With Christmas sales strong this year, it is time for a refresh on how to manage customers wanting to return or exchange unwanted gifts.

The starting point is that you need to honour any terms of sale you have published. For example, if you offer 30 day returns/exchanges for any reason – then you must follow your own policy. However, keep in mind that your policy must be equal or greater to the rights customers have under the Australian Consumer Law.

If you don’t publish a returns policy, then you need to follow the Australian Consumer Law guarantees. It is important you ensure your team are up-to-date with the Consumer Guarantees as there are strict penalties for not complying.

Here’s a summary of some of the key issues:

• You can ask for proof of purchase. If the customer can’t provide a valid receipt or other way of proving the item came from your business (and that they paid for it), you can decline a refund/return.
• Unless your Returns Policy allows ‘change of mind’ returns, the Australian Consumer Law doesn’t require you to assist a customer who has simply changed their mind.
• Gift recipients have the same legal rights as the purchasing customer – provided they have proof of purchase.
• The Australian Consumer Law provides rights and remedies where an item is defective – you can’t avoid those rights.
• If an item is majorly defective, a consumer (or gift recipient) can obtain a refund or replacement (their choice). For minor defects, you can chose to repair, replace or refund the consumer (your choice).
• Signs stating ‘No Refunds’ or ‘No Returns’ without qualifications are illegal.
• Just because your Returns Policy contains time limits for returns, does not mean you can restrict customers with defective products to your timeframes. The Law will determine an appropriate return window by how long the item should last – by reference to its price, usage etc.

Retailers who don’t have an up-to-date Returns Policy are encouraged to implement one and ensure all staff are trained on the Consumer Guarantees – which apply to all industries.

ARA Member’s free 30 minute consultation with the ARA’s legal partner, Hitch Advisory can also be used to discuss your Consumer Law queries.