An Australian restaurant has to refund a diner only when a consumer guarantee has actually failed, but displaying a No Refunds sign is a separate breach of the Consumer Law carrying up to A$2,500,000 for a sole trader.
Skai Solutions builds the phone agent that takes the booking, so this argument reaches us second hand most weeks, and it is almost always the wrong argument. The refund is small. The sign on the wall is not. Below is what the statute says, section by section, read straight from the register.
Schedule 2 of the Competition and Consumer Act 2010, the Australian Consumer Law, gives every customer a set of statutory guarantees. They are not a refund policy and they are not a goodwill gesture. They apply whether or not you have written anything down, and section 64 makes any contract term that tries to cut them back void, not merely unenforceable.
The part almost nobody gets right is that a restaurant bill is not one supply. It is two.
Two supplies, two guarantees, and two different remedy regimes with different rules. That is why generic refund advice written for a shop does not transfer cleanly to a dining room.
Section 54(2) sets the test for the food. Goods are of acceptable quality if they are fit for all the purposes for which goods of that kind are commonly supplied, acceptable in appearance and finish, free from defects, safe and durable, as judged by a reasonable consumer fully acquainted with their state and condition. Section 54(3) then lists what that judgement takes into account, and the second item is the price. A A$14 pub schnitzel and a A$52 restaurant plate are not held to one standard by the Act itself.
The services side has no equivalent price dial. Due care and skill under section 60 is due care and skill at any price point.
There is one more asymmetry worth knowing, because it decides arguments. Section 267(1)(c) lets you point at a third party or at a cause independent of human control that happened after supply, and it disapplies the services claim. But it carves out section 60 by name. So "the supplier sent us a bad delivery" can answer a fitness-for-purpose complaint. It cannot answer a due-care-and-skill complaint.
Only when a guarantee has failed. Then the remedy depends on which limb failed and how badly.
| Situation | Section | What the customer can require |
|---|---|---|
| Food falls short, fixable, not major | 259(2) | You remedy it in a reasonable time. If you refuse, they can have it fixed elsewhere and recover the cost, or reject the meal |
| Food falls short, major or unfixable | 259(3) | Reject the meal, or keep it and recover the drop in value below the price paid |
| Service falls short, fixable, not major | 267(2) | You remedy it in a reasonable time. If you refuse, they recover the cost of fixing it, or terminate |
| Service falls short, major or unfixable | 267(3) | Terminate, or recover the drop in value below the price paid |
| Any of the above | 259(4), 267(4) | Damages for reasonably foreseeable loss, on top |
Section 268 defines a major services failure, and the restaurant-relevant limbs are that a reasonable consumer fully acquainted with the failure would not have bought at all, that the service is substantially unfit and cannot easily be fixed in a reasonable time, or that the supply creates an unsafe situation. That last one is why a plate that makes somebody ill is in a different category from a plate that arrived cold. If a complaint is heading that way, the food poisoning complaint process is the page you want, not this one.
On the goods limb, largely yes, and this is the most useful thing on this page because the instinct behind it is sound and the reasoning is never spelled out.
Section 262(1) says a customer cannot reject goods once the rejection period has ended, or where the goods have been lost, destroyed or disposed of by the customer. Section 262(2) defines the rejection period as the period within which it would be reasonable to expect the failure to become apparent, having regard to the type of goods and the use a consumer is likely to put them to. For a hot plate of food, that period is measured in minutes. An eaten main is also, in the Act's own language, disposed of.
So "you finished it, there is no refund" has real statutory support. What it does not do is end the matter, and this is where venues overreach:
The honest version, which is also the one that de-escalates fastest at the table: they cannot hand back a finished meal, but they can still argue it was worth less than you charged.
Here is the number that should decide your signage, and it is roughly five orders of magnitude away from the cost of the meal.
A sign or a terms line reading "No Refunds", or "No refunds on change of mind or otherwise", does two separate things. Under section 64 the term is simply void, so it buys you nothing. But displaying it is also a representation about the existence or effect of a guarantee, and section 29(1)(m) prohibits a false or misleading representation "concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy". Section 29 sits in Part 3-1 of the Act.
Part 3-1 is in item 2 of the penalty table at section 224(3). For a person who is not a body corporate, that is up to A$2,500,000. For a body corporate it is the greater of A$100,000,000, three times the benefit obtained, or 30% of adjusted turnover for the breach period, under section 224(3A). And section 224(1) applies it "in respect of each act or omission".
Set that beside the thing the sign was meant to protect. Refusing a A$38 refund you owed exposes you to the price of the meal and some foreseeable loss. Putting a sign on the wall to avoid that conversation exposes you to a Part 3-1 penalty scale, on a term that was void the moment you wrote it. The sign is the expensive mistake, not the refund. This is the same asymmetry that shows up in surcharge and service charge wording, where the display rule carries a far heavier scale than the amount in dispute.
The opposite situation has its own rules and they are not the refund rules. For a table that walks out without paying at all, see our page on what to do when a customer leaves without paying.
Plenty, and the Act gives you the words for it.
Notice what all four have in common: they are reasons a guarantee did not fail. None of them is a policy you imposed. That is the only kind of refusal the Act respects.
Write what the law does, then say what you will do on top. A position that only restates the Act is safe and useless. A position that contradicts it is void and expensive.
Four lines is usually enough. What you do if a dish is not as described and it is still on the table. Who at the venue can authorise it without asking (name the role, and make it the person on the floor, because a manager-only rule is how a five minute problem becomes a review). What you do once a plate is finished, which is where you concede value rather than refuse outright. And what you do not refund, which is change of mind, stated plainly rather than dressed up as a rule about refunds generally.
One practical note that sits outside the Act. If your bookings and complaints arrive by phone, the person who hears the complaint first is whoever picks up during service, which is usually the least senior person in the building. Writing the position down is only half of it. Somebody has to be reachable to apply it, and a call that rings out at 7pm becomes a public review instead of a A$38 adjustment. That is the same fixed cost logic behind no-show fees: the policy is worth exactly as much as your ability to enforce it calmly and consistently.
If you trade in New Zealand, our city pages set out what the phone side of a venue looks like there, including Christchurch.
No, and do not read the sections above as New Zealand law. New Zealand's equivalents are the Consumer Guarantees Act 1993 and the Fair Trading Act 1986, which are separate statutes with their own wording, remedies and penalty scales. The broad shape is similar, in that guarantees cannot be contracted out of for consumer supplies and misrepresenting them is an offence. The detail differs and a New Zealand venue should work from the New Zealand Acts. Everything cited on this page is Australian.
Most refund conversations start as a phone call, and at a small venue there is rarely anyone free to take it during service. Whether software is the right answer to that is tested on our page on whether an AI receptionist works for a coffee shop.
This is the text of the statute, read from the compilation registered on 16 September 2026, not legal advice for your venue. Two things it deliberately does not do. It does not tell you how a court has applied section 54(3) to a particular dish, because that is case law and it turns on facts. And it does not cover deposits or cancellation fees, which raise a different question about whether a term is unfair rather than whether a guarantee failed. If a complaint has turned into a claim, get advice.
The operator guides index the rest of the compliance material, and gift voucher expiry rules covers the one other part of the Act with a hospitality-specific section written into it. If your phone is what is dropping these complaints on the floor, an AI receptionist for restaurants is what Skai Solutions does about that.
Do restaurants have to give refunds in Australia?
Only where a consumer guarantee has failed. If the food was not of acceptable quality under section 54, or the service was not rendered with due care and skill under section 60, the customer has a remedy. A change of mind is not a guarantee failure and carries no right to a refund.
Can a restaurant have a no refund policy?
You can have a written position on refunds, but you cannot exclude the statutory guarantees. Section 64 makes any term that tries to do so void. Displaying a No Refunds sign is also a representation about the effect of a guarantee, which section 29(1)(m) prohibits, with penalties under section 224(3) item 2 of up to A$2,500,000 for an individual.
Does a customer get a refund if they have eaten the meal?
They usually cannot reject the meal, because section 262 closes rejection once the rejection period has ended or the goods have been disposed of, and for hot food that period is very short. They can still seek compensation for the reduction in value below the price paid under section 259(3)(b), and damages for foreseeable loss.
Does a menu warning protect the venue?
It can. Section 54(4) says that if the only reason food was not of acceptable quality was specifically drawn to the customer's attention before they agreed to buy, the food is taken to be of acceptable quality. A note that a dish is served pink, or may contain bones, is doing statutory work rather than just managing expectations.
Who decides whether a failure is major?
Section 268 sets the test for services and section 260 for goods. For services the limbs include that a reasonable consumer fully acquainted with the failure would not have acquired the service, that it is substantially unfit and cannot easily be remedied in a reasonable time, or that the supply creates an unsafe situation.
Is the New Zealand position the same?
No. New Zealand works from the Consumer Guarantees Act 1993 and the Fair Trading Act 1986. The broad principle that guarantees cannot be contracted out of is similar, but the sections, remedies and penalties are different and a New Zealand venue should work from the New Zealand statutes.