Understanding who is a “consumer” under the Australian Consumer Law (ACL) is essential if you sell goods or services in Australia. It shapes your obligations, the rights your customers have, and how you draft policies, contracts and marketing claims.
In this guide, we’ll explain the legal definition in plain English, highlight common examples, and outline what this means for your day-to-day compliance. By the end, you’ll know where your responsibilities begin and end so you can trade with confidence.
What Is The ACL And Why Does The Definition Matter?
The Australian Consumer Law (ACL) is the national law for fair trading and consumer protection. It sits in Schedule 2 of the Competition and Consumer Act 2010 (Cth) and applies across every state and territory.
Why does the definition of “consumer” matter? Because many of the ACL’s protections and remedies apply when your buyer is a consumer. If you misjudge that status, you could get your refunds policy, warranty wording or marketing claims wrong and run into disputes or penalties.
The ACL deals with things like misleading or deceptive conduct, unfair contract terms and consumer guarantees. These aren’t optional standards - they’re legal rules you must meet when dealing with consumers.
The Legal Definition: Section 3 ACL Explained
The starting point is section 3 of the ACL. It sets out when a person (which can be an individual or a business) is a consumer for a particular purchase.
Price Threshold
A person is a consumer if they acquire goods or services for $100,000 or less. This threshold was increased from $40,000 to $100,000 in 2021. The price threshold applies regardless of whether the buyer is purchasing for business or personal use.
“Ordinarily Acquired For Personal, Domestic Or Household Use”
Even if the price is higher than $100,000, a person is still a consumer if the goods or services are of a kind ordinarily acquired for personal, domestic or household use or consumption. Think fridges, couches, laptops, family cars, cleaning services and other everyday products and services.
Vehicles And Trailers For Transporting Goods
A person is also a consumer if they buy a vehicle or trailer primarily for transporting goods on public roads. There’s no price cap for this category either.
Important Exclusions
Section 3 also sets clear exclusions. A person will not be a consumer for a particular purchase if the goods were acquired:
- For re-supply (for example, a wholesaler buying stock to sell on);
- To use up or transform in the course of production or manufacture; or
- To use in repairing or treating other goods or fixtures on land.
These exclusions are specific. There isn’t a general “equipment” exclusion - so don’t assume that buying business equipment automatically sits outside the ACL. The real question is whether one of the statutory exclusions applies.
Who Counts As A Consumer? Practical Examples
- A family buys a $60,000 car for everyday use. The car is of a kind ordinarily acquired for personal use, so they are consumers (regardless of price).
- A small business buys a $90,000 commercial printer. The purchase is under $100,000 and not for re-supply or use up in manufacture, so the business is a consumer for that transaction.
- A café buys a $3,000 dishwasher to use in the kitchen. Because the price is under $100,000 and it’s not being re-supplied or transformed in production, the café is a consumer for that purchase.
- An auto parts distributor buys 2,000 brake pads to sell to mechanics. That is for re-supply, so they are not consumers for that purchase.
- A builder buys adhesive and sealants that are used up in construction. That falls into “use up or transform in production,” so the builder is not a consumer for that purchase.
- A logistics company purchases a trailer used mainly to transport goods on public roads. They are a consumer for that trailer, with no price limit.
The takeaway: many B2C and quite a few B2B transactions are caught by the ACL’s consumer definition. Always test the purchase against section 3 rather than relying on labels like “business” or “retail.”
What Rights Flow From Being A Consumer?
Once a purchaser qualifies as a consumer for a transaction, a suite of ACL protections apply automatically. Your business must meet these obligations - you can’t contract out of them.
Consumer Guarantees
Goods must be of acceptable quality, fit for disclosed purpose, match description or sample, and come with reasonable repair facilities and spare parts. Services must be provided with due care and skill, be fit for purpose, and supplied within a reasonable time if no time is set.
If you provide written “warranty against defects” wording, it must meet strict content requirements, so it’s wise to use a compliant Warranties Against Defects Policy.
Remedies
- For a major failure with goods or services, the consumer can choose a refund or replacement (or cancel services).
- For a minor failure, you’re entitled to repair or re-supply within a reasonable time.
Your customer-facing documents (like a Terms of Sale) should explain how you handle repairs, replacements, refunds and returns in an ACL-compliant way.
Misleading Or Deceptive Conduct
You must not engage in conduct that misleads or deceives, or is likely to do so. This applies to advertising, website content, social media posts and sales discussions. If you make claims about price, quality, performance, or endorsements, ensure they are accurate and can be substantiated. For a deeper dive into how this is assessed, see the practical breakdown of misleading or deceptive conduct.
False Or Misleading Representations
The ACL also prohibits specific false representations. For example, claims about a product’s quality, sponsorship or approval, or a “strike-through” price can be risky if not accurate. Section 29 of the ACL focuses on these representations, which is why it’s important to sanity-check your marketing for section 29 compliance.
Unfair Contract Terms
Standard form contracts with consumers (and many small business customers) must not contain unfair terms that create a significant imbalance and aren’t reasonably necessary to protect your legitimate interests. If you use templates, get a UCT review and redraft to reduce your risk.
Pricing And Advertising
Ensure your displayed prices, discounts and promotions are clear, accurate and not misleading. This includes surcharges, bundled offers and time-limited sales. If you run promos, refresh your team on advertised price laws before campaigns go live.
Selling To Businesses: When A Business Customer Is Still A “Consumer”
The ACL doesn’t only protect individuals. A company buying goods or services under $100,000 may still be a consumer. Likewise, if a business buys goods of a kind ordinarily acquired for personal, domestic or household use, the consumer guarantees can apply regardless of price.
Practical implications for suppliers include:
- Don’t assume your B2B terms can exclude statutory guarantees - they generally can’t.
- Have a clear repair/replacement process set out in your Terms of Sale and customer support workflows.
- Train sales teams on the claims they can and can’t make about performance, delivery times and compatibility.
Online Stores And ACL Compliance
If you sell online, the ACL applies just the same. Your website is an extension of your storefront, so your policies and content need to be carefully drafted.
- Website Terms & Conditions: Set out how the site can be used, checkout rules, and key consumer rights - a tailored Website Terms and Conditions keeps your platform clearer and safer.
- Privacy: If you collect personal information (most online stores do), you’ll need a compliant Privacy Policy and sound data handling practices.
- Product Pages And Ads: Make sure descriptions, photos and comparison claims are accurate and reflect actual features and performance. Consider a final legal check for big campaigns to reduce the risk of misleading representations under section 29.
- Order, Delivery And Returns: Be upfront about shipping timeframes, expected delivery windows, and ACL-consistent returns and refunds wording in your customer-facing documents.
Getting Your Documents Right
Clear, consistent documents make ACL compliance easier in practice. The following instruments are commonly used by businesses selling goods or services in Australia:
- Website Terms & Conditions: Rules for using your site or platform, including disclaimers, IP ownership and consumer rights highlights - best prepared alongside your Website Terms and Conditions.
- Terms of Sale / Customer Agreement: Sets payment terms, delivery, risk and title, and your repair/replace/refund processes in an ACL-compliant way via a tailored Terms of Sale.
- Privacy Policy: Explains how you collect, use and store personal information, which is essential if you operate online or maintain a customer database; start with a compliant Privacy Policy.
- Warranty Wording: If you offer extra product assurances, ensure your “warranty against defects” language meets the ACL’s mandatory wording via a Warranties Against Defects Policy.
- Standard Form Contracts: If you rely on templates for subscriptions, maintenance or services, keep them free of unfair terms (a periodic UCT review and redraft is good risk management).
These documents work best when they’re aligned - your website, invoices and support scripts should all reflect the same ACL-compliant approach to customer rights and remedies.
Key Takeaways
- Under section 3 of the ACL, a person is a consumer if they buy goods or services for $100,000 or less, or buy goods or services ordinarily acquired for personal, domestic or household use (no price cap), or buy a vehicle or trailer primarily to transport goods on public roads.
- There are targeted exclusions (re-supply, use up/transform in production, and repair/treatment of other goods or fixtures), but there is no blanket “equipment” exclusion - assess each purchase against the statutory test.
- When a buyer is a consumer, the ACL’s consumer guarantees, remedies, unfair contract terms regime and prohibitions on misleading conduct and false representations all apply automatically.
- Many B2B transactions are still covered - if a business buys under $100,000 and no exclusion applies, treat them as a consumer for that purchase.
- For online stores, align your Website Terms & Conditions, Privacy Policy, product pages and customer service scripts so your processes match ACL requirements in practice.
- Use clear, consistent documents (Terms of Sale, warranty wording and website terms) and keep marketing aligned with section 29 to reduce risk of disputes and penalties.
If you’d like a consultation on how the ACL’s definition of consumer applies to your products or services - or you want help reviewing your contracts, website terms or warranty wording - you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
