Originally Posted by
ChameleonSystems
UK law, Distance Selling Regulations
You have to state in you listing that the buyer is expected to return the item before any refund can be given. Then they have to return it. If you don't make the buyer aware of this fact then they don't have to return it and the seller has to collect the item at the sellers expense.
If the item is faulty, the seller has to refund all costs including return postage. If the buyer just changes their mind (and the item is not faulty or damaged), then the buyer has to pay for return postage; but you have to state this in your listings.
Thats it in short. The longer version with all the grit is on the trading standards website.
What happens in Aus I don't know, but this is the position in the UK.