COVID-19 (coronavirus) information for business

On this page you will find the latest information on the rights and obligations of businesses in response to events caused by the COVID-19 pandemic. This will be updated regularly as new guidance becomes available.

The ACCC understands many businesses are struggling to manage cancellations, delays and suspension of products and services.

As a first step, we encourage businesses to contact customers wherever possible to advise them of how you are handling various circumstances. In doing so, businesses should continue to be mindful of their obligations under the Australian Consumer Law, which include:

  • to not mislead customers, including about what the customer is entitled to under their terms and conditions
  • to not act unconscionably when dealing with their customers
  • to not seek to rely on unfair terms in standard form contracts with customers.

Consumers can find information on their rights in relation to goods and services in our Consumer section. In many instances, small businesses are also defined as consumers, especially in relation to dealings with large businesses.

Information for the travel industry

The ACCC and state and territory Australian Consumer Law regulators have developed this best practice guidance for the travel industry in relation to dealing with COVID-19 related cancellations. The guidance relates primarily to circumstances where travel services have been cancelled as a result of the COVID-19 pandemic (rather than, for example, where a travel service will still proceed but a consumer has decided to cancel their booking).

ACCC and ACL Regulators best practice guidance for the Travel Industry for COVID-19 related travel cancellations ( PDF 207.76 KB )

Information for small business

Cancellation of functions and events

  • If cancellation occurs due to government restrictions, it is unlikely the customer will be entitled to a refund under the Consumer guarantee provisions of the Australian Consumer Law.
  • A business is still required to honour its existing terms and conditions, including in respect to cancellation and change policies. The relevant terms and conditions are those in effect at the time your customer made their booking, i.e. you cannot retrospectively change these.
  • The customer may also have rights under contract law where the contract has not been performed.
  • You may agree to another remedy with the customer, such as providing a partial refund, a credit note or voucher, or postponing the services until a later date if possible.
  • If you provide a credit note or voucher, it should have an expiration date which is long enough to allow your customer to use the credit note or voucher.
  • In many circumstances, a term allowing a business to retain the full deposit or payment without having delivered any goods or services may be considered unfair under the unfair contract terms provisions of Australian Consumer Law, as it may not be reasonably necessary to retain the full amount to protect legitimate business interests. However, this is unlikely to be the case if you are covering costs you have incurred.
  • Under the Australian Consumer Law terms in standard form contracts can be declared to be unfair and void by a Court, which means they can’t be enforced. An example could be a contract under which one party can decide to cancel without penalty, whereas the other party incurs a significant cost if they cancel.
  • If cancellation occurs due to government restrictions, it is unlikely the customer will be entitled to a refund under the Consumer guarantee provisions of the Australian Consumer Law.
  • Whether your customer is entitled to a refund of their deposit will depend on your contract’s terms and conditions at the time of the booking.
  • The customer may also have rights under contract law where the contract has not been performed.
  • You may agree to another remedy with the customer, such as providing a partial refund, a credit note or voucher, or postponing delivery of the goods or services until a later date if possible.
  • If you provide a credit note or voucher, it should have an expiration date which is long enough to allow your customer to use the credit note or voucher.
  • You will need to honour any verbal or written representations you made to your customer about how you will handle their deposit or upfront payment if there is a change or cancellation of their booking.
  • If cancellation occurs due to government restrictions, it is unlikely the customer will be entitled to a refund under Consumer guarantee provisions of the Australian Consumer Law.
  • It may be that you and the customer did not discuss what would happen if there was a change of booking or cancellation. But you may still have an oral contract, and the customer may have rights to a refund under contract law in circumstances where the contract can no longer be performed.
  • You may agree to another remedy with the customer, such as providing a partial refund, a credit note or voucher, or postponing the services until a later date if possible.
  • If you provide a credit note or voucher, it should have an expiration date which is long enough to allow your customer to use the credit note or voucher.

Supply and pricing issues

  • In most cases you will be required to provide a full refund.
  • You can retain payments for goods or services already provided.
  • If it is your supplier’s fault that you can’t supply the goods, you may be entitled to reimbursement under your contract with that supplier.
  • Businesses will need to honour the terms and conditions of a contract, including cancellation and change policies.
  • There is a risk that if you order stock during the COVID-19 pandemic and later decide you do not need it, suppliers will be less willing to allow you to cancel the order.
  • If you already have an agreement in place, it is always open to you and the supplier to agree on new arrangements.
  • If your members make regular or recurring payments for a service that can no longer be delivered, then further payments should not be processed without the member’s consent.
  • The Australian Consumer Law prohibits businesses from taking payments for services when there are reasonable grounds to believe the services won’t be supplied.
  • This applies whether or not the contract allows payments to be suspended.
  • You can continue to take payments if you are still providing services to your members, for example online classes, with their agreement.
  • If payments have been deducted while there has been no supply of services then payments should be refunded, unless the member agrees to have payments credited against future services.
  • New fees that have not been previously agreed with the member should not be charged or processed.
  • Where memberships are being paused due to government restrictions preventing you from supplying the service, rather than members requesting a pause, the ACCC expects that you will not charge any membership ‘freeze’ or ‘holding fees’.
  • As a general rule, suppliers can set their own prices, based on supply and demand.
  • In some limited circumstances excessive pricing may be unconscionable, for example where the product is critical to the health or safety of vulnerable consumers. Engaging in unconscionable conduct is a breach of the Australian Consumer Law.
  • Further, if a business makes misleading claims about the reason for price increases, it will be breaching the Australian Consumer Law.
  • Given the exceptional circumstances, the ACCC encourages all businesses to treat each other fairly.
  • As a general rule, you can set your own prices, based on supply and demand.
  • In some limited circumstances excessive pricing may be unconscionable, for example where the product is critical to the health or safety of vulnerable consumers. Engaging in unconscionable conduct is a breach of the Australian Consumer Law.
  • You can’t make misleading claims about the reason for price increases.
  • Note that the Federal Government has passed a law which prohibits excessive pricing of disposable face masks, disposable gloves, disposable gowns, goggles, glasses, or eye visors used for limiting the transmission of organisms to humans, or of alcohol wipes and hand sanitiser.

Product returns and exchanges

  • We understand that many businesses have concerns about the health of their staff due to COVID-19. We encourage businesses to stay up-to-date with any national or state government public health restrictions that may impact business operations, including facilitating returns and refunds.
  • However consumer guarantee rights under the Australian Consumer Law continue to apply during this time. If your product fails to meet a consumer guarantee, your customer is entitled to a remedy under the Australian Consumer Law.
  • If the product is faulty, you must provide your customer with a repair, replacement or refund. The remedy you must provide will depend on whether there is a major or minor problem with the product.
  • You should contact the customer to discuss the options available to return the faulty product, and to obtain a repair, replacement or refund. You may agree on measures to protect against health concerns such as facilitating contactless return, repair or replacement of the product via post.
  • Alternatively, if these measures are not sufficient to address your health concerns associated with the return of a faulty product, you may wish to provide the customer with a replacement item or refund without requiring the customer to return the product, and leaving the customer to dispose of the faulty product as they wish.
  • Refer to our repair, replace, refund page for more information about who is responsible for the costs of returning a product.
  • If the customer wants to return a product because they have simply changed their mind (e.g. they no longer want the product), rather than because the product is faulty, they are not entitled to a refund unless your business offers a returns policy for change of mind reasons.
  • A business can place conditions on the return of items under a change of mind returns policy. This includes restrictions due to COVID-19. Regardless of the reason for the conditions, the returns policy must be stated upfront and clearly.
  • We encourage businesses to be proactive in providing customers with clear information about the operation of their returns policy during COVID-19.
  • The relevant terms and conditions are those in effect at the time the customer purchased the product, i.e. you cannot retrospectively change these terms.

Delivery delays

  • Australia Post has stated deliveries are taking longer due to the impacts of COVID-19, including international delays, less domestic flights and high volumes of products being bought online. These factors will also be affecting courier and delivery businesses.
  • Businesses should anticipate that it may take longer than usual for online purchases to be delivered to customers, and review their usual advice to consumers on delivery estimates accordingly.
  • You should clearly communicate any potential delivery delays to customers prior to and at the time of purchase. We encourage business to be proactive in providing customers with updates about when delivery can be expected.
  • Timely and frequent proactive communication with customers at this time can reduce the need for customers to make additional enquiries about the status of their order.
  • Businesses should also amend any express delivery options that cannot be guaranteed, particularly options that are offered at an extra charge to consumers. Any business using Australia Post’s Express Post delivery option should take care with representations made to consumers about expected delivery times, given that Australia Post has temporarily removed its Express Post next day guarantee.
  • If you have accepted payment for an item, you must supply the item to the customer by the date you have indicated or within a reasonable timeframe (if no time was specified).
  • Many businesses are managing supply and/or delivery delays due to circumstances arising from the impacts of COVID-19. In the current circumstances, a reasonable timeframe is likely to be longer than what is usual.
  • You should provide your customers with timely information about whether the product they ordered is in stock, and an estimate of when they can expect to receive the item.
  • Active and frequent communication can help businesses manage customer expectations and reduce the need to divert resources into managing customer complaints.

Business closures

  • If your members make regular or recurring payments for membership and you cannot continue to provide the service, you must not process further payments without the member’s consent.
  • The Australian Consumer Law prohibits businesses from taking payments for services when there are reasonable grounds to believe the services won’t be supplied.
  • This applies whether or not the contract allows payments to be suspended.
  • You can continue to take payments if you are still providing services to your members, for example online classes, with their agreement.
  • If payments have been deducted while the gym has been closed then payments should be refunded, unless the member agrees to have payments credited and used for future gym membership.
  • New fees that have not been previously agreed with the member should not be charged or processed.
  • Given many memberships are being paused due to government restrictions preventing gyms from operating, rather than members requesting a pause, the ACCC expects that gyms will not charge any membership ‘freeze’ or ‘holding fees’.
  • To manage the impact of COVID-19 some business made the difficult decision to temporarily close.
  • We expect all businesses to honour and extend gift card expiry dates to cover any period that the card was unable to be used due to the business's closure.
  • If your businesses continued to trade in some capacity, your customers may have still been able to use their gift card or voucher online, even if your physical stores were closed.
  • However, if your customers were unable to use their gift card or voucher in this period because of the terms and conditions your business has placed on it (for example, a gift card that can only be used in a physical store where the business traded in an online capacity only during the COVID-19 restrictions), the ACCC expects that you will provide customers with some form of remedy. You may consider:
    • reimbursing the amount remaining on the gift card or voucher that could not be used during the period
    • extending the expiry period of the gift card or voucher to give it an expiration date which is long enough to allow the customer to use the credit note or voucher
  • If your business’s physical stores are still closed, you may also wish to consider amending the terms and conditions on the gift card or voucher to enable the customer to use it online.
  • The ACCC understands that many businesses are struggling to manage a high number of customer enquiries at this point in time due to circumstances outside their control. Communicating proactively with customers can reduce the need for customers to make additional enquiries in relation to gift cards.

Information for franchising

Whether you are a franchisor or franchisee, the COVID-19 pandemic brings with it financial and operational challenges for many in the franchising sector both now and into the future.

For most franchise systems, it is not business as usual. It is more important than ever that franchisors and franchisees have a collaborative, constructive and flexible relationship.

These FAQs respond to issues for both franchisors and franchisees arising from the impacts of the COVID-19 pandemic.

In addition to the requirement to act in good faith as set out in the Franchising Code, franchisors should be mindful of their obligations under the Australian Consumer Law, which include:

  • not to mislead franchisees and potential franchisees, including about what the franchisee is entitled to under their terms and conditions
  • not to act unconscionably when dealing with their franchisees, and
  • franchisors are also warned that unfair terms in standard form contracts which cause a significant imbalance in the parties’ rights and obligations, and are not reasonably necessary to protect the legitimate interests of the franchisor, may be declared void by the Court.
  • In order to continue trading in the current COVID-19 environment, some franchise systems have adapted and changed the services they provide to customers.
  • The franchise agreement will set out the franchisee’s obligations in providing services or products to its customers.
  • The franchisor and franchisee can also agree to make changes to a franchisee’s customer offering on a temporary basis, in whole or in part. This may be dependent on whether the change is material and the customer agrees to the new service.
  • We expect franchisors to clearly communicate and continuously consult with franchisees on any changes they propose to make.
  • If a franchisee does not agree to proceed with a material change proposed by the franchisor that is outside the terms of the franchise agreement, the ACCC expects the franchisor will not charge any new or additional fees to the franchisee for this changed service.
  • If services have been reduced, as discussed below, the ACCC expects that franchisors will reduce fees accordingly.
  • Where there has been a direct impact on the services provided to franchisees, the ACCC expects that franchisors will be adjusting the fees and payments they usually charge to franchisees, so that franchisees are not paying for services they are not receiving.
  • Further, during this time, we would expect franchisors to be continuously reviewing their franchisees’ usual obligations as well as the franchise system’s processes and supply arrangements, making adjustments, and being flexible with requirements to help ensure its franchisees’ businesses remain viable.
  • Franchisors should also be proactively reviewing what services and costs they pass on to franchisees and should consider whether it would be appropriate to cancel them or suspend them in order for savings to be passed on. This may include suspending or cancelling conferences and marketing services.
  • Franchisees are likely to be relying on their franchisor, who has direct relationships with key suppliers and landlords, to negotiate appropriate temporary arrangements due to COVID-19. Franchisors should ensure they have open and transparent communications with their franchisees and are appropriately passing on the benefits derived from these negotiations to franchisees, such as rent reductions.
  • You might find that, due to the impacts of COVID-19 on your business, you may not be able to meet your obligations under the franchise agreement.
  • As a first step, you should communicate with your franchisor with a view to exploring options and solutions to the challenges you are facing.
  • You might consider asking the franchisor to:
    • delay, suspend or reduce fees such as marketing or service fees on the basis of your reduced income and/or if the franchisor is unable to provide (either in whole or in part) the service those fees were charged for.
    • allow changes to business practices that will allow you to continue trading where possible, such as seeking lower-cost supplies, relaxing supply restrictions or adjusting opening hours.
  • If you are able to reach agreement on a way forward, make sure it is put in writing and you get independent legal advice before signing any agreement or contractual variation to ensure it is drafted appropriately.
  • Every franchise agreement is different, so it is important to carefully review your agreement for any clauses that may allow you to vary, suspend or excuse you from the performance of your contractual obligations.
  • The law can be complex, so it is important to seek independent legal advice on these issues.
  • If you are unable to resolve your concerns through informal means, you have the right to formally raise a dispute with the franchisor in relation to any matter arising under your franchising relationship. Information about resolving franchising disputes is available on our website.
  • If you think the franchisor is acting unconscionably in the circumstances, or is not acting in good faith in their dealings, you can report it to the ACCC via our online portal.
  • The ACCC enforces the Franchising Code and, in line with its Compliance and Enforcement Policy, uses a range of tools to encourage compliance with the Competition and Consumer Act and the Franchising Code. This includes business and consumer education, and working closely with stakeholders and other agencies.
  • In appropriate circumstances, the ACCC can also take enforcement action against franchisors for breaches of the Competition and Consumer Act, including the Australian Consumer Law.
  • See also: What we can & can’t do for small business.
  • There is a requirement in the Franchising Code for both franchisors and franchisees to act in good faith.
  • The good faith obligation includes acting honestly, co-operatively, and with due regard to the rights and interests of the other party, but does not prevent a party from acting in their own legitimate commercial interests.
  • When considering whether your franchisor is acting in good faith, potential questions to ask include:
    • is the franchisor making timely decisions
    • is the franchisor consulting with franchisees regarding issues or proposed changes
    • is the franchisor imposing conditions on franchisees that are not necessary to protect its interests
    • is the franchisor genuinely attempting to resolve the dispute
    • is the franchisor acting for some ulterior purpose.

Country of origin labelling

  • Businesses need to use their best endeavours to communicate to consumers in an effective way when there have been changes in the manufacturing process or supply chain changes for ingredients.
  • Businesses should take reasonable steps to correct any country of origin claims that become incorrect due to such manufacturing or supply chain changes. This could include corrective stickers on packaging or corrective point of sale material.
  • In a heightened public health environment consumers value accurate and clear information on the origin of the food they purchase.
  • Inaccurate country of origin claims also give a business an unfair advantage over other businesses who make the effort to ensure their claims are compliant.
  • The ACCC takes a proportionate approach in considering any compliance or enforcement action in relation to country of origin labelling.
  • We are unlikely to take enforcement action where a business has made genuine and reasonable efforts to comply with the country of origin labelling requirements, and to ensure consumers are informed about any changes to its country of origin claims.
  • Refer to our country of origin labelling webpage and our Compliance and Enforcement Policy for further information.

More information

Australian Government Business (business.gov.au) - Coronavirus information and support for business

ACCC/AER position statement on COVID-19

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