Australian Consumer Law · Rights and obligations

Consumer guarantees: rights, remedies and business obligations

Consumer guarantees are automatic. They do not disappear when a warranty expires, and the correct remedy depends on the product or service, the problem and whether the failure is major.

1 September 2026 · General information

Why this matters now

Consumer guarantee compliance is an operational issue, not only a returns-policy issue.

Reports to the ACCC about consumer guarantees increased by 20% to more than 38,000 in 2025. Around 70% of people who contacted the ACCC about an electronic product or whitegood raised consumer guarantee issues. The ACCC has continued consumer guarantees as a compliance and enforcement priority for 2026–27, with a particular focus on motor vehicles.

A compliant policy will not protect a business if store, call-centre, ecommerce, warranty and service teams give the wrong answer. The legal outcome depends on the facts: what was supplied, what the consumer was told, what went wrong, whether the problem can be remedied and how the business responds.

The practical test

Can the business identify a consumer guarantee failure, distinguish a major failure from a non-major failure, provide the correct remedy and keep a defensible record of the decision?

The legal foundation

Consumer guarantees apply automatically and cannot be signed away.

The Australian Consumer Law gives consumers automatic guarantees when they acquire goods or services. They operate independently of a business’s returns policy, manufacturer’s warranty, extended warranty or care plan.

A contract term, sign or staff script cannot lawfully remove these rights. Statements such as ‘no refunds’, ‘sale items cannot be returned’, ‘claims must be made within 10 days’ or ‘contact the manufacturer’ can mislead consumers when they suggest that statutory rights do not apply.

Consumer guarantees also do not have a single fixed expiry date. Whether a product is sufficiently durable, or a service remains covered, depends on what a reasonable consumer would expect in the circumstances. Relevant considerations can include the nature and price of the item, how it was represented, its age and condition, expected use and maintenance, and the kind of problem that developed.

Who and what is covered

A ‘consumer’ can be an individual or a business.

Consumer guarantees generally apply where goods or services are supplied in trade or commerce and at least one of these tests is met:

the price is no more than A$100,000, including GST;
the goods or services are of a kind ordinarily acquired for personal, domestic or household use or consumption, regardless of price; or
the goods are a vehicle or trailer acquired mainly to transport goods on public roads.

This means a business purchasing equipment or services can sometimes be a consumer under the ACL. However, goods acquired for resupply, or to be used up or transformed in production, manufacture, repair or treatment of other goods, are generally excluded.

Special rules or exclusions can apply to private sales, traditional auctions, financial products, insurance, services used to transport or store business goods, and some professional services supplied by qualified architects or engineers. Hiring, leasing, bundled goods and services, second-hand goods and overseas sellers can also require closer analysis.

Products and goods

Products must meet more than one guarantee.

Depending on the transaction, a consumer is entitled to expect that a product:

is of acceptable quality — including being safe, durable, free from defects, acceptable in appearance and finish, and fit for the purposes for which goods of that kind are commonly supplied;
is fit for a disclosed purpose — where the consumer makes a particular purpose known and reasonably relies on the supplier’s or manufacturer’s skill or judgement;
matches its description and any sample or demonstration model;
comes with proper title and undisturbed possession, without undisclosed securities, charges or encumbrances;
has reasonably available repairs and spare parts because the manufacturer must take reasonable action to keep them available for a reasonable period, unless the manufacturer took reasonable action to ensure the consumer received written notice, at or before agreement, that availability would be limited; and
meets any express warranty made by the supplier or manufacturer about quality, performance, characteristics or what the product can do.

Acceptable quality is contextual. A low-priced second-hand product is not judged as though it were a premium new product, but it must still meet the standard a reasonable consumer would regard as acceptable after taking account of its disclosed condition, price and other relevant circumstances.

Services

Services must be competently delivered and produce what was reasonably promised.

Services covered by the ACL must:

be provided with due care and skill;
be reasonably fit for a purpose the consumer made known to the supplier;
be reasonably capable of achieving a result the consumer made known to the supplier; and
be supplied within a reasonable time where the contract does not set a time or a method for determining it.

The fit-for-purpose and desired-result guarantees depend on what was communicated and whether reliance on the supplier was reasonable. Businesses should therefore record the customer’s stated purpose, the advice given, any limitations explained and any agreed result.

Repair, replace, refund or cancel

The remedy pathway turns on whether the failure is major.

When a product failure is major

A product failure can be major where:

a reasonable consumer would not have bought the product if they had known the nature and extent of the problem;
the product differs significantly from its description, sample or demonstration model;
it is substantially unfit for its normal purpose, or a disclosed purpose, and cannot easily be made fit within a reasonable time;
it is unsafe; or
two or more failures, considered together, would have stopped a reasonable consumer buying the product.

The consumer can generally reject the product and choose a refund or replacement of the same type. Alternatively, the consumer can keep it and seek compensation for the reduction in value. A refund following rejection should be for the full amount paid, without a deduction for the consumer’s use, and should ordinarily be made using the original payment method unless the parties agree otherwise.

The right to reject is subject to section 262 of the ACL. Rejection is unavailable once the statutory rejection period has ended, or in certain cases where the goods have been lost, destroyed, disposed of, independently damaged, or attached or incorporated so they cannot be removed without damage. The rejection period is not an arbitrary store deadline: it is the period within which the relevant failure would reasonably be expected to become apparent, having regard to the type of goods, their likely use, expected useful life and reasonable amount of use. If rejection is unavailable, other remedies may still remain, including compensation for reduced value and reasonably foreseeable loss.

When a service failure is major

A service failure can be major where a reasonable consumer would not have acquired the service if fully aware of the problem, the service is substantially unfit for its normal or disclosed purpose and cannot easily be fixed within a reasonable time, it cannot achieve a disclosed result and cannot easily be fixed, or it creates an unsafe situation.

The consumer can terminate the contract and obtain an appropriate refund for the part not properly supplied, or keep the contract and seek compensation for the reduction in value.

When the failure can be remedied and is not major

The supplier must remedy the problem free of charge and within a reasonable time. For goods, the supplier generally controls the initial remedy and may repair, replace or refund. For services, the supplier must rectify the failure, which may require performing the service again.

If the supplier refuses, cannot act or takes too long, the consumer may be entitled to have the problem fixed elsewhere and recover reasonable costs, reject the goods subject to the statutory rejection rules, terminate the service contract or seek another remedy available under the ACL.

Compensation can be additional

A repair, replacement, refund or cancellation may not be the end of the claim. A consumer can also recover loss or damage caused by the failure where that loss was reasonably foreseeable. A business should assess the causal link, available evidence, foreseeability and whether the consumer took reasonable steps to limit the loss.

Business obligations in practice

The seller must own the customer outcome.

Accept and assess the claim. A business may reasonably assess the product or service before deciding the remedy, but assessment should not become an indefinite delay or a barrier unsupported by the facts.
Do not redirect responsibility. Except for a claim specifically about the manufacturer’s failure to keep repair facilities or spare parts reasonably available, the supplier that sold the product must not require the consumer to pursue the manufacturer or importer. Internal supplier arrangements should operate behind the customer-facing remedy process.
Request reasonable proof, not one document only. A receipt can be requested, but card statements, order records, reference numbers, warranty records or database-linked serial numbers may also establish the purchase.
Do not require original packaging. Consumer remedies can be pursued without it.
Manage return costs correctly. Consumers generally return products that can be posted or easily carried. If a confirmed problem exists, the business must reimburse reasonable return costs. The business must collect large, heavy, installed or difficult-to-return faulty products at its expense within a reasonable time.
Give repair notices before accepting relevant goods for repair. Written notice is required where a repair may cause loss of user data or may use refurbished goods or parts. A sign or website link alone is not enough.
Keep warranties additional. A warranty against defects must contain the required information and mandatory ACL text. Extended warranties must provide something additional and must not be sold by misrepresenting the automatic rights already available.
Escalate safety issues. Where goods fail the acceptable-quality guarantee because they are unsafe, the ACL treats that as a major failure. A safety issue can also trigger product-safety, incident-reporting, stop-sale, recall and regulator-notification considerations.

Supplier indemnification

Where a manufacturer is responsible for certain failures, including acceptable quality, manufacturer-applied descriptions or a purpose made known to the manufacturer, the supplier may have a statutory right to reimbursement for remedy costs. That commercial recovery should not delay the consumer’s outcome. Suppliers generally have three years to pursue the manufacturer, calculated from the earlier statutory trigger.

When a consumer makes a claim

Clear information helps the right remedy be identified sooner.

The ACL does not create a broad set of matching ‘consumer obligations’ equivalent to the supplier’s guarantees. However, a consumer making a claim should be prepared to:

identify the product or service, supplier, approximate purchase date and price;
provide reasonable proof of purchase;
explain the problem, when it appeared, how the item was used and the remedy sought;
make the product available for a reasonable assessment and return an item that can be easily returned;
stop using an item that may be unsafe and preserve relevant photographs, correspondence, reports and receipts; and
take reasonable steps to avoid increasing any loss or damage.

These practical steps do not allow a business to invent extra conditions that remove statutory rights. If the matter remains unresolved, the consumer may contact the relevant state or territory consumer protection agency and consider the applicable court or tribunal pathway. The ACCC uses reports to inform compliance and enforcement work but does not determine individual consumer disputes.

Current law and proposed reform

Do not apply proposed consumer guarantee reforms as though they are already law.

Consumer Affairs Ministers have agreed to strengthen the consumer guarantees and supplier indemnification framework. The published reform direction includes stronger prohibitions and penalties, changes to supplier indemnification, a recommended 30-day evidentiary presumption for early product failures and a proposed principles-based approach to depreciation in some refunds.

Those reform proposals are not the current consumer guarantee rules stated in this article. In particular, there is not presently a general 30-day automatic-refund rule. The existing major-failure and non-major-failure tests still determine the remedy. Businesses should monitor the legislation and commencement arrangements, update their systems once the final law is known and avoid pre-emptively reducing existing rights.

Turn the law into a working system

Eight controls for a stronger consumer guarantees process.

Map coverage. Identify consumer sales, qualifying business purchases, exclusions, bundled supplies and higher-risk product or service categories.
Build a triage tool. Prompt staff to capture the guarantee, facts, safety risk, repeated failures, repairability, severity and requested remedy.
Set decision authority. Give frontline teams clear authority limits and fast escalation routes for major failures, safety issues, high-value claims and consequential loss.
Remove unlawful scripts. Test websites, receipts, signs, chatbots, call scripts, emails and warranty documents for time limits, ‘no refund’ statements and manufacturer redirection.
Control the assessment clock. Record receipt, inspection, parts, repair, customer contact and decision dates so ‘reasonable time’ can be monitored rather than assumed.
Connect suppliers and manufacturers. Maintain evidence and claim processes for reimbursement without making customers wait for commercial allocation of responsibility.
Feed complaints into product and service governance. Repeated faults, repair failures and safety signals should trigger root-cause analysis, stop-sale, supplier review or recall assessment where appropriate.
Test real cases. Sample decisions across stores, ecommerce, call centres, repair networks and brands to confirm that the policy is producing lawful outcomes in practice.

Frequently asked questions

Common consumer guarantee questions.

Do consumer guarantee rights end when a warranty expires?

No. Consumer guarantees are automatic and separate from voluntary, manufacturer and extended warranties. The legal test depends on what it was reasonable to expect from the product or service in the circumstances, not only on the written warranty period.

Can a business refuse a faulty-product claim without the original receipt or packaging?

A business can ask for reasonable proof that the product was bought from it, but a receipt is not the only acceptable evidence. A consumer may use a card statement, order reference, warranty record or other evidence that reasonably demonstrates the purchase. A product does not need to be in its original packaging.

Who chooses the remedy for a faulty product?

For a major failure, the consumer can generally choose a refund or replacement, or keep the product and seek compensation for its reduced value. For a failure that can be remedied and is not major, the supplier generally chooses how to remedy it, but must act free of charge and within a reasonable time.

Can the retailer send the consumer to the manufacturer?

Generally, the seller is responsible for resolving a valid claim about a product it supplied and must not require the consumer to deal with the manufacturer. A narrow exception applies where the problem is specifically that the manufacturer has not kept repair facilities or spare parts reasonably available. The seller may separately have a right to reimbursement from the manufacturer.

Do consumer guarantees apply to sale, clearance or second-hand goods?

They can. Price, age, condition and any defect specifically drawn to the consumer’s attention before they agreed to the supply affect what a reasonable consumer would regard as acceptable. A known, properly disclosed defect may not support a claim about that defect, but other undisclosed problems can still be covered.

Does the Australian Consumer Law require a change-of-mind refund?

Not generally. A consumer is not automatically entitled to a remedy merely because they changed their mind, found a lower price or no longer want the purchase. If a business offers a change-of-mind policy, it must apply that policy as represented.

Official sources

Review the current legislation and regulator guidance.

Practical support

Make the right outcome easier for customers and staff.

Watchdog can review returns policies, warranties, customer service scripts, remedy pathways and complaint decisions, then help translate the legal requirements into practical tools, authority levels and evidence records.

Consumer guarantees process review

Test the written policy and the live customer journey across stores, ecommerce, call centres, service teams and repair networks.

Discuss a consumer guarantees review →Explore consumer law support →

Important information

Check the current position and the specific transaction.

This update is general information, not legal advice. Consumer guarantee outcomes are fact-specific, and laws, official guidance and reform proposals can change. The position stated was checked against the primary sources available on 1 September 2026. Obtain advice for your circumstances before acting.