What are my rights to a deposit refund?

You have made a deposit on an item or service in good faith but circumstances mean you can no longer go through with the sale. Are you entitled to a deposit refund under Australian Consumer Law?

We are given automatic consumer guarantees when we buy goods and services in Australia. These basic rights include:

• • The item be of acceptable quality
  • The item or service be fit for purpose
  • It matches sample or demonstration model
  • Spare parts and repairs are available for a reasonable time
  • Services are carried out with due care and skill, and within a reasonable time.

However, as you have not paid for an item or service in full, the circumstances are a little different when you make a deposit. Whether the business can legally keep your deposit will depend on several factors.

 

 

Getting a deposit back

A deposit is a commitment on your part that you will buy the good or service. You don’t have the items in your possession – buy now, pay later or interest-free deals are the same as buying an item outright – and the service may not have even started.

Changing your mind is generally not considered a good enough reason to get your deposit back. Nor does the fact that you spotted a better deal, for example, a day after you paid a deposit on a new fridge. It is likely under the terms and conditions of sale that your deposit is not refundable.

However, some businesses may let you cancel the order and refund the deposit or give you a store credit for the deposit amount instead, as a gesture of goodwill. It is always worth asking, even if the terms and conditions on their website say otherwise.

When it’s a deposit for something as substantial as a new car or house, cooling-off periods may apply, depending on where you live.

This is a legally pre-determined time, generally no more than three days after putting a deposit on a car and no more than five for a deposit on a house, in which you can back out. You may not get all the deposit back, but the cost will be minimised.

 

 

What if the business does the wrong thing?

If you have put down a deposit on a good or service and discover that it does not meet consumer guarantees, the ACL affords you protection. This includes if the business has engaged in unfair, misleading or deceptive conduct.

Businesses must be fair and transparent in their dealings with consumers. When you enter into a contract by paying a deposit, you should be made aware of your rights and responsibilities. The contract should be clear and free of jargon and not place an undue burden on either party.

Similarly, if a supplier or seller breaches the terms of a contract by failing to uphold their end of the agreement, you are entitled to a full refund of the deposit. This includes not delivering an item in the agreed time frame or not providing a service to an agreed standard. For example, if you paid the deposit on a photography session and a set of printed images and when you went to pick them up you discovered half were out of focus, this would be deemed unacceptable.

If you want to know more about your rights, visit the Australian Consumer and Competition Commission’s website. If you believe your right to a deposit has been unfairly dismissed, get in touch with us and we’ll help you handle it.