Home decorating chain Copperart will apologise for an erroneous refund and exchange policy after Australian Competition and Consumer Commission action.

"This case illustrates consumers' rights to refunds for unsuitable goods, Australian Competition and Consumer Commission Chairman, Professor Allan Fels, said today.

"At Christmas it is important that consumers and business understand when consumers are entitled to refunds".

Copperart has revised signage at up to 160 outlets and removed the statement 'We do not give cash refunds. Exchanges will only be made within 7 days' from its cash register receipts.

"Cash refunds are available to consumers who have paid cash for goods that are defective, do not match the description or sample provided, do not do what they are supposed to do, or what the seller said they would do," Professor Fels said.

"Provisions of the Trade Practices Act 1974 ensure these conditions apply to all new goods sold in Australia.

"Copperart will publish an apology and, in the cases set out above, offer exchanges and refunds to consumers who may have been misled by the displayed exchange and refund policies.

"Copperart will also cease to charge a $2 exchange fee for these exchanges of goods and will not represent that such a fee is payable.

"It is important that retailers and consumers understand that no cash refund policies in most cases will breach the Act by misleading consumers as to their statutory rights".