#76 IS IT LEGAL TO HAVE A 'NO REFUNDS' POLICY IN YOUR SALON? 🤷🏼♀️
You see signs all around and on social media many discussions about it saying “No Refunds” or “No refunds, exchange only” or “Don’t give her a refund”.
While these would be good for the business owner, Australia’s not built like that.
In fact, legally, shop owners selling physical products or delivering a service (like we are delivering lash extensions) HAVE to legally offer refunds in certain circumstances.
Let’s dig into it, and get the straight talk from the government, so you are not breaking any rules as a small business owner.
WHAT IS EXPECTED?
Let’s look at what is expected. It has to do with consumer guarantees. The product you are selling has to be safe, lasting and not faulty. It has to look acceptable, and do all the things you would normally expect it to do. If you bought a toaster that didn’t toast, you should get another one that works. Pretty straight-forward.
For a service, it legally has to be delivered within a reasonable time, be provided with acceptable care and skill, while taking all necessary steps to avoid damage, and it has to give the results agreed upon.
If you’re doing all of that, you shouldn’t have to give a refund, since everything is as expected and everyone is happy with the interaction.
WHAT IF THEY FOUND A CHEAPER OPTION ?
You don’t legally have to give a refund if the customer simply changes their mind, or found it cheaper somewhere else. If they misused the product or knew there was a problem before they bought it.
CONSUMER GUARANTEE
The consumer guarantee doesn’t apply if the customer wanted a service to be done in a certain way against the advice of the business. That customer that wants a D curl in a .25 all 16mm long, isn’t legally entitled to a refund, because you told her it’s unsafe.
This blog isn’t to re-type what the government already wrote, but to give a quick once-over and a summary. I highly recommend you go to the website yourself and get the info straight from the source:
https://www.accc.gov.au/consumers/consumer-rights-guarantees/repair-replace-refund
(Please note, there are slight differences from state to state, so check your state’s applicable laws)
ADVERTISING 'NO REFUND'...
When you’re putting your terms and conditions up on your website, or hanging signs in your salon, make sure you don’t put “No Refunds” or “No Refunds on Sale Items”, or “Non-refundable deposits”. They are illegal, since it implies that no refund is ever possible, even when there is a major problem.
DEPOSITS & CANCELLATIONS
We often take deposits for a lash appointment and commonly we’ll say it’s non-refundable. From what I can tell, the wording of this could get you in trouble. The government says that if you are paying something in 2 or more instalments (including deposits), its technically a lay-by. If there is a cancellation, all funds need to be refunded minus a termination fee.
So, the way I see it, your termination fee should be the same amount as the deposit.
COVER YO BUTT
Basically you’ve got to cover your own butt when it comes to running a business. For 97% of people, you never have to worry about it. But for those few Karens in the mix that just love to make a problem, best to be completely legal and transparent.
That’s my 2 cents.
IN SUMMARY
- Change your cancellation and deposit terms to read instead of ‘no-refunds’ or ‘deposit non-refundable’ to “cancellation within a _____ (name your time period) of an appointment is subject to termination fees.” It is important not to put anything about it not being non-refundable. Your termination fees can be the same amount as the deposit. It is just legally important to call it a termination fee.
- If a client complains about the lashes after the fact of her receiving the service. The customer legally has to get the provider (you) to fix it rather than demand a refund. To avoid all of these problems you need to have in place a consultation form which clearly outlines all these legal obligations i.e. that if the customer is not happy with the lashes they legally have to ask you to fix them first, not request a refund. Also on your consultation form you need to clearly have it lined out what you are going to do i.e. curl, length, thickness, length of the treatment time etc and have the client sign this before you begin. This will completely save you ANY problems on clients demanding refunds and legally protect you from it.
- At the end of the day we are in the people and service business. The customer is NOT always right, but they should ALWAYS be treated with respect and understanding. Typically a situation will resolve if you keep your own emotions out of it, and genuinely have a conversation about what is upsetting the customer. You’ve got policy there to protect yourself, but if sticking to your policy to rigidly means losing a customer, then that doesn’t make sense either. Follow the golden rule and treat others like you would like to be treated.
Boom! Now get out there and make all the chicks hotter.
XxX
