Money Matters: The problem with 'no refund on sale item' signs

Every week we will break down, debunk and demystify your rights as a shopper in Australia. This week we are looking at what the 'no refund' sign exactly means.

We all know life is getting more expensive than ever before, and how important it is to stretch every dollar you make.

That's why each week we'll answer a question surrounding what shoppers are – and aren't entitled to when dealing with retailers and manufacturers.

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'NO REFUND' SIGN CONUNDRUM

I recently attended a discount warehouse sale of a major fashion brand that was selling all the leftover stock it had really cheaply in a temporary hall. At the checkouts they had a sign that said "no refunds allowed on sale items" as the sale is temporary.

I was wondering, are they allowed to do that?

The answer is a very simple no.

Signs saying "no refund" or "no refunds on sale items" are unlawful.

According to the Australian Competition and Consumer Commission (the country's main consumer watchdog), these signs are illegal because they imply that it's not possible to get a refund under any circumstances.

Under Australian Consumer Law, when you buy a product or a service you are covered with an automatic guarantee that the product or service will work and will do what you asked for.

Retailers don't have to give you a refund or exchange if you change your mind. That's because they sold you a product that worked and was what you asked for.

But if the product is faulty, a retailer cannot refuse to give you a refund, repair or replacement just because they printed out a sign.

To use a quick example – say you bought a jacket from this discount warehouse sale. But when you get home, you find the zip is broken.

This fundamentally means the jacket is faulty and you have the right as a consumer to a repair, refund or replacement.

The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.