Businesses who sell products or services have a right to:
- contract out (opt out) of the Consumer Guarantees Act (CGA) if the products or services they sell will be used for commercial or business purposes
- choose how to price their products or services
- refuse a consumer’s offer to buy a product or service, eg if it’s the last item in stock or the service is no longer supplied
- ask questions about and inspect any product or service a consumer says does not meet the CGA guarantees
- decide to repair, replace or refund a product, or fix a problem with a service, if the problem can be fixed – unless it's a serious problem, then you can tell them you want a refund or replacement, or cancel the service
- refuse a refund or any other remedy if a consumer changes their mind about a product or service, or damages the product after the sale
- refuse to fix a problem with a service if the fault was caused by the consumer or events outside of the service provider’s control
- be paid for products or services they sell that meet the CGA guarantees.
Businesses must not:
- knowingly sell faulty products or sub-standard services
- delay if a customer complains — they must not fob you off or put off looking into it
- refuse to deal with complaints about products that arrive damaged after being delivered. If it’s a valid complaint, they should offer a replacement or refund. They can then take it up with the courier, delivery company or insurance company directly so they're not left out of pocket.
Business guidance: Obligations under the Consumer Guarantees Act
Who is covered
The Consumer Guarantees Act (CGA) applies to consumers buying things in New Zealand, and businesses selling products or services in New Zealand.
A consumer is anyone who buys products or services that are ordinarily for personal or household use. The ordinary use may change over time, eg computers are now commonly used for personal use.
Organisations and businesses who buy consumer products or services from other businesses are also entitled to protection under the Act, unless the seller has contracted out of the CGA.
The CGA applies to any business providing consumer products or services, including:
- online traders
- finance companies
Online sellers who operate as businesses (eg on Trade Me) must make it clear to buyers that they are traders. This tells consumers that the Fair Trading Act and Consumer Guarantees Act apply.
The CGA applies to consumer products and services supplied by businesses, including if they're:
- received as a gift
- bought on credit
- bought at auction, online, door to door or other types of sales
- hired or leased.
Check you have a case
When guarantees don't apply
Consumer guarantees do not apply if you:
- buy products or services privately
- buy commercial products or services, eg industrial machinery and trucks
- buy products for resale or to use in a manufacturing process
- are in business and dealing with another business, and you have a written agreement to contract out of the CGA
- got what you asked for but simply changed your mind
- misused or altered a product in any way that caused the problem, eg not following the manufacturer’s instructions for use
- disposed of, lost, destroyed or damaged products after delivery
- knew of or were made aware of particular faults before you bought the product
- relied on anyone else's advice or conduct that caused the problem other than the service provider or their agent.
Change of mind
If you buy something online from an overseas trader, the Act might still apply, but it becomes much more difficult to resolve issues and enforce your rights.
Contracting out of the Consumer Guarantees Act
A retailer or supplier must not tell you the CGA does not apply, or try to get you to sign a contract saying it doesn't apply.
The only exception is where products or services are for a business purpose and:
- you as the buyer and the seller are in trade and agree to this
- the agreement is in writing
- it is fair and reasonable to do so.
A manufacturer can contract out of the spare parts and repair facilities guarantee, but only if consumers are told this in writing before they buy the products.
A business who tries to contract out of the CGA in any other circumstances commits an offence under the Fair Trading Act.
Misleading consumers about their rights(external link) — Commerce Commission
If things go wrong
If a business sells you a faulty product, you should first ask them to fix the problem. This might involve a refund, replacement or repair.
Every situation and product is different, but your options should include whether the product:
- can be fixed and the fault is not serious
- is serious or cannot be fixed or the retailer fails or refuses to act
- has caused damage or extra loss (consequential loss).
If you have a problem with a service, contact the service provider to start with. Explain the problem and what you would like done about it.
Poor quality or incomplete work
Common consumer issues