If you sell goods or services in Australia, the word “consumer” matters a lot. It determines when the Australian Consumer Law (ACL) applies, which guarantees you must honour, and what remedies customers can demand if something goes wrong.
In recent years, that definition has shifted in a practical sense - and it now captures a much wider range of transactions, including many business-to-business purchases. That means more obligations for suppliers, and stronger protections for buyers (including small businesses).
In this guide, we’ll unpack what “consumer” means today under the ACL, how and why the scope has expanded, what could change next, and the steps you can take to stay compliant. We’ll also cover practical contract, marketing and process updates you can roll out to reduce risk right away.
What Does “Consumer” Mean Under The ACL Today?
The Australian Consumer Law (in Schedule 2 of the Competition and Consumer Act 2010) sets out when a buyer is taken to be a “consumer”. If a buyer is a consumer, they get the ACL’s consumer guarantees - and you, as the supplier, must meet those guarantees and offer the correct remedies if things go wrong.
Under section 3 of the ACL, a person (including a business) is taken to have acquired goods or services as a consumer if any one of the following is true:
- Price threshold: The amount paid or payable is $100,000 or less. This captures many purchases that used to fall outside the ACL (more on that below).
- Ordinarily personal use: The goods or services are of a kind ordinarily acquired for personal, domestic or household use or consumption. This applies regardless of the price.
- Vehicle/trailer: The goods are a vehicle or trailer acquired principally for the transport of goods on public roads, regardless of the price.
There are also important exclusions to be aware of. Even if the price is $100,000 or less, a buyer is not a consumer if the goods are acquired:
- for resupply, or
- to use or transform in the course of production or manufacture, or
- to repair or treat other goods or fixtures on land.
So, a retailer buying stock to sell on is not a consumer. But a café purchasing a $15,000 espresso machine (not for resale, and not used up in manufacture) will likely be a consumer under the price threshold limb.
What Changed - And Why It Matters
On 1 July 2021, the price threshold in the consumer definition increased from $40,000 to $100,000. That single change significantly broadened the ACL’s reach.
Practically, this means many business purchases that were previously outside the ACL are now covered. Think of a small construction company buying a $75,000 trailer, a marketing firm paying $60,000 for equipment, or a workshop engaging $90,000 of specialist services - the buyer in each case is likely a “consumer” for ACL purposes.
For suppliers, this has two big effects:
- More sales are covered by consumer guarantees. You need to meet the standards of acceptable quality, fitness for purpose, matching description, due care and skill (for services), and reasonable time for supply - among others.
- Contract terms and policies may need rework. Terms that try to exclude or limit consumer guarantees will be void. You may also need to update warranty wording and your approaches to refunds, repairs and replacements.
The shift also interacts with other ACL rules. For example, if your messaging could mislead consumers, you risk breaching the ACL’s ban on misleading or deceptive conduct, and if you make specific product claims, you need to avoid false or misleading representations.
Are More Changes Coming To The “Consumer” Definition?
Consumer law reform is an active policy area. Regulators and government continue to examine how the ACL can better protect Australians and support fair trading in a digital economy.
There has already been a major expansion of penalties and coverage in related areas - for example, the strengthened unfair contract terms regime commenced in late 2023, significantly increasing risk for businesses that use standard form contracts with small businesses or consumers.
Looking ahead, it’s sensible to plan on the basis that protections will remain robust and that definitions may be interpreted broadly to meet the ACL’s purpose. The safest approach is to assume more of your transactions could be captured, especially where you sell to small businesses or sole traders.
If you want to be proactive, start by tightening your consumer-facing information (including website and sales copy), reviewing standard terms, and building clear processes for handling faults, delays and returns.
What Does This Mean For Your Contracts, Marketing And Processes?
As the practical scope of “consumer” expands, small gaps in your paperwork or customer journey can become big risks. Here’s where to focus first.
1) Refresh Your Customer Terms And Warranties
Your customer-facing contract should clearly set out pricing, deliverables, timeframes and how problems will be handled - without attempting to exclude mandatory rights. Well-drafted Terms of Sale can do the heavy lifting here, guiding your team and setting fair expectations for customers.
If you provide a written or advertised warranty, make sure it meets ACL requirements for wording, disclosure and how claims are handled. A compliant Warranties Against Defects Policy can help you avoid technical breaches that might invalidate your warranty or attract penalties.
2) Tighten Your Advertising And Sales Copy
Under the ACL, your marketing must not mislead or deceive consumers - even unintentionally. That covers website claims, social media, sales scripts, testimonials, and pricing displays.
Cross-check your messaging against the rules on misleading or deceptive conduct and specific false representations (for example, about quality, benefits or availability). For pricing transparency, make sure you’re following the key principles in the ACL and the guidance around advertised price laws.
If you’d like a second set of eyes, a focused Website Copy Review can pick up risky claims and suggest compliant alternatives that still convert.
3) Clarify Your Returns, Repairs And Remedies
Consumer guarantees sit alongside any voluntary warranty you offer. If there’s a major failure with a product or service, consumers can choose a refund or replacement; for minor failures, you can usually repair within a reasonable time. Make sure your internal processes and staff training reflect those rights.
Many businesses still ask, “Is there a 2-year limit?” There isn’t a fixed timeframe for consumer guarantees - they last for a period that’s reasonable for the type of product or service. Our guide on the ACL ‘2 years warranty’ myth explains how to assess what’s reasonable in practice.
4) Keep Your Website Compliance In Order
If you sell online or collect customer data, make sure your storefront and policies are up to scratch. This usually includes:
- Website Terms and Conditions that set the rules for using your site and buying online.
- A clear, accessible Privacy Policy explaining how you collect and use personal information.
- Accurate product descriptions, transparent pricing and delivery information, and easy-to-find contact details.
Getting the basics right here reduces complaints and makes it easier to resolve issues quickly and fairly.
Practical Examples: When Is A Buyer A “Consumer” Now?
To help you apply the rules, here are a few typical scenarios under the current definition.
Example 1: Professional Equipment Under $100,000
A physiotherapy clinic buys a $48,000 ultrasound machine for use in treatments. Even though the clinic is a business and the machine isn’t for personal use, the purchase sits under $100,000, so the clinic acquired the machine as a consumer under the ACL. Consumer guarantees apply.
What to do: Ensure your sales terms and warranty processes provide clear remedies if the equipment isn’t of acceptable quality or fails prematurely.
Example 2: High-Value Vehicle For Transport
A logistics start-up buys a $140,000 trailer to transport goods on public roads. Even though the price exceeds $100,000, the buyer is still a consumer because trailers for transporting goods are specifically included. Consumer guarantees apply.
What to do: Avoid contract clauses that attempt to exclude mandatory rights and provide remedies aligned with the ACL.
Example 3: Stock For Resale
A retail store buys $30,000 of packaged products from a wholesaler to sell in-store. Because the goods are acquired for resupply, the buyer is not a consumer for that purchase. The ACL’s consumer guarantees don’t apply to that business-to-business transaction (though other ACL obligations, like misleading conduct, still do).
What to do: Keep supply contracts clear on quality standards, delivery, and risk allocation, but don’t rely on consumer guarantee language for wholesale terms.
How To Respond: A Practical ACL Compliance Plan
Compliance doesn’t have to be complicated. Start with a quick, structured review across four areas, then fix any gaps you find.
1) Map Your Sales And Services
- List what you sell, who you sell to (consumers, businesses, or both), and typical price points.
- Flag any products or services under $100,000, or ordinarily for personal/household use, or vehicles/trailers for transporting goods.
- Note wholesale or resupply transactions separately.
2) Check Your Customer Journey
- Review website product pages, checkouts, invoices and order confirmations for accuracy and clarity.
- Confirm pricing displays are upfront and compliant with advertised price laws.
- Remove or rewrite any “no refunds” or “all sales final” statements that may mislead.
3) Update Your Paperwork
- Replace outdated cancellation or warranty wording with compliant terms in your Terms of Sale.
- Adopt a compliant Warranties Against Defects Policy if you offer a voluntary warranty.
- Ensure website storefronts display accessible Website Terms and Conditions and your Privacy Policy.
4) Train Your Team
- Run short refreshers on consumer guarantees and what your staff can offer at the counter or over the phone.
- Standardise messaging to avoid misleading conduct and false representations.
- Set clear escalation points for disputes so problems are resolved quickly and fairly.
Common Pitfalls To Avoid
We see a few recurring issues when businesses adjust to the broader consumer definition. Avoiding these will reduce complaints and compliance risk.
- Hidden fees or conditions: Surcharges, delivery fees or conditions tucked away in fine print can mislead. Keep price components transparent and visible.
- “No refunds” signs: Blanket statements like “no refunds” are problematic. You can outline when refunds apply, but you can’t exclude consumer guarantees.
- Over-promising in marketing: Phrases like “lifetime performance” or “guaranteed results” can create legal obligations. Sense-check them against the ACL and your actual product performance.
- Warranty wording that misses ACL requirements: If you offer a voluntary warranty, make sure the mandatory ACL wording is included and accurate. A proper warranty against defects template saves a lot of trouble here.
- Ignoring the 2-year myth: There’s no fixed two-year limit for consumer guarantees. The period must be “reasonable” for the product - see our explainer on the ‘2 years warranty’ misconception.
What About Disputes And Remedies Under The ACL?
If something goes wrong, the remedy depends on whether the problem is a major or minor failure.
- Major failure (goods): The consumer can choose a refund, replacement, or keep the goods and seek compensation for the drop in value. Examples include goods that are unsafe, significantly different from the description, or can’t be fixed easily within a reasonable time.
- Minor failure (goods): You can choose to repair within a reasonable time. If you don’t, the consumer can get the repair done elsewhere and recover the cost, or reject the goods for a refund or replacement.
- Services: If services are not provided with due care and skill or within a reasonable time, the consumer can seek a remedy - including a refund for major failures or a repeat of the service to fix the issue.
On top of these guarantees, consumers can pursue loss or damage that is reasonably foreseeable. The enforcement landscape is stronger than ever, including under provisions like section 236 (which relates to remedies for contraventions). Having the right processes (triage, repair/refund workflows, escalation steps) reduces the chance of a dispute escalating.
Key Legal Documents To Support ACL Compliance
You don’t need a mountain of paperwork - just a few well-drafted documents that reflect the ACL and the way you actually do business.
- Terms of Sale: Your core customer contract that sets expectations, explains the sales process and aligns remedies with the ACL. A tailored set of Terms of Sale helps you manage risk and resolve issues faster.
- Warranties Against Defects Policy: If you offer your own warranty, use an ACL-compliant warranty against defects policy with the correct mandatory wording and instructions.
- Website Terms and Conditions: Essential for online stores to set site rules, checkout terms and acceptable use. See Website Terms and Conditions.
- Privacy Policy: If you collect personal information (most businesses do), you’ll need a clear Privacy Policy that reflects your data practices.
- Marketing Sign-Off Process: Not a contract, but a simple checklist before publishing ads or product pages - to avoid false representations or confusing price displays.
Key Takeaways
- The ACL’s definition of “consumer” now captures many more purchases thanks to the $100,000 threshold and other deeming rules.
- Suppliers must honour consumer guarantees and cannot contract out of them - refresh your terms, warranty wording and returns processes accordingly.
- Marketing and pricing transparency are critical; watch out for misleading conduct and false representations in everyday sales copy.
- There’s no fixed “2-year” limit on consumer guarantees - the period is whatever is reasonable for the product or service.
- Put core documents in place (Terms of Sale, warranty policy, website terms and a privacy policy) and train your team to handle remedies correctly.
- With active consumer law enforcement and ongoing policy attention, designing for ACL compliance now is the safest, most customer-friendly strategy.
If you’d like a consultation on aligning your contracts, warranties and customer processes with the Australian Consumer Law, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
