Legal and ethical selling

Legal and ethical selling promotes the rights of customers and protects you and your business from the risk of fines, penalties, trading restrictions and other actions by regulators.

Learn about requirements for product and service quality, pricing, and safety and find recommendations for complying with legal and ethical aspects of sales and customer service.

Legal obligations when selling

Legal obligations vary between businesses and industries and may include requirements from local, state and federal authorities.

Obligations may include:

Your business adviser, lawyer, local Chamber of Commerce or industry association can help you understand what obligations are relevant to your particular business.

Australian Consumer Law

The Australian Consumer Law sets out protections for consumers. It is administered by the Australian Competition and Consumer Commission (ACCC) and state and territory consumer protection agencies and is enforced by all Australian courts and tribunals.

The ACCC can fine, penalise or even close your business if it is reported and found to have breached the fair trading and selling terms set out in the Australian Consumer Law.

Use the ACCCs small business self-assessment checklist to help you understand and meet your obligations under the Australian Consumer Law.

Examples of ACL compliance

  • If your customer asks for an itemised bill, you must provide it free of charge.
  • If you sell goods or services worth more than $75 (excluding GST), you must give your customer a receipt.
  • If you give receipts, they must identify you (the supplier), your ABN and/or ACN (if any), what was supplied, the date of supply and the price.
  • If the goods or service does not meet a consumer guarantee (e.g. where goods are not of acceptable quality), your customer has the right to ask for a refund, replacement or repair where:
    • the goods or service is under $100,000
    • the goods are over $100,000 and normally bought for personal or household use
    • the goods are business vehicles or trailers mainly used to transport goods.
  • If there is a problem with your goods or service, your customer has the right to ask you for compensation for damages and loss if the supplier could have reasonably foreseen the problem
  • You cannot have a store policy and/or signs in store which seek to override consumer guarantee rights (for example 'no refunds' or 'no refunds on sale items'). This is unlawful.

*Reproduced from Australian Consumer Law materials available on business.gov.au and published under Creative Commons Attribution 3.0 Australia Licence. © Commonwealth of Australia 2020.

Office of Fair Trading

In Queensland, the Office of Fair Trading (OFT) provides useful information about your legal obligations when selling goods and services through practices including:

  • door-to-door sales
  • telemarketing
  • lay-bys
  • pricing
  • online sales
  • unsolicited supply of goods or services
  • proof of transaction and itemised bills
  • handling of uncollected goods
  • customers you can/cannot contact.

Ethical sales practices

Ethical sales practices mean selling quality products or services at market rates that align with what your business has promoted in its offerings to customers. It also means that you and your staff are not consciously doing the wrong thing by customers.

Ethical sales practices also help ensure your business does not contravene Australian Competition and Consumer Commission (ACCC) unfair business practices.

Demonstrate good ethical sales practices by clearly defining and communicating a code of ethics and sales code of conduct .

These practices create a professional sales culture with your staff and build the trust and loyalty of your customers, which helps strengthen your business reputation.

Code of ethics

A code of ethics is a statement of business values—principles defining the way you operate, how you make decisions and how you treat all stakeholders including your customers, suppliers and industry peers.

A documented code of ethics will help you and your staff build a culture of ethical selling.

Developing a code of ethics will also help you create your own sales code of conduct.

What to include in a code of ethics

Your code of ethics might include statements such as:

  • We give our customers and suppliers honest, accurate information in a timely manner.
  • We listen to our customers' needs and wants, and align our product or service to suit our customers' preferences.
  • We encourage our customers to provide us with feedback to help our business improve and grow, so they will return again.
  • We collaborate with our suppliers to provide opportunity to build long-term and loyal relationships.
  • We compete in our market by improving our products and services, and by building our own reputation, not by damaging the reputation of our competitors.

Sales code of conduct

A sales code of conduct is designed to:

  • describe desirable and undesirable selling behaviours
  • promote high standards of practice
  • reduce the risk of fair trading breaches
  • reduce the risk of your business getting a bad reputation
  • help staff make ethical decisions.

Write your code of conduct with your staff and customers in mind. This will help you clearly define and set out the purpose and structure of the document.

What to include in a sales code of conduct

Consider these inclusions for your sales code of conduct.

  • Overview—outlines why you have created the code of conduct and how it will help your staff and customers
  • Statement of business values—principles your business stands for, the beliefs and attitudes you and your staff have in common in your business and the standards you expect your business to be measured by
  • Ethical conduct:
    • soliciting customers—how your staff find and approach new customers
    • communicating with customers—expectations for staff to interact and communicate with customers appropriate for your business and industry
    • pricing—how you calculate your product pricing
    • handling complaints and conflicts—principles and processes supporting your complaints handling policy and methods for resolving conflict
    • payment methods—terms and conditions for the various payment methods you offer customers
    • selling methods—appropriate selling steps and approaches
    • bills and accounts—your commitment to providing proof of sales transactions to your customers
    • warranties, refunds, repairs and after-sales service—the product or service guarantees you make to your customers
  • Procedures for identifying and responding to code of conduct breaches—how you will action identified or reported procedures, and how you will use this information to prevent future breaches
  • Additional information—such as a list of contacts and external, third-party sources of further information

Training your staff

Include your code of conduct in your staff training and highlight how important ethical and professional conduct is to your business.

Help your staff clearly understand what you (and the law) expect of them by using examples or scenarios that describe ethical and non-ethical selling practices.

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