Is It Legal To Sell Pre-Orders Online?

Mia runs an online homewares store in Melbourne. Her supplier says a new range of ceramic lamps will arrive in eight weeks, and customers are already asking to buy them. Taking pre-orders feels like a smart way to test demand and cover upfront stock costs.

Then the shipment gets delayed at the port. A few customers ask for refunds, one says the website promised a firm delivery date, and Mia realises her checkout page only said, ships soon.

If you sell online, pre-orders can be a great tool. You just need to be very clear about what customers are buying, when they can expect it, and what happens if things change.

Is It Legal To Sell Pre-Orders Online In Australia?

Yes, you can legally sell pre-orders online in Australia, as long as you don't mislead customers and you have a genuine basis for taking their money before stock arrives.

The main law to think about is the Australian Consumer Law, which applies to Australian businesses selling goods or services to consumers. The ACL sits in the Competition and Consumer Act 2010 and is enforced by regulators including the Australian Competition and Consumer Commission and state and territory fair trading bodies.

For pre-orders, the big legal risks usually come from:

• making delivery promises you can't reasonably support
• taking payment when you don't have reasonable grounds to believe you can supply the product
• hiding the fact that an item is a pre-order
• using an unclear refund policy
• saying no refunds when customers may have rights under the ACL

The ACL also prohibits misleading or deceptive conduct. So, if your product page makes customers think stock is ready to ship when it isn't, that can be a problem even if your intention was innocent.

A safer approach is to make the pre-order status obvious in several places: the product page, cart, checkout, confirmation email and your website terms. Don't rely on a tiny note buried in your footer.

What Do You Need To Tell Customers About A Pre-Order?

You need to tell customers the key details that would affect their decision to buy, especially that the item isn't in stock and when you expect to send it.

Think about the information a reasonable customer would want before paying. For most online stores, that includes:

• Pre-order status: say the item isn't currently available for immediate dispatch.
• Estimated dispatch or delivery timing: use clear wording, such as estimated dispatch from 15 October.
• Payment timing: say whether you take full payment now, a deposit now, or charge later.
• What happens if there's a delay: explain how you'll notify customers and what options they have.
• Cancellation and refund rights: separate your change-of-mind policy from customers' legal rights under the ACL.
• Product details that may change: flag any genuine risk, such as minor colour variation or final packaging changes.

Be careful with countdown timers, limited stock messages and launch claims. If you say only 50 units are available, you should be able to back that up. If you say delivery is guaranteed before Christmas, you need a very solid basis for that promise.

Say Mia expects her lamps to arrive at her warehouse on 1 November. A clear product page might say: This is a pre-order item. We expect to dispatch orders from 8 November, but this date may change if our supplier or freight provider is delayed. If there's a material delay, we'll email you with your options.

That kind of wording won't remove your ACL obligations, but it helps set honest expectations and reduces disputes.

Can You Take Full Payment Before Stock Arrives?

Yes, you can usually take full payment before stock arrives, but you should only do it if you have reasonable grounds to believe you'll be able to supply the product within the timeframe you've given.

Under the ACL, accepting payment without intending to supply, or without reasonable grounds to believe you can supply, can lead to serious issues. The same applies if you take payment and then don't supply within the specified time, or within a reasonable time if no time was specified.

In practice, you should have records that support your pre-sale. For example:

• a confirmed purchase order or supplier agreement with your supplier
• written supplier estimates for production or shipping
• freight or import timing information
• inventory allocation details showing how many units you can actually sell
• internal notes about how you calculated the delivery estimate

You don't need to guarantee that nothing will go wrong. Supplier delays, customs checks and freight issues happen. But you do need to avoid guessing or overpromising.

Full Payment, Deposit Or Pay Later?

Your payment model should match your risk and cash flow. Common options include:

• Full payment upfront: simple for checkout, but customers may expect stronger updates and refund options if delays happen.
• Deposit upfront: useful for made-to-order or high-value products, but your terms should explain whether any part of the deposit is refundable.
• Pay later or charge on dispatch: customer-friendly, but you may carry more stock and cancellation risk.

If you use a payment processor, also check its rules. Some providers have specific requirements for pre-orders, delayed shipping or chargebacks. Your legal terms won't help much if your payment account gets frozen because the platform thinks you're taking risky orders.

What Happens If Your Supplier Misses The Delivery Date?

If your supplier misses the delivery date, you should update customers quickly, keep clear records and offer options that match the seriousness of the delay.

The first step is to work out whether the delay is minor or material. A two-day delay after a clear update may not be a big issue. A six-week delay on a product promoted for a specific event, like Father's Day, is different.

Here's a practical order of steps:

1. Confirm the facts: get the revised supplier or freight date in writing.
2. Check what you promised: review the product page, checkout wording, ads and order confirmation email.
3. Email affected customers: explain what changed, give the new estimate and avoid blaming language.
4. Offer clear choices: this may include waiting, switching products, store credit if the customer agrees, or a refund.
5. Pause new sales if needed: don't keep selling against an estimate you no longer believe is realistic.
6. Keep records: save supplier emails, customer messages and refund decisions.

For example, Mia sold 120 lamps at $149 each with an estimated dispatch date of 8 November. On 3 November, her supplier confirms the shipment won't leave the factory until 20 November. Mia updates the product page that day, emails all 120 customers and gives them three options: keep the order with a new estimated dispatch date of 5 December, swap to an in-stock lamp, or receive a refund.

That response is much safer than staying silent and hoping customers won't notice. Silence often turns a supply issue into a trust issue.

Do Customers Have A Right To A Refund For Pre-Orders?

It depends on the reason for the refund, but you can't contract out of customers' rights under the Australian Consumer Law.

If a customer simply changes their mind, the ACL doesn't automatically require you to give a refund. You can choose whether to offer change-of-mind refunds, exchanges or store credits, as long as your policy is clear and you apply it fairly.

However, customers may have refund rights if something goes wrong in a way covered by the ACL. For pre-orders, that could include situations where:

• you can't supply the product at all
• you don't supply within the timeframe you specified, and the delay is significant
• you didn't specify a timeframe and you don't supply within a reasonable time
• the product is materially different from what was advertised
• the product is faulty or doesn't meet the consumer guarantees

A term that says all pre-orders are final or no refunds under any circumstances is risky. It may mislead customers about their ACL rights.

A better approach is to separate your business policy from legal rights. For example, you might say that change-of-mind cancellations aren't available after a certain point because stock has been ordered, but nothing in your policy limits rights under the ACL.

If you offer store credit for a delay, make sure the customer has genuinely agreed. Don't present store credit as the only option if the customer is legally entitled to a refund.

What Should Your Online Store Pre-Order Policy Include?

Your online store pre-order policy should clearly explain how pre-orders work from browsing through to delivery, refunds and customer updates.

You can include this in your online store terms and conditions, with a shorter version on the product page and checkout. A lawyer should tailor the wording before you use it, because a generic template often won't deal properly with your products, payment flow, suppliers or refund settings.

Pre-Order Policy Outline

1. Pre-order definition: explain that some products are available to order before they're in stock or ready for dispatch.
2. Product availability: say pre-orders are subject to supplier, manufacturing and freight timing.
3. Estimated dates: state whether dates are dispatch dates or delivery dates, and whether they're estimates.
4. Payment terms: explain when payment is taken and whether it's full payment, a deposit or another arrangement.
5. Order changes and cancellations: set out when customers can request changes and when your business may cancel an order.
6. Delays: explain how you'll notify customers and what options may be available if there's a material delay.
7. Refunds and ACL rights: describe your change-of-mind policy and state that nothing limits rights under the Australian Consumer Law.
8. Mixed orders: explain what happens if a cart contains both in-stock items and pre-order items.
9. Shipping costs: say whether shipping is charged once or separately if items are shipped at different times.
10. Contact process: tell customers how to contact you about a pre-order and what details to include.

Mixed orders are a common trap. If someone buys one in-stock dress and one pre-order jacket, will you ship the dress now or hold the whole order until the jacket arrives? If you don't say, customers may assume the in-stock item is coming straight away.

What Are The Common Legal Mistakes With Pre-Sale Ecommerce?

The most common mistake is treating pre-orders like normal in-stock sales, when customers actually need extra information before they pay.

Watch out for these issues:

• Vague timing: wording like coming soon or ships shortly can cause arguments if customers expected a faster delivery.
• Hidden pre-order labels: if the pre-order notice is easy to miss, customers may say they didn't know stock wasn't ready.
• Overconfident ads: social media ads can create legal risk if they promise delivery timing your website terms later water down.
• No delay process: if your team doesn't know when to email customers or offer refunds, responses can become inconsistent.
• Selling more units than allocated: don't sell 500 units if your supplier has only confirmed 300 for your business.
• Ignoring privacy obligations: if you collect customer details for waitlists, email updates or SMS launch alerts, your privacy policy, notices and consent settings need to match what you're doing.

If your business is covered by the Privacy Act 1988, or you're using marketing lists in a way that triggers privacy and spam compliance issues, your pre-order funnel should be checked as part of the same process. Even if you're a smaller business, clear consent and honest data use are good practice.

Also check your platform settings. Shopify, WooCommerce, marketplaces and payment gateways may each have their own pre-order, subscription or backorder rules. Your website terms, checkout labels and automated emails should all tell the same story.

Key Takeaways

• You can sell pre-orders online in Australia if your disclosure is clear and you have reasonable grounds to believe you can supply.
• The Australian Consumer Law is central, especially rules about misleading conduct, accepting payment and consumer guarantees.
• Delivery dates should be clear, realistic and labelled as estimates unless you're genuinely guaranteeing them.
• Your refund policy can limit change-of-mind cancellations, but it can't remove ACL rights.
• Supplier delays should be handled quickly with written updates, clear options and good records.
• Your pre-order terms should be tailored to your products, payment model, shipping process and customer communications.

If you'd like help with your pre-order terms, ecommerce refund wording, supplier delay process or online store terms and conditions, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.