ACCC's sweeping investigation exposes dubious e-commerce returns

A key 2024-25 compliance and enforcement priorities for the Australian Competition and Consumer Commission (ACCC) is improving industry compliance with consumer guarantees. Until now, particular focus has been on consumer electronics and misconduct by retailers in connection with delivery timeframes.

This has led to a number of enforcement actions in 2024. Some retailers have had to pay penalties for making false or misleading statements about consumer rights in relation to faulty products and delivery times and making misleading representations in relation to consumer rights under the Australian Consumer Law (ACL). For more on enforcement see here. 

Online shopping and returns: ACCC’s findings

As investigations continue, ACCC conducted a sweep of more than 2,000 Australian online retailers to identify misleading practices that could deceive consumers about their rights to refunds, exchanges, and returns.

On 4 February 2025, ACCC announced that numerous instances have been uncovered where online businesses have policies or terms and conditions (T&Cs) that raise concern under the Australian Consumer Law (ACL).

ACCC’s key findings are distilled below:

• Certain items are not eligible for return, exchange or refund: some retailers have claimed that sale items, opened or used items or made-to-order products cannot be returned, exchanged or refunded – this is often not in line with consumer guarantees under the ACL.
• Misleading statements about consumer guarantees: some retailers have been found to be using broad language that implies that consumer rights are limited or do not exist, such as implying that manufacturer warranties as the only avenue for consumers to claim remedies for faulty goods.
• Fees for returns: some retailers are charging restocking fees or are requiring consumers to pay return shipping even when the product is damaged or faulty.

ACCC’s response

As next steps, ACCC sent warning letters to several businesses whose policies and T&Cs raised concerns. It is reported that most retailers took swift action to revise or remove the concerning statement from their websites and are improving consumer guarantee messages to consumers.

What are the consumer guarantees?

The ACL provides consumers with a set of legislated guarantees which suppliers and manufacturers make over certain goods they sell, hire or lease, and services they provide to consumers.

The consumer guarantees apply automatically and cannot be excluded, modified or limited by contract. They can also apply to a transaction governed by the laws of another country, in certain circumstances.

Guarantees applying to goods

A supplier and a manufacturer guarantee that:

• goods are of acceptable quality
• goods will match any description provided
• any express warranties will be honoured.

A supplier guarantees that a consumer is buying goods:

• that have clear title, unless otherwise stated
• that do not have undisclosed securities
• that are fit for any disclosed purpose
• with a right to undisturbed possession
• that match the sample or demonstration model provided.

A manufacturer guarantees the availability of repairs and spare parts (other than for auctioned goods).

Guarantees applying to services

A supplier guarantees that services are provided:

• with due care and skill
• which are fit for any specified purpose
• within a reasonable time (when no time is specified).

What risks do businesses face for failure to comply with the consumer guarantees?

Contractual terms that purport to exclude, modify or limit a consumer guarantee are void (save for limited exceptions relating to the replacement, or repair of goods or the resupply of services).

Where such contract terms are contained in standard form contracts, there is also a risk that these terms will be unfair under the ACL’s unfair contract terms regime.

Businesses that fail to comply with the consumer guarantees bear the risk of action from consumers. The ACL provides statutory remedies for such failures, including, amongst other things, cost recovery, rejection of goods, service remediation and a statutory cause of action for recovery of foreseeable loss and damages. These remedies operate in addition to any other remedies available under common law.

How can businesses mitigate their risk of non-compliance?

The ACCC’s recent internet sweep is indicative of its proactive enforcement of the ACL and, particularly, the consumer guarantees.

Businesses should review their contract terms to ensure they are compliant with the consumer guarantees. In particular, close attention should be paid to terms and conditions around return policies, which the ACCC has placed particular emphasis on in this recent sweep.