ACCC offer advice for SMEs on refunds and cancellations due to COVID-19

The Australian Competition and Consumer Commission (ACCC) has issued guidance directed to small businesses so they can fully understand their rights and obligations in managing refunds and cancellations because of COVID-19.

The guidance is not a new policy but is based on the present provisions under the Australian Consumer Law.

“We know a lot of small businesses are facing a very challenging time, but they still want to do the right thing by their customers,” ACCC Deputy Chair Mick Keogh said.

The ACCC prepared the guide in response to over 100 contacts the office received from small businesses about the impact of COVID-19 and their rights and obligations as a way to reduce confusion.

“At the same time as handling requests from their own customers, small businesses may also be customers themselves. We want to make sure they are aware of their rights when dealing with other businesses,” Keogh said.

The guide outlines small business rights and obligations relating to issues such as cancelled functions and events, pricing of goods and services, and charging subscription and membership fees when the business is not operating. Businesses are reminded that they must honour the terms and conditions of their contracts with customers.

The ACCC is also encouraging customers to be patient and to treat staff respectfully as businesses deal with these requests during these times.

“As a business, if you are unable to provide goods or services during this time, you have the opportunity to work with your customers to find a mutually agreeable alternative arrangement,” Keogh said. “This could include providing a partial refund, a credit note or voucher, or rescheduling to supply the services at a later date where this is possible.”

He added, “It is important for small business to understand their obligations when handling requests from consumers. Failure by any business to honour its cancellations or refunds policy may constitute misleading conduct under the Australian Consumer Law.”

The ACCC’s guidance for consumers may also be relevant for small business, which, under Australian Consumer Law, may be legally defined as consumers when engaging with other businesses.

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