A survey by consumer watchdog Choice found that 52 per cent of shoppers are unaware of their rights regarding the purchase and return of products.

As Australia observed Boxing Day, which includes the return to stores of unwanted gifts, Choice reminded consumers that the No Refund sign on retailers' register is illegal.

Choice spokeswoman Ingrid Just pointed out that entitlement to a refund on a faulty product covers on sale items. She stressed that it is the retailer's duty to deal with the manufacturer about the faulty product, not the buyer's obligation.

Purchases made in cash must be refunded back in cash, while those bought using a credit card or EFTPOS should have their account credited with the amount of the item in question.

However, Ms Just clarified that retailers are not obliged to return unwanted Christmas gifts, but owners could still talk to the stores to find out what they could do about the item. She added a receipt or proof of purchase is also needed for such products.

Ms Just added that consumers could exchange a faulty product with a working one of opt to have it fixed. Retailers are also not mandated to refund or exchange an item if the buyer changed his mind and did not like the colour or fit of the product.