Writing a returns policy that complies with Australian Consumer Law (and setting it up in Shopify)

Every returns policy in Australia deals with two different situations. The first is a customer who has changed their mind. The second is a customer who has received something faulty or not as described. The law treats them very differently, and a policy that mixes them up is the most common mistake we see.

• Change of mind: the customer got what they ordered and no longer wants it. You decide whether to accept returns, for how long, and in what form.
• Faults and problems: the product is faulty, does not match the description or is not fit for purpose. Consumer guarantees under the Australian Consumer Law apply, and you cannot contract out of them.

Consumer guarantees

Under the Australian Consumer Law, goods you sell come with consumer guarantees, such as being of acceptable quality and matching their description. The ACCC says these guarantees apply to all purchases and cannot be removed or reduced by a business's terms and conditions. That includes sale items and online orders.

Major and minor problems

The remedy depends on how serious the problem is. For a major failure, the customer can choose a refund or a replacement. For a minor problem, the business can choose to repair, replace or refund, and must do so within a reasonable time. The ACCC also notes that whether a problem is major depends on the circumstances, and that several minor problems with the same item can add up to a major failure.

No refunds signs are unlawful

The ACCC says signs or policies that say no refunds, or no refunds on sale items, are unlawful, because they suggest the customer has no right to a remedy even when the goods are faulty. A policy that says no refunds for change of mind is permitted. The same logic covers a banner on your site, a line in your terms and a checkout notice. Wording like no refunds after 14 days is also a problem when applied to faults, because you cannot cut short the period in which consumer guarantee rights apply.

The ACCC has also looked at online returns. It has published the results of a sweep of online shopping return policies and terms and conditions, which is worth reading if you want to see the wording regulators object to.

A good returns page is short, written in plain English, and split into the two kinds of return. Put the consumer-law section first, because it is the part you cannot change. Then set out your own change-of-mind rules.

1. Step 1

   State the consumer guarantee up front

   Say plainly that your goods come with guarantees under the Australian Consumer Law that cannot be excluded, and that the customer is entitled to a replacement or refund for a major failure and to a repair, replacement or refund for a minor one. Use the wording in the ACCC's guidance for businesses, or have a lawyer draft it.

2. Step 2

   Explain how to report a fault

   Give an email address and a form. Ask for the order number and a photo. Say you will reply within a set number of business days, and commit only to what you will do.

3. Step 3

   Say who pays for returns of faulty goods

   Our advice is that a customer with a faulty item should not have to carry the cost of sending it back. Say that you will cover reasonable postage or provide a prepaid label, and check the ACCC guidance if a claim is large.

4. Step 4

   Set your change-of-mind terms

   Choose a window, such as 30 days from delivery. Say the item must be unused, in original packaging and with proof of purchase. State whether you refund to the original payment method, give a store credit or offer an exchange.

5. Step 5

   List exceptions honestly

   You can exclude change-of-mind returns on hygiene items, personalised goods or final sale items. Word each exception as a change-of-mind rule, and add that it does not affect rights for faulty goods.

6. Step 6

   Cover shipping and timing

   Say who pays return postage for change of mind, where to send the parcel, and how long refunds take once you receive it.

Wording to avoid

• No refunds.
• Sale items are final.
• Exchange or store credit only (without a note that this applies to change of mind).
• Returns must be requested within 7 days, as a blanket rule covering faults.
• We are not responsible for faults after delivery.

Shopify has a return rules feature that sits behind your written policy. In your admin, go to Settings, then Policies, and open Return and cancellation rules. Return rules cover fulfilled items and cancellation rules cover unfulfilled items.

• Return window: choose 14, 30 or 90 days, unlimited, or a custom number of days. You can start the clock from each item's delivery date or from delivery of the last item in the order.
• Window overrides: give particular collections, products or variants a longer or shorter window. If an item falls under more than one override, the shortest applies.
• Return shipping: offer free return shipping, charge a flat rate once per return, or have customers buy their own label.
• Restocking fee: set a percentage that is shown to customers when they request a return. Shopify does not deduct it automatically, so you must deduct it when you create the refund.
• Final sale: exclude specific products or collections. Customers cannot request a return or cancellation for those items through Shopify.

Self-serve returns let customers request a return themselves. You turn it on under Settings, then Customer accounts, in the Self-serve returns section. It does not work with classic customer accounts, and exchanges cannot be requested through it. Rules apply when an order is placed, so changes affect only future orders.

Shopify can also write your return and refund policy from your rules, so it updates when they change, or you can write it yourself and keep it current. Once added, the policy appears in your checkout footer. If you write your own, as we recommend for Australian stores, paste in the consumer guarantee wording and make sure the numbers match your rules. A mismatch between the page and the settings is a common source of arguments.

Your returns page is a trust signal and a search asset. Google Merchant Center asks for a return policy for free listings and checks it against your site, so keep them matching. See our SEO checklist. It also protects you in disputes. When a customer files a chargeback, the bank will look at what your policy said on the day of the order, which we cover in our payments guide.

If you sell regulated goods such as alcohol or items with extra safety rules, add the relevant notes to the same page. Our alcohol guide shows an example. Every package we build includes the policy pages, and our Care plan can handle updates when your terms change. See also our Shopify support service.