Refund & Returns Calculator

Refunds and returns under Australian Consumer Law

Australian Consumer Law (ACL) provides strong protections for consumers when products fail to meet consumer guarantees - including being of acceptable quality, matching their description, and being fit for purpose. When a product fails to meet these guarantees, the consumer is entitled to a remedy, which may be a repair, replacement, or refund depending on the severity of the failure.

For major failures, the consumer can choose between a refund and a replacement. For minor failures, the business can choose which remedy to offer. Restocking fees are generally only applicable to change-of-mind returns, which businesses are not legally required to accept under ACL. However, many retailers offer change-of-mind return policies as a competitive advantage, often with conditions such as restocking fees, time limits, and requirements that items be in original condition.

How to use this refund and returns calculator

1. Enter the original purchase price (GST-inclusive or exclusive) and select whether GST applies to the transaction.
2. Choose the return type: full refund, partial refund with restocking fee, or exchange with price difference.
3. If applicable, enter the restocking fee percentage (typically 10-25% for change-of-mind returns) and any shipping cost adjustments.
4. Review the net refund amount, GST adjustment, and the credit note value to issue to the customer.

ACCC rules and GST adjustments on refunds

The ACCC enforces consumer guarantee rights and has penalised businesses for misleading refund policies - including "no refund" signs, which are illegal under the ACL regardless of what is printed on receipts. When a refund is issued, the business must issue a credit note or adjustment note and reduce the GST it has collected for that BAS period. The GST component of the refund is 1/11th of the GST-inclusive refund amount. Businesses must lodge these adjustments in the BAS period the refund occurs, not the period of the original sale. Failing to issue adjustment notes can result in overstated GST liabilities and ATO compliance issues.

How AP automation helps manage refunds and credit notes

Supplier credit notes and refunds are often processed manually, leading to delays and errors in financial records. When a return is processed, the corresponding credit note from the supplier needs to be matched to the original invoice, coded correctly, and reflected in the ledger. AP automation ensures credit notes are captured and matched automatically, keeping your accounts payable balance accurate and your BAS lodgements correct.