What is the difference between a major and a minor failure?

According to the ACCC, a minor failure can be fixed in a reasonable time, and the business can choose to repair, replace or refund. A major failure includes products that are unsafe, significantly different from the description, or would not have been bought had the customer known about the problem; the customer can choose a refund or replacement and may claim compensation for reduced value.

Can we say 'no refunds on sale items'?

Not as a blanket statement. The ACCC says it is illegal to rely on policies or signs that deny consumer guarantee rights, such as 'no refunds' or 'no refunds on sale items'. You can say you do not offer change-of-mind refunds on sale items, as long as you make clear that consumers' rights for faulty items are unaffected.

Can we charge for return postage?

For change-of-mind returns you can set your own terms, including return shipping costs, if they are clear before purchase. For goods with a failure under the consumer guarantees, the business is generally responsible for reasonable costs of returning goods that cannot easily be returned. Get advice on your specific policy wording.

Should we build a custom returns portal?

Usually not at first. Ecommerce platforms and returns apps cover order lookup, reasons, labels and refunds well. Custom work makes sense for complex rules, such as warranty assessments, exchanges across channels, or integration with your own ERP and warehouse. Whatever you use, configure it so it does not deny consumer guarantee rights.

What should customers see while a return is processing?

Clear status at each step: request received, label created, parcel in transit, received, inspected, and refund or exchange issued, with expected timeframes. Send factual notifications at each stage. Most 'where is my refund' contacts come from missing status updates, not from slow processing.

Shopify & Ecommerce6 min read

Ecommerce Returns in Australia: Consumer Law, Returns Portals and a Better Customer Journey

How Australian online stores handle returns: consumer guarantees vs change of mind, clear policies, a returns portal, refunds, exchanges and status updates.

How should an Australian online store handle returns?

Separate two different things: consumer guarantee claims, which the law requires you to handle (faulty, not as described, not fit for purpose), and change-of-mind returns, which are optional but must be honoured if you offer them. Then make both easy: a clear policy, an order lookup that asks the right questions, the correct remedy, labels and drop-off options, status updates and prompt refunds. Policies cannot remove consumer guarantee rights.

This guide combines the legal, customer experience and engineering sides of returns for Australian ecommerce. For generic depth, see returns management, returns UX and reverse logistics. Nothing here is legal advice; check ACCC guidance and get advice on your policy.

Key takeaways

Consumer guarantees apply to online sales and cannot be excluded by your policy.
Change-of-mind returns are optional, but if offered, must be honoured as stated.
Never use blanket 'no refunds' wording; it is misleading under the ACL.
Design the portal to route faults and change of mind differently.
Show status at every step; most return contacts are status questions.
Integrate returns with inventory, refunds and accounting so records match.

The legal basics, in plain terms

Situation	What applies	Who chooses the remedy
Major failure (unsafe, significantly not as described, would not have bought it)	Consumer guarantees	The customer: refund or replacement, plus possible compensation
Minor failure (can be fixed in a reasonable time)	Consumer guarantees	The business: repair, replace or refund
Change of mind	Your store policy, if any	As your policy states
Misuse or a fault the customer knew about	Generally not covered	—

Worth noting

The ACCC says businesses must not rely on policies such as 'no refunds' or 'no refunds or exchanges on sale items' that deny these rights, and that a business may assess the product before providing a remedy (ACCC). Manufacturer warranties are in addition to these rights.

Writing a clear returns policy

State that consumer guarantee rights apply in addition to the policy.
Explain change-of-mind terms, if offered: timeframe, condition, exclusions, who pays postage.
Explain how to report a fault, what evidence helps (photos, order number), and how long assessment takes.
Explain refund method and timing, including for buy now pay later and gift cards.
Use plain language, link the policy near the add-to-cart button and in confirmation emails.
Review wording with a lawyer.

Designing the returns portal

A good portal guides the customer to the right path in a few steps:

Returns portal flow

Find order   -> email + order number, or account
Choose items -> quantities, eligible items shown
Reason       -> fault / not as described /
                wrong item / change of mind
Fault path   -> photos, description, assessment,
                remedy per consumer guarantees
Change mind  -> policy terms, exchange or refund
Return       -> label, Parcel Locker or post office,
                or store drop-off
Track        -> received, inspected, refunded

Customer journey and accessibility

Keep the flow short, explain each step, and show costs (if any) before the customer commits. Offer exchanges as easily as refunds. Make the portal accessible: labelled fields, keyboard access, clear error messages and readable status pages, in line with WCAG 2.2; see digital forms development. Delivery and returns convenience matter to Australian shoppers: Australia Post's eCommerce Report 2026 found 69% prefer a wide range of delivery options including out-of-home collection and returns.

Status updates and notifications

Send a factual message at each stage: request received with instructions, label created, parcel received, assessment result, and refund or exchange issued with timing. Factual transactional messages are treated differently from marketing under the Spam Act; keep promotions out of them.

Integrations

Ecommerce platform: orders, refunds, exchanges and store credit.
Carriers: return labels and tracking, for example Australia Post, which also offers Parcel Locker returns.
Inventory and warehouse: expected returns, receiving, grading and restocking; see inventory management software.
Payments: refunds to the original method, including BNPL providers.
Accounting: refunds, credit notes and GST adjustments posted correctly.
Support desk: return status visible to agents.

Operational trade-offs

Generous change-of-mind policies can build trust but increase costs and fraud; tighter ones reduce cost but may lose sales. Decide with data: return rates by product and reason, cost per return, and repeat purchase rates. Reduce avoidable returns at the source with accurate product descriptions, sizing information and photos, which also reduces 'not as described' claims under consumer law. See ecommerce conversion optimisation in Australia.

Common mistakes

'No refunds on sale items' or similar blanket wording.
Treating faults as change of mind, with fees or deadlines that do not apply.
No status updates, leading to support contacts and chargebacks.
Refunds issued in one system but not reflected in inventory or accounting.
A portal that is hard to use on a phone or with assistive technology.

Sources

ACCC, repair, replace, refund, cancel; WA Consumer Protection, returns; Australia Post eCommerce Report 2026; ACMA, avoid sending spam.

Consumer law points were confirmed via search summaries of ACCC and state regulator material. The flow, tables and checklists are ours. Nothing here is legal advice or ZSpace client data.

Conclusion

Returns in Australia start with the law: consumer guarantees for failures, your own policy for change of mind, and no wording that denies customers' rights. Build a portal that routes each case correctly, keeps customers informed and connects to inventory, payments and accounts, and use returns data to prevent the next return. For product registration and warranty claims, see warranty management software.

Improving your returns experience?

ZSpace Labs is an India-based, remote-first technology studio working with Australian and international businesses on Shopify returns flows, custom returns portals and integrations and returns UX. If it would help to review your flow, we are happy to talk it through.

Start a Project

FAQ

Common questions.

For faulty goods, goods that do not match their description, or goods that are not fit for purpose, yes: the consumer guarantees under the Australian Consumer Law apply to online sales and cannot be excluded. Stores are not required to accept change-of-mind returns, but if they offer a change-of-mind policy, they must honour it. This is general information, not legal advice.