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The consumer laws in NSW and most other states are very clear about the rights of consumers to obtain refunds for defective or shoddy products, however it seems that many business operators still do not understand their legal obligations to consumers.


You have certain rights when buying goods and services, but you are obviously restricted by the motive behind your demand for a refund. If you simply change your mind and want to return the goods, the seller does not have to give you a refund. Businesses that willingly refund customers who return faulty goods build up goodwill and a loyal client base. However, as a consumer it can be difficult to know exactly what your refund rights are and how to exercise them.


Simply, a refund would be in order if the goods:

Remember: you cannot ask for a cash refund if you did not pay cash. You might only be entitled to a part refund if the goods have been used or the goods were bought on terms.


'No refunds' signs are illegal and business owners who display any sort of sign that infers that purchasers do not have the right to a refund can be prosecuted by law. If you buy a faulty product and you were not aware of the fault at the time of the sale, you can usually return it to the store and legally expect either:

If you see a 'No Refund' sign in a store, you should politely point out to the manager that displaying this is highly illegal and that it should be removed. If the store manager becomes rude or abusive, then state that you will be reporting the store to the NSW Department of Fair Trading and they will take action by imposing substantial fines.


If you simply change your mind and want to return the goods, the seller does not have to accept the goods back and give a refund. If the seller is prepared to exchange or give you a credit note, it is an expression of goodwill.

You have certain obligations as a customer. If you buy faulty merchandise and want a refund, you should:


A trader does not have to provide a refund if:


In Australia, all new goods are covered by a statutory warranty under the federal Trade Practices Act. Regardless of any manufacturer warranty that may offer longer or shorter protection, the statutory warranty is always in force. Buyers do not even have to register the purchase of new items with the manufacturers as some warranty cards demand, but new goods are always covered by the statutory warranty. Most warranty cards will acknowledge this with wording such as:


Unfortunately, sellers of certain products seem to think that they are somehow exempt from complying with statutory warranties. For instance, many new car dealers are under the impression that if they sell a lemon and keep repairing it, then they somehow are indemnified against any demands for a refund or a replacement of the vehicle. This is completely untrue. The problem is that most car buyers really don't know their consumer rights and will swallow the rubbish that new car dealers spin them about not being able to get a refund for the defective bombs that are sold to them.

Regardless of any extended manufacturer warranties, motor vehicles are covered by the same minimum statutory warranties that apply to all new goods. If you buy a car and it has a recurring fault that cannot be fixed after a reasonable number of attempts, then you are legally entitled to demand a refund or a replacement of the defective vehicle - and it is your choice, not the dealer's. Don't settle for any less and always set a target for a successful repair and stick to it religiously.

For instance, if the same fault cannot be rectified after two attempts, then you should demand a refund or even a new car, but don't keep giving the car dealer more chances - stand your ground. If you allow the car dealer to continue to make unsuccessful attempts to repair a lemon, this will only cost you money and inconvenience until the warranty runs out and then you will be stuck with the defective vehicle.


I had such an experience when in 1998 I purchased a brand new top-of-the-range Holden Berlina station wagon that had a defective automatic gearbox that was discovered at around 16,000km of driving. After the dealer made more than six unsuccessful attempts at fixing the problem, I told him that I could not keep disrupting my life and my business by putting my car in for repairs every few weeks and by all definitions, it was a lemon by having a recurring problem that could not be rectified. I said to him that the consumer laws were very specific about full replacements or refunds with such defective goods.

The dealer, who was one of the biggest Holden new car sellers in Australia, literally laughed in my face and told me that as far as he was concerned, he had no obligation to replace the vehicle as long as he offered to repair it. He stated quite erroneously that cars were not in the same category as other goods and had different warranty requirements, which obviously displayed his complete lack of knowledge of the state's consumer laws. From my research, I discovered that this was the prevalent attitude of new car dealers, that they would do anything to avoid taking back a lemon and replacing it with a new vehicle, no matter what.

From the dealer's attitude, I could see only one way to resolve the problem and that was by the threat of legal action. So to lay the paper trail for a possible court case in the future, I wrote a polite letter to the dealer, detailing the number of unsuccessful repairs to my car's gearbox, quoting the NSW consumer warranty laws and his legal obligation to offer me a full refund if I chose this option. The reply I received was much the same as the verbal response, that under no circumstance would the car dealer give me a refund or a replacement car, even though he had failed to repair the same problem more than six times.

I could see that I had to play hardball, so I replied to the dealer in writing, continuing to lay the legal paper trail. I enclosed a draft Supreme Court Statement of Claim, telling him that I had every legal ground to sue him for the entire cost of the defective vehicle, plus the waste of time and loss of business I had suffered by constantly having to take my car to him for unsatisfactory repairs and for unspecified monetary damages for my inconvenience and anguish. I attached the copies of reports of the unsuccessful repairs and told the dealer that this would be prima facie evidence of his failure to rectify the problem.

I also enclosed an extract of the then NSW consumer laws (now federal laws) to show him that just because he didn't understand the law did not mean that he did not have to comply with it. I told him that he had a legal obligation to give me a refund, whether the product was a defective car or a defective toaster and I advised him to show this and the Statement of Claim to his solicitor.

To be able to demonstrate to a judge in any ensuing court case that I was bending over backwards to be fair, I offered the car dealer one more shot at fixing the gearbox problem and if it was unsuccessful, the next thing he would see would be a Supreme Court summons and there was no way on earth I could lose such a case, considering the mountain of hard evidence in my possession and the fact that I had the NSW consumer laws on my side.

This strategy finally convinced the car dealer that I was deadly serious and that not only would I get a brand new car plus substantial damages from suing him, but I would set a very strong legal precedent for anybody else who found themselves in this situation and wanted to sue him.

In any event, the car dealer arranged for an engineer from the Holden factory in Melbourne to fly to Sydney to examine my car and exchange the defective gearbox with a hand-built custom engineered gearbox. I warned the dealer that this was his very last chance and that if it failed, I would either receive a full refund from him forthwith or I would see him in court. Luckily for him, the replacement gearbox was faultless and had operated without problem until I sold the car in 2012.

However, this experience taught me a huge lesson, which was - don't waste your valuable time and resources by being fobbed off by a trader who thinks he can just keep you dangling on a string forever. If a product is repaired and the same fault occurs another two times, go to the trader and demand a full refund and don't accept any further repair offers or excuses.

It does not matter whether the item is a car or a kettle - the statutory warranty is the same on all new products. If the trader refuses to give you a full refund on the spot, then instantly lodge an official complaint with the relevant authority and if it is a very expensive item such as a car, drag the trader to court as well and sue him for everything that you should be entitled to receive as compensation.


Don't be fooled or intimidated by traders who refuse to give refunds or arrange for repairs or replacements when required to do so. One common ploy that many traders use is that they will refuse to accept defective goods for repair or replacement, but demand that the purchasers deal directly with the manufacturers. The consumer law specifically states that a trader is completely responsible for arranging such matters and the only place a consumer has to return defective goods is to the point of sale and nowhere else.


If a trader refuses to comply with his legal obligations to refund you the purchase price, repair or replace the defective goods or tries to send you elsewhere to have the goods fixed, then you have legal resources at your disposal to resolve the problem. Inform the trader that you don't have to go anywhere else to get the goods repaired or replaced and if a refund is appropriate, you are the party who decides whether to demand a refund or replacement, not the retailer. You have the law on your side and you should invoke it where necessary.


If you have purchased defective goods, the one thing that is most important to do is to act immediately to get the problem fixed to your satisfaction. If you take the defective goods back to the store and really want a refund, don't let the store talk you into accepting replacement goods instead of the refund you seek. However, if you decide to accept a replacement item for the defective goods, inform the store that if the replacement item is also defective, you will not accept another one, but will demand a full refund and nothing less. Do not ever let the trader fob you off with any excuses. To make enquiries or to lodge complaints contact the appropriate authority that administers and enforces the consumer laws in that state.