The Australian Consumer Law (ACL) applies to subscriptions just like any other sale. You can't mislead customers about price, renewal or cancellation; services and digital products carry consumer guarantees that 'no refunds' policies can't override; and unfair terms in standard form contracts can be void and penalized. From 1 July 2027, the ACL adds specific subscription duties.
Key takeaways
- The ACL is in Schedule 2 of the Competition and Consumer Act 2010 and applies to all businesses selling to Australians, including overseas businesses.
- Consumer guarantees cover subscriptions of goods, services and software. A 'no refunds' policy can't override them.
- Misleading sign-ups, hidden renewals and buried fees can breach the ACL today, before the 2027 subscription rules.
- Business customers get consumer guarantee rights for purchases under A$100,000, and small businesses get unfair contract term protection.
- You don't have to give change-of-mind refunds under the ACL, but your own policy must be honest and can't contradict the guarantees.
Valve is a US company. It runs Steam, the huge online store for computer games.
Its subscriber agreement and refund policies told Australian gamers they couldn't get a refund for a downloaded game in any circumstances. Valve also said it had excluded or limited the statutory guarantee that products be of acceptable quality.
Valve argued, in effect, that Australian law didn't reach a US company selling downloads.
The Federal Court disagreed.
In 2016 the court found Valve had made false or misleading representations about consumer guarantees. It found Valve was carrying on business in Australia. And it was the first time the courts applied the ACL's definition of "goods" to include computer software.
If a US games platform can't contract its way out of the Australian Consumer Law, neither can your subscription.
This guide explains how the ACL applies to subscriptions as at October 2026, and what changes from 1 July 2027. It's general information, not legal advice.
What does the Australian Consumer Law cover?
The Australian Consumer Law (ACL) is Schedule 2 of the Competition and Consumer Act 2010. It applies to businesses selling goods and services in Australia, including overseas businesses selling to Australians.
For a subscription business, it does five main jobs:
| ACL protection | What it means for a subscription |
|---|---|
| Misleading or deceptive conduct, and false or misleading representations | Your ads, pricing page, sign-up flow, emails and cancellation screens must give an accurate overall impression of what customers are buying, what it costs and how to leave |
| Consumer guarantees | Services must be delivered with due care and skill, fit for purpose and within a reasonable time. Goods, including software, must be of acceptable quality and match their description |
| Unfair contract terms | Unfair terms in standard form consumer and small business contracts are void, and since 9 November 2023 using them can attract penalties |
| Pricing rules | Consumers must be shown a single total price you can calculate, and from July 2027 transaction-based fees must sit next to the base price |
| Unfair practices | Rules on unsolicited selling, bait advertising, harassment and more. Unsolicited consumer agreements, like door-to-door sales, carry a 10 business day cooling-off period |
From 1 July 2027, the Unfair Trading Practices Act adds a sixth: specific subscription duties plus a general ban on manipulative practices. I cover that in Australia's subscription trap laws.
Do consumer guarantees apply to subscriptions?
Yes. A subscription is just a way of paying for goods or services over time. The guarantees attach to what you supply.
For services (a cleaning plan, a monthly bookkeeping package, a coaching membership), you guarantee they will be:
- provided with due care and skill;
- fit for any purpose the customer made known, or the result they told you they wanted;
- supplied within a reasonable time, if you didn't agree on one.
For goods (a coffee subscription, a box, a device), they must be of acceptable quality, match their description and sample, and be fit for purpose. Computer software counts as goods.
When something goes wrong, the remedy depends on how serious it is. The ACCC's consumer guarantees guide for businesses sets out the detail. For a minor problem, you can fix it. For a major failure with a service, customers can generally cancel and get a refund for the unused part, or compensation for the drop in value. Customers can also claim for reasonably foreseeable losses.
A coffee subscription that goes wrong (illustrative)
A customer pays A$45 a month for two bags of beans. One month the beans arrive stale and unusable. That's likely a failure of acceptable quality. A sensible remedy is to replace the bags or credit the month, and fix the supply problem. Telling the customer "subscriptions are non-refundable" doesn't remove their rights, and could itself be misleading.
Do the guarantees apply to business customers?
This surprises a lot of B2B founders.
The guarantees apply to anyone who buys goods or services that cost less than A$100,000, or that are of a kind normally bought for personal, domestic or household use. Businesses buying for their own use get those rights on the same thresholds, as business.gov.au explains. They don't apply to goods bought for resale.
So if you sell an A$199-a-month project management tool to an architecture firm, the guarantee that your service is delivered with due care and skill most likely applies.
On top of that, small businesses (fewer than 100 employees or turnover under A$10 million) get unfair contract term protection on standard form contracts. And from July 2027 they'll get the new subscription notice and cancellation protections. My guide to unfair contract terms covers what that means for your terms.
Do I have to give refunds when someone cancels a subscription?
It depends on why they're canceling.
Change of mind. The ACL doesn't require you to refund customers who simply change their mind, unless your own terms or policy promise it. Many subscription businesses let people cancel at the end of the current billing period with no refund for the part-month. That's generally fine if it's clearly disclosed.
Something went wrong. If you've failed a consumer guarantee, the customer has rights to a remedy whatever your refund policy says.
You charged after they canceled. That's what the ACCC alleges happened to tens of thousands of HelloFresh and Youfoodz customers. If someone cancels correctly, the charge has to stop. Charging anyway invites a misleading conduct claim.
What you can't do is publish a policy that suggests customers have fewer rights than the law gives them. "No refunds under any circumstances" is the phrase that sank Valve.
Make your refund policy and pricing work together
Book a free review with a BPAG adviser to check your subscription pricing, refund provisions and GST treatment, and to find out where you need a lawyer to look at your terms.
How does misleading conduct apply to subscriptions?
The test is the overall impression your conduct creates for the people you're targeting. Fine print that contradicts a headline usually doesn't fix the headline.
Common subscription risks:
- "Free" trials that aren't. If people must enter a card and are billed automatically, the headline must make that clear.
- Hidden auto-renewal. If an annual plan renews automatically, say so next to the price.
- Monthly price for an annual commitment. If "A$29 a month" really means a 12-month contract with an exit fee, say "12-month plan" up front.
- Selective price-rise emails. The ACCC's case against Microsoft alleges it told 2.7 million subscribers to pay more or cancel, without clearly mentioning a cheaper Classic plan.
- Cancellation confirmations that aren't true. Saying "you won't be charged" when the system will charge.
What's changing in the ACL for subscriptions in 2027?
The Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 inserts a new Division 4A into Part 3-1 of the ACL, called "Subscription contracts," plus a new Part 2-4 banning unfair trading practices. Everything starts on 1 July 2027.
In short:
- Disclosure at sign-up (s 48D): a statement that it's a subscription contract and key information about payments, period, renewal, notice and how to cancel.
- Ongoing notices (s 48E): information at times set by regulation.
- Easy exit (s 48F): easy to find, straightforward, only reasonably necessary steps, and online where people can sign up online.
- Drip pricing (s 48A): transaction-based charges shown with the base price for consumer goods and services.
- No manipulation (s 28B): a general ban on conduct that manipulates consumers or unreasonably distorts their decisions and causes or is likely to cause detriment.
Penalties for companies breaching the ACL already reach the greatest of A$100 million, three times the benefit, or 30% of adjusted turnover, after a law change that took effect on 28 March 2026.
Where does GST fit in?
The ACL isn't a tax law, but pricing rules connect the two. When you sell to consumers, the total price you show generally has to include GST if you're registered. Price your plan on the ex-GST amount so you know what you actually keep. For example, an A$49 plan including GST leaves you A$44.55. The details are in GST on subscriptions and SaaS, and you can test your numbers in the free calculator.
Subscription Price CalculatorWork out a profitable monthly price after costs, GST and fees.Open the free tool →When is a subscription the wrong fit under the ACL?
Be honest about this one. If your plan only makes money when customers don't use it, or when they forget to cancel, you're building on the exact behavior the ACL now targets. In The Subscription Playbook I describe my peppermint tea subscription: a product I want, need to buy again and again, at a discount for subscribing. That's the Consumables model at its best, and it's the kind of subscription the law is happy with, because the customer keeps choosing it.
What to do next
- Rewrite your refund and cancellation policy so it's clear and consistent with the consumer guarantees.
- Check your pricing page and sign-up flow for any gap between headline and fine print.
- Review your terms for unfair clauses, especially for small business customers.
- Plan your 2027 changes: disclosure, notices and an easy cancellation flow.
- Run your flow through the AU Subscription Compliance Checker for a quick gap list.
For the bigger picture on law, tax and cash flow together, start with running a subscription business in Australia.
Free Subscription Profit Review
Australian business owners can book a free 30-minute review with a BPAG Accountants adviser. An honest conversation about:
- whether a subscription model could work for your business
- how recurring revenue could cover your fixed costs each month
- how it could lift what your business is worth
No cost, no obligation. General information only until we understand your situation.
Frequently asked questions
Does the Australian Consumer Law apply to SaaS sold to businesses?
Parts of it do. A business that buys services or software costing less than A$100,000 generally gets consumer guarantee rights, unless it's buying to resell. Unfair contract term protections apply to small businesses on standard form contracts, and from July 2027 the subscription notice and cancellation duties do too. Misleading conduct rules apply to everyone, whatever the size of the customer.
Can I exclude consumer guarantees in my subscription terms?
No. Consumer guarantees can't be excluded, restricted or modified by your terms, and saying they can is itself misleading. That was the problem in the ACCC's case against Valve, whose Steam terms said refunds weren't available in any circumstances. You can add your own warranties and policies on top, as long as they don't suggest customers have fewer rights than the law gives them.
Do I need a refund policy for a subscription?
There's no single law requiring a written refund policy, but having a clear one is smart. It should explain cancellation, any notice period, what happens to the current billing period, and how faults are handled. Make sure it doesn't say 'no refunds' in a way that suggests customers can't get a remedy when a consumer guarantee is breached.
Who enforces the Australian Consumer Law?
The ACCC enforces it nationally and focuses on widespread or serious problems. State and territory consumer agencies, such as NSW Fair Trading and Consumer Affairs Victoria, also enforce it and handle many individual complaints. ASIC enforces the equivalent protections for financial products and services. Courts and tribunals decide disputes and impose penalties.
Is there a cooling-off period for subscriptions in Australia?
Not generally. Australia has no blanket cooling-off period for subscriptions bought online. But unsolicited consumer agreements, such as door-to-door or telemarketing sales, carry a 10 business day cooling-off period, and some industries and states have their own rules. Unlike the UK, the 2027 reforms don't add a renewal cooling-off period.
General information only, current as at October 2026. It isn't legal, tax or financial advice and doesn't consider your circumstances. Speak to a qualified adviser before acting.
Talk it through with a BPAG adviser
Free for Australian business owners: a 30-minute Subscription Profit Review on whether a subscription suits your business.
Robert Coorey, MBA
Robert is the author of The Subscription Playbook and Feed a Starving Crowd and a Director at BPAG Accountants in Sydney. More about Robert.
Sources
- business.gov.au, Australian Consumer Law and your business
- ACCC, A guide to consumer guarantees for businesses and legal practitioners
- ACCC media release, Federal Court finds Valve made misleading representations about consumer guarantees (29 Mar 2016)
- ACCC, Contracts guidance for business (unfair contract terms)
- ACCC, Sales practices: a guide for businesses and legal practitioners
- Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 (No. 64, 2026)
- Treasury Laws Amendment (Doubling Penalties for ACCC Enforcement) Act 2026 (No. 19, 2026)
Facts and prices checked 27 October 2026. Spotted something out of date? Tell us.