;
• the software is significantly different from its description; or
• the failure makes it unsafe to use.

For a major failure in a goods context, you can choose your remedy: a refund, a replacement, or keeping the goods and seeking compensation for the reduction in value. For a major failure in a services context, the ACL-accurate framing is that you may cancel the contract and seek a refund for the unconsumed portion, or keep the contract and seek compensation or a reduction in price.

For a minor failure, the supplier gets the first opportunity to fix the problem within a reasonable time. If they don't, you can then seek a refund or other remedy.

When this applies (and when it doesn't)

The ACL is likely to apply when:

• You bought from a business — including a sole trader or a company — that is operating in trade or commerce and supplying to Australian consumers.
• The software was acquired for personal, domestic, or household use, or the price was under $100,000 and it was not acquired for re-supply or for use in a manufacturing or repair process.
• The failure relates to the software not doing what it was advertised to do, not matching its description, or being unfit for a purpose you disclosed to the supplier.

The ACL may not apply, or may be harder to enforce, when:

• You bought from an overseas vendor with no Australian presence. The ACL can still apply if the seller supplied directly to an Australian consumer, but factors like whether the seller has an Australian Business Number, an Australian warehouse, or prices in AUD are relevant context — though not individually decisive. Enforcement across borders can be difficult in practice. See our guide on buying from overseas sellers for more detail.
• The software was acquired for business use above the ACL's consumer threshold. Business-to-business transactions above $100,000 are generally outside the consumer guarantees, though other ACL provisions (like section 18) may still apply.
• You simply changed your mind. If the software does what it said it would and you just don't want it anymore, the ACL doesn't require the vendor to refund you — though some vendors offer this as a goodwill policy.
• The failure was caused by your own hardware not meeting the stated system requirements, or by your own configuration choices. A vendor can legitimately point to minimum system requirements if those were clearly disclosed before purchase.
• The ACL does not set a single fixed warranty-style expiry period for claims, but timing still matters. Delay can make it harder to demonstrate that a fault reflects a lack of acceptable quality at the time of supply, and your right to reject goods for a refund may be lost if you are taken to have “accepted” them under section 262 (for example, by using the software for an extended period without complaint).

A note on terms of service

Many software vendors include terms that purport to exclude liability, limit remedies to a credit, or disclaim all warranties. Under section 64 of the ACL, a term that purports to exclude, restrict, or modify the consumer guarantees is void to the extent it does so. Clicking "I agree" to a terms of service document does not remove your statutory rights. For more on how this works, see our article on consumer guarantees vs warranty. However, liability may sometimes be limited (not excluded) for non-consumer goods/services under section 64A.

What to do today

If you believe a software purchase has failed to meet the consumer guarantees, here is the sequence that tends to produce results:

1. Document the failure clearly. Screenshots, screen recordings, error messages, and a written log of what the software does (or doesn't do) compared to what was advertised. Save the product page — use a web archive if the vendor has updated it since you purchased.

2. Identify the relevant guarantee. Is the software simply not working (section 54 — acceptable quality)? Does it lack features that were listed on the product page (section 56 — match description)? Did you tell the vendor what you needed it for before buying (section 55 or 61 — fitness for disclosed purpose)? Being specific strengthens your claim.

3. Contact the vendor in writing. Email is ideal — it creates a record. State the date of purchase, describe the failure, identify the ACL guarantee you say has been breached, and state what remedy you are seeking. Give a reasonable deadline for a response (10–14 business days is usually appropriate). You can state whether you consider the failure “major”. This signals that you are asserting a right to a refund immediately, rather than accepting a repair.

4. Keep records of all communication. If the vendor's support team has already acknowledged the bug or the missing feature in a chat log or email, that is valuable evidence.

5. If the vendor doesn't respond or refuses, you have escalation options — covered in the next section.

If you're not sure how to write the demand letter, fairgo can generate one for you in about 90 seconds. The wizard identifies the relevant ACL sections based on what happened and produces a letter you can send under your own name.

What if the business refuses

A refusal — or silence — is not the end of the road. The escalation path for software disputes is the same as for other consumer disputes:

• Your state or territory Fair Trading body. Each state and territory has a free conciliation service that can contact the vendor on your behalf. A full list of contact details is at /agencies. This is often the fastest route to a resolution, particularly for Australian-based vendors.

• Your state consumer tribunal. If conciliation doesn't produce a result, you can file a claim at NCAT (NSW), VCAT (Victoria), QCAT (Queensland), SAT (Western Australia), SACAT (South Australia), or the equivalent in your territory. Filing fees are modest and you don't need a lawyer. Tribunals are experienced with digital product disputes and are generally familiar with the argument that "no refunds on digital products" does not override the ACL.

• Credit card chargeback. If you paid by credit card, your bank may be able to initiate a chargeback for goods or services not as described. This is a separate process from the ACL and runs through your card scheme's rules. It is worth pursuing in parallel, particularly for overseas vendors where enforcement may be difficult. Chargebacks are typically subject to strict deadlines (often 60–120 days from transaction or discovery).

• For online purchases more broadly, our guide on online purchase rights under the ACL covers additional options and the process in more detail.

The threat of escalation — stated clearly in your demand letter — often prompts vendors to resolve the dispute without the need to file. Businesses that sell to Australian consumers generally understand that "no refunds on digital products" is not a defence to a consumer guarantee claim.

Common mistakes

A few patterns come up repeatedly in software refund disputes:

• Accepting "it's a digital product" as a reason. The ACL does not carve out digital products as a category exempt from consumer guarantees. The nature of the product may affect which guarantees apply and how, but it does not remove them.

• Not documenting the advertised features before purchase. Vendors sometimes update their product pages after complaints. If you can show what the page said when you bought — through a screenshot, a web archive, or a cached version — your claim is much stronger.

• Waiting too long to complain. While the ACL does not set a single fixed expiry date for consumer guarantee claims, delay can work against you. The longer you use the software without raising the issue, the harder it may be to argue the failure existed at the time of supply.

• Conflating a bug fix request with a consumer guarantee claim. If you're asking the vendor to fix a bug, you're in their support queue. If you're asserting a consumer guarantee breach, you're making a legal claim. The framing matters — be clear in your communication that you are relying on the ACL.

• Going straight to the ACCC. The ACCC investigates systemic conduct and does not resolve individual disputes. For your specific case, Fair Trading and your state tribunal are the right forums. The ACCC can be worth notifying if you believe the conduct is widespread, but it is unlikely to get your money back directly.

• Assuming the vendor's terms of service are the final word. As noted above, terms that purport to exclude the consumer guarantees are void under section 64. The vendor's policy document does not override the ACL.

For services disputes more broadly — including ongoing subscription platforms — our article on services that go wrong under the ACL covers the remedies framework in more detail.

Related reading

• Buying from overseas sellers: does the ACL apply?
• Online purchase rights under the ACL
• Services that go wrong: your ACL rights

This article is general information about Australian Consumer Law, not legal advice. The ACL is complex and your situation may have details that change the analysis. For advice on your specific case, see your state's Fair Trading body — full list at /agencies.