Websites · Glossary
What is a restocking fee?
A restocking fee is an amount a shop deducts from a refund when a customer returns an item they no longer want, to cover inspecting, repacking and reselling it. It can only apply to change of mind returns the shop chooses to accept, never to faulty goods, and UK online sales limit it further.
Restocking fees are legal in the right place and unlawful in the wrong one. The difference is almost always why the customer is returning the item.
Nuwan Madhusanka · Co-founder
4 min read · Published
| Reason for return | Australia | United Kingdom, online sale |
|---|---|---|
| Faulty, unsafe or not as described | No fee; the consumer guarantees give a repair, replacement or refund | No fee; full refund rights apply |
| Change of mind, store policy offers returns | A fee can apply if it is in the stated policy | Within the 14 day cancellation right, no deduction unless the item was used or damaged |
| Change of mind, no returns policy | No obligation to accept the return at all | The 14 day cancellation right still applies to most goods |
| Custom made or personalised item | No change of mind obligation | Excluded from the cancellation right |
What the fee is for
Returned goods cost money even when nothing is wrong with them. Someone has to receive the parcel, inspect the item, repack or relabel it and put it back into stock, and some items can only be sold as seconds once opened. A restocking fee passes part of that cost to customers who return for their own reasons. It is most common for bulky, expensive or special order items, such as furniture, appliances and electronics.
The line consumer law draws
In Australia, the consumer guarantees mean a customer with a faulty item, one not as described or not fit for purpose, is entitled to a remedy, and a shop cannot reduce that remedy with a fee. A change of mind return is different: there is no legal right to it, so a shop may set conditions, including a fee, as long as they are clear before the sale. In the UK, GOV.UK explains that online customers can cancel within 14 days of receiving an item and have another 14 days to return it, and the trader cannot deduct fees unless the item has been used or damaged.
Making a fee fair
State the fee and its conditions on the product page or the returns policy before purchase, not after the item comes back. Keep it proportionate to the real cost, apply it only to unused items in resaleable condition, and exempt anything faulty. A clear sign saying no refunds is not a lawful way to avoid it: in Australia and the UK, telling customers they have no rights when the law gives them some is itself misleading.
Common mistakes
Charging a fee on a faulty return because the item was opened. Hiding the fee in terms that customers only see after paying. Applying a UK style fee to an online UK customer inside the cancellation window. Charging a fee for return postage and a restocking fee on top without saying so. And refusing all returns on items that the law protects.
Where it shows up in the product
When a site has a returns or refund policy, the agent's legal guide publishes the owner's own text word for word and never writes law or terms the owner did not give, so the fee, the conditions and the exemptions come from you. In an agent built shop, refunds are made in the owner's Stripe dashboard, and a full refund marks the order refunded while a partial refund, such as one less a restocking fee, leaves the order status as it was.
Questions people ask
Can a shop charge a restocking fee on a faulty item?
No. In Australia a faulty item is covered by the consumer guarantees, and the remedy cannot be reduced by a fee. In the UK, faulty goods also give a full right to a refund, repair or replacement. A restocking fee belongs only to returns a shop accepts as a goodwill policy, such as change of mind.
How much is a typical restocking fee?
There is no legal standard amount, and fees vary widely between shops and products. Some use a percentage of the price, others a fixed amount for bulky goods. What matters more than the number is that it reflects the real cost of handling the return, is disclosed before purchase and is applied the same way to every customer.
Do I have to accept change of mind returns at all?
In Australia, no. A shop can choose not to offer change of mind refunds, though many do to compete. In the UK, online and phone sales carry a 14 day cancellation right for most goods regardless of the shop's preference, with exceptions such as personalised, perishable and sealed hygiene items.
Can a restocking fee be charged on sale items?
Sale items are treated like any other item. If the shop offers change of mind returns, the same policy and any fee can apply. If the item is faulty, the customer has the same rights as at full price; GOV.UK states plainly that customers have exactly the same refund rights in a sale.
Who pays return shipping on a change of mind return?
The returns policy should say. Many shops ask the customer to pay return shipping on change of mind returns and pay it themselves on faulty items. In the UK, for online cancellations the trader must refund standard outbound delivery, but the customer can be asked to pay for sending the item back if the terms said so.
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Create a website with OneCraftRelated questions
- What is a refund policy?What is a refund policy: a shop's stated rules on returns and refunds, the consumer rights it cannot override in Australia and the UK, and what it should say.
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- What is order fulfillment?What is order fulfillment: receiving, picking, packing, shipping and confirming an online order, in house against 3PL and dropshipping, and delivery rules.
- What is buy now pay later (BNPL)?What is buy now pay later (BNPL): instalment credit at checkout where the provider pays the shop. Fees, risks and the 2025 Australian credit licence rule.
Written and checked by the OneCraft team. Last checked .