Refund Policy is Important for your Business

Refund Policy – Because of the current crisis in health and the economy, people are very concerned about spending money. They are looking carefully at refund policies for online sales of products and services.

Are you selling online – products which require delivery, courses, memberships, programs, coaching or consulting service? Then you need a Refund Policy.

Is your Refund Policy up to date and working for you?

A good Refund Policy is so important or your business now more than ever. Why? Because customers are concerned even more about online scammers selling goods and services who do not deliver. Consumers are advised to read Refund Policies carefully AND to keep receipts and invoices as proof of purchase.

Service contracts, client agreements, or e-commerce policy contain refund provisions. If you don’t have a service contract, you must at the very least have a refund policy for the sale of your services and products that clearly outlines the conditions under which a customer or client can receive a refund.

Australian Consumer Laws state that a blanket NO REFUNDS POLICY is illegal.

An explanation of your Refund Policy is required.

To work out what you need to have in your Refund Policy you need to understand the rights that consumers have under Australian Consumer Law.

When Consumers buy products and services they come with automatic guarantees by the businesses that

the consumer will get what they paid for; and
the product will work and do what it is promised; and
the services will be delivered as described and promised.

Products must be of acceptable quality normally expected for the type of product and cost i.e

safe, lasting, with no faults or defect,
look acceptable
do all the things someone would normally expect them to do.
match descriptions made by the salesperson, on packaging and labels, and in promotions or advertising
match any demonstration model or sample you asked for
be fit for the purpose the business told you it would be fit for and for any purpose that you made known to the business before purchasing
come with full title and ownership
not carry any hidden debts or extra charges
come with undisturbed possession, so no one has a right to take the goods away or prevent you from using them
meet any extra promises made about performance, condition and quality, such as lifetime guarantees and money-back offers
have spare parts and repair facilities available for a reasonable time after purchase unless you were told otherwise.

Services must:

be provided with acceptable care and skill or technical knowledge and taking all necessary steps to avoid loss and damage
be fit for the purpose or give the results that you and the business had agreed to
be delivered within a reasonable time when there is no agreed end date.

Consumer guarantees on products and services also apply to:

bundled products and services
gifts with proof of purchase
sale items
online products and services bought from Australian businesses
second-hand products from businesses, taking into account age and condition.

If something isn’t right, then under Australian Consumer Law, consumers have a right to the following if they

Therefore your Policy should state the different circumstances under which your business will refund a purchase price or service fees, for example:

defect
damage
out of stock
non-delivery.

Other important inclusions in your Policy include

The exact procedure for a return or exchange?
Return packaging – does the customer need to use your packaging or can they use their own?
Proof of purchase – do they need to include the order slip or receipt?
Return and refund request time frame – is there a limited time frame in which a return or exchange can be completed?
Shipping of returned items – who pays for shipping — you or your customer?
Will you provide a shipping label, return packaging, or codes?
Costs – are any fees deducted from the refund?

Remember businesses do not have to give a refund for change of mind so ensure your Refund Policy reminds customer and clients that they must have a valid reason under Australian Consumer law to justify a request for a refund.

Tips to ensure your Refund Policy is effective

make sure you have a refund policy
keep your Refund Policy simple and uncomplicated
ensure that you provide enough information in your Policy for customers and clients to make an informed decision to purchase from you in the first place
keep time limitations in your Policy reasonable
your Policy should be easily available
understand your Refund Policy
honour your Policy
offer alternatives in your Refund Policy i.e replacement, similar item, a discount for a future purchase, repair of the item
don’t complicate the process for the consumer – make it effortless and process online where possible.

Book in a Power Consultation with Shalini and get answers tailored to your business.