Creating A Customer Complaints Policy: Essential Australian Business Guide

Happy customers fuel sustainable growth. But even with great products and friendly service, complaints will sometimes happen. A clear, fair customer complaints policy gives you a roadmap for handling issues calmly, protecting your brand, and demonstrating compliance with Australian law.

If you’re a small business owner, you might be wondering what to include, whether a policy is legally required, and how to make it practical for your team. The good news: with a few simple steps-and the right supporting documents-you can turn complaints into opportunities to improve and retain customers.

In this guide, we’ll walk through what a customer complaints policy is, how to build one for your business, the key Australian legal requirements to consider, and best-practice tips for rolling it out with confidence.

What Is A Customer Complaints Policy?

A customer complaints policy sets out how your business receives, assesses, and resolves complaints. It tells customers what they can expect and gives your team a consistent process to follow.

Most policies cover:

• How a customer can lodge a complaint (online form, email, phone, in-store)
• Who handles the complaint and when it is escalated
• Step-by-step investigation and resolution process
• Expected timeframes for acknowledgements and updates
• How decisions are communicated to the customer

Why it matters: beyond good customer experience, complaint handling connects directly with your obligations under the Australian Consumer Law (ACL)-including guarantees for goods and services, and rules against misleading or deceptive conduct. A clear procedure helps you respond consistently and fairly when issues arise.

Do Small Businesses Really Need One?

Yes, even if you’re a sole trader or micro business. A simple, practical policy will help you:

• Show customers you take complaints seriously and act transparently
• Give staff a clear script and steps to follow (consistency reduces risk)
• Spot patterns and fix root causes across products or processes
• Keep records that show you’ve acted fairly if a matter escalates
• Reduce the chance of disputes spiralling into reputational damage or legal claims

Think of it as a playbook: when emotions are high, your team won’t be guessing what to do-they’ll have a measured process to follow.

Step-By-Step: How To Build Your Complaints Policy And Procedure

1) Make It Easy To Find And Easy To Read

Use plain English and keep it accessible on your website, in-store, or by request. Many businesses also include a link in order confirmations or customer onboarding emails. If you operate online, consider pairing your policy with clear Website Terms and Conditions so customers can easily find all service and support information in one place.

2) Set Clear Lodgement Channels

Tell customers how to complain and what information helps you investigate (for example, order number, dates, photos, and a short description of the issue). Common channels include:

• Online form or dedicated email address
• Phone support during business hours
• In person at your store or office
• Direct messages via social media (if you actively support that channel)

3) Define Internal Roles And Timeframes

Map the journey from receipt to resolution-then be realistic about timeframes. For example:

• Acknowledge receipt within 1–3 business days
• Assign to the appropriate handler (team lead or owner)
• Investigate the facts (check records, speak with staff, gather evidence)
• Decide on a remedy (repair, replace, refund, or other appropriate outcome under the ACL)
• Communicate the outcome with next steps and timing

It’s better to set clear expectations (and provide updates if you need more time) than to leave customers in the dark.

4) Link Remedies To The ACL (Without The Jargon)

Explain, in plain English, how your business approaches refunds, repairs, and replacements consistently with consumer guarantees. Consider whether your products or services warrant an additional Warranties Against Defects Policy that sits alongside your complaints procedure. Consistency across your policy and customer-facing documents reduces confusion and risk.

5) Set A Fair Escalation Path

Not every complaint will resolve at the first step. Outline how customers can ask for a review or escalate internally (for example, to a manager). You can also note appropriate external avenues where relevant-such as a state or territory fair trading agency or the relevant industry ombudsman (for example, energy, telecommunications, or financial services). These bodies are better placed than the ACCC to help with individual disputes.

Tip: be careful not to suggest the Australian Competition and Consumer Commission (ACCC) will resolve an individual complaint. The ACCC focuses on systemic consumer law issues and enforcement; individual dispute resolution is generally handled by fair trading bodies or industry schemes.

6) Keep Records

Maintain a simple complaints register with dates, summaries, actions taken, and outcomes. Good records help you manage timeframes, identify trends, and show you acted fairly if a matter escalates.

7) Fit The Policy To Your Business

The best complaints policy is the one your team will actually use. If you run a small operation, keep it concise and pragmatic. As you scale, you can add layers (like triage, specialised handlers, or SLA-style timeframes). If in doubt, it’s worth a short check-in with a lawyer to tailor the policy for your model and risk profile.

What Are The Legal Requirements In Australia?

There isn’t a single law that forces every business to have a written complaints policy. However, several legal obligations shape how you should handle complaints and what you must communicate to customers.

Australian Consumer Law (ACL)

The ACL sets out consumer guarantees for goods and services, bans misleading or deceptive conduct, and requires fair dealings with customers. Your complaints procedure should support these obligations-for example, by guiding staff on when a repair, replacement, or refund may be required.

To reduce risk, align your policy with your core customer documents (for example, Terms of Trade or Terms of Sale) and ensure marketing statements are accurate and consistent with your obligations around representations and refunds. If you need help setting up processes or training staff on misrepresentations and guarantees, consider speaking with a consumer law lawyer.

Privacy And Data Handling

If you collect personal information during the complaints process, consider your privacy obligations. Many small businesses are exempt from the Privacy Act 1988 (Cth) and the Australian Privacy Principles (APPs), unless they meet specific criteria (for example, earning more than $3 million annually, providing certain health services, or handling tax file numbers). Even if the APPs don’t apply, it’s good practice to transparently explain how you collect, use, and store complaint information, and to secure it appropriately.

Where the APPs do apply to your business, you’ll need an up-to-date Privacy Policy and internal processes that align with the APPs (like access and correction, data security, and clear notices at collection).

Industry Codes And Ombudsmen

Some sectors must follow mandatory dispute resolution standards or codes (for example, telecommunications, energy, insurance, financial services, and NDIS). If you operate in a regulated industry, check whether you need a specific complaints process and whether you must provide access to an external dispute resolution scheme. Your policy should reflect those additional requirements in plain English.

Fair Trading Bodies vs ACCC

If a complaint can’t be resolved internally, your policy can direct customers to the right external pathways. In most cases, that will be a state or territory fair trading agency or the relevant industry ombudsman. The ACCC does not resolve individual disputes, but it may act where it identifies systemic or serious breaches of the ACL.

What To Include In Your Customer Complaints Policy

Here’s a simple structure you can adapt to your business:

• Purpose and commitment: A short statement that you take complaints seriously and will handle them fairly, promptly, and transparently.
• Scope: Who the policy covers (customers and, if relevant, authorised representatives) and the types of issues included.
• How to complain: The channels you accept (email, webform, phone, in person) and the key information that helps you investigate.
• Process and timeframes: A step-by-step outline with expected acknowledgement and resolution timeframes, plus how you keep customers updated.
• Possible outcomes: Examples of remedies consistent with the ACL-repair, replacement, refund, or other practical steps to make things right.
• Escalation: How to ask for a review internally, and suitable external avenues (fair trading or industry ombudsman) if the customer is still unsatisfied.
• Privacy and confidentiality: How you handle personal information obtained during the process, with a reference to your Privacy Policy (if applicable).
• Continuous improvement: How you log issues and use feedback to improve products, services, and training.

Your complaints policy should also align with the rest of your legal framework. For instance, if your online store sets out delivery, returns and support in its Website Terms and Conditions, your staff instructions and complaint responses should match what customers have been told.

Rolling It Out: Training, Records And Continuous Improvement

Train Your Team

A policy is only as strong as its implementation. Train frontline staff on how to:

• Identify a complaint (including when a “query” is actually a complaint)
• Remain calm, listen, and gather facts
• Set expectations and timeframes clearly
• Escalate efficiently when needed
• Apply ACL concepts in practice (e.g. when a repair vs. refund is appropriate)

If you have employees, formalise responsibilities in role descriptions and use an Employment Contract and simple internal procedures so everyone knows the process from day one.

Create Simple Tools

Set up a shared complaints inbox, a webform, and a lightweight register (for example, a spreadsheet or CRM workflow). Templates for acknowledgements, updates, and outcomes can help staff respond consistently under pressure.

Track And Learn

Review complaint data regularly (for example, monthly or quarterly). Look for recurring themes-product quality, delivery timeframes, unclear instructions-and fix root causes across your systems. Where appropriate, update your Terms of Trade or customer onboarding materials to align expectations and reduce confusion.

Keep Your Documents In Sync

Your complaints policy should sit neatly with your broader customer legal framework. For many businesses, that includes:

• Terms of Trade or Terms of Sale for how you deliver goods or services
• Website Terms and Conditions for online sales or customer portals
• Privacy Policy (if the APPs apply to you) and any notices you use at the point of collection
• Warranties Against Defects Policy if you offer additional warranties beyond the ACL guarantees

If you’re unsure what you need, a quick legal health check can map your risk areas and documents, so everything works together.

When And How Should You Escalate?

Set thresholds for escalation (for example, complaints alleging safety issues, discrimination, privacy breaches, or potential ACL non-compliance). In those cases, escalate immediately to a manager or the business owner, seek advice, and consider whether external reporting is required under any applicable code or law.

If internal resolution fails, your policy can point customers to state or territory fair trading agencies or an industry ombudsman (such as telecommunications, energy, or financial services). This is generally the right pathway for individual disputes, rather than the ACCC.

Practical Tips To Reduce Complaints (And Resolve Them Faster)

• Set clear expectations up front: Friendly, plain-language sales pages and order confirmations reduce confusion later. Align these with your Website Terms and Conditions and in-store materials.
• Offer simple channels: Make it easy to contact you, and always acknowledge receipt quickly (even if the full investigation takes longer).
• Empower your team: Allow frontline staff to make small gestures (like a partial refund or expedited re-shipment) within set limits to resolve issues on the spot.
• Communicate early, communicate often: If timeframes slip, say so, and give a new realistic date. Silence breeds frustration.
• Close the loop: After resolution, confirm the outcome and ask for feedback. This builds trust and shows you value the relationship.

Key Takeaways

• Every Australian business benefits from a simple, accessible complaints policy that outlines how customers can complain, how you handle issues, and when you’ll respond.
• Align your process with the Australian Consumer Law, and use clear remedies (repair, replacement, refund) that reflect your obligations.
• If privacy laws apply to your business, support your process with a compliant Privacy Policy and secure handling of complaint information.
• The ACCC does not resolve individual disputes-your policy should instead identify the right fair trading body or industry ombudsman for external escalation where appropriate.
• Keep your complaints policy in sync with core documents like Terms of Trade, Website Terms and Conditions, and any Warranties Against Defects Policy.
• Train staff, keep a simple register, and review trends regularly-most issues can be prevented or resolved faster with clear processes and good communication.

If you’d like a consultation on creating a customer complaints policy and procedure for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.