Know your rights
You have certain guarantees or promises for consumer products that businesses have to meet when they supply you these. If these aren’t met, you can seek a remedy from the retailer, manufacturer or provider.
See Consumer guarantees for products to find out what the guarantees are.
Products bought for personal or household use
Products normally bought for personal or household use are covered if supplied by a business. This includes second-hand products, gifts, credit, hire or lease arrangements. Some items are less obvious, such as computer software, pets, plants, electricity, gas and water.
Products for business use
The only time the CGA guarantees can be excluded (also called contracting out) is if you are acquiring consumer products for business use. The clause must be written and specifically state that the CGA is excluded. It also has to be fair and reasonable to do so, which depends on:
- type of products
- their value
- the ability of the parties to negotiate, or if it is a ‘take it or leave it’ standard form contract
- legal advice received.
A manufacturer can also contract out of the spare parts and repair facilities guarantee as long as you are told this in writing before you buy the products.
It’s an offence to contract out of the Act in any other circumstances under the Fair Trading Act. See the Commerce Commission’s Fact sheet on Misleading consumers about their rights(external link).
Deciding if a product is faulty
Acceptable quality means the products will be satisfactory in look and finish, free from small faults, last for a reasonable time, be safe to use and do everything they are commonly used for. If any faults are specifically made known to you, you can’t claim for those faults later on.
To decide if a product is faulty, these factors are used to test whether a reasonable person would think the product is acceptable, taking into account:
- who supplied the products – more risk with online sales
- the age and type of products – second-hand versus new. Second-hand products are more likely to show signs of use and may be less durable than new products
- their price – poor-quality products are usually cheaper
- statements made about their quality or condition by the salesperson or in advertising.
Remedies for faulty consumer products
If the problem can be fixed and is not serious
You must give the retailer the opportunity to:
- repair the products within a reasonable time and free of charge
- replace products of an identical type and value within a reasonable time. You only have to pay the difference if you choose a replacement of greater value
- refund the value of the products in full, in the same form as your original payment.
If a product is faulty, the retailer can’t simply offer you store credit. They must fix or replace it or give you a refund.
A reasonable time is how long it would take other traders to repair those products. But if the retailer refuses to fix the problem, or takes an unreasonable time to fix the problem, or does not succeed in fixing the problem, you can choose to:
- get the products repaired elsewhere and claim the cost of those repairs from the retailer
- reject the products and claim a refund or replacement products.
Tip: If the retailer hasn’t fixed the problem, write to him/her explaining that you are rejecting the products because they are faulty. All refunds must be paid in cash or however they were paid for originally.
If there is a serious problem with the product
You can legally:
- keep the product and claim compensation for the loss in value
- reject the product and get an identical replacement
- reject the product and ask for a full refund.
A credit note is not the same as providing a cash refund. If you have rejected products because of a serious problem and asked for a refund, you don't have to accept a credit note or an exchange of products instead of cash.
A problem with products is serious if:
- a reasonable consumer would not have bought the products if they had known about the fault
- products are significantly different from their description, sample, or demonstration model
- products are not fit for their normal or specific purpose and cannot easily be put right
- the products are unsafe.
Some relevant factors to look at when deciding if a fault is serious or not include:
- if you have only had the products for a short time then the fault is more likely to be serious
- the more expensive a product is, the more likely it is that the fault may be serious
- any claims made in the advertising, packaging or made by the seller
- if there have been any other faults -then this fault is more likely to be serious.
A series of minor faults which on their own are not substantial, may become substantial if together they add up to a loss of confidence in the reliability of a product.
The retailer must give you enough information to be able to make an informed choice about the remedies. If you choose to reject the products this must be done within a reasonable time, from the date when you should have been aware of a defect.
Compensation for extra losses (consequential loss)
If a faulty product has caused damage to your property, you can also claim compensation. But there's a limit to what you can claim. The loss must be 'reasonably forseeable'and you must minimise or avoid any extra loss if possible. Sometimes it is hard to put an amount on the loss you have suffered because the damage has affected other property. You may need to seek legal advice on this.
A retailer or manufacturer can’t opt out of consequential loss so they are not liable, unless the products are being bought for a business purpose.
Manufacturer warranties and the CGA
If the products come with a manufacturer's warranty, this guarantees that they will provide a remedy such as repair or replace products if they are faulty. If the manufacturer does not follow the terms of their warranty, you can claim for compensation from them under the CGA.
Also if there are no spare parts or repairs available and you were not told this when you bought the products then you should go back to the manufacturer.
Faulty products on credit
Although you should go to the retailer first to fix the faulty products, also let the lender know. If the retailer has gone out of business or refuses to act, go back to the lender. They are also responsible for the quality guarantees under the Consumer Guarantees Act.
Read Cancelling your credit contract to find out more.
When you can’t claim under the CGA
You can’t claim if:
- you use the products in such a way or to such an extent that a reasonable consumer would not do so; or modify, damage, lose or dispose of them
- you delay in rejecting the products – you must act within a reasonable time.
What is a reasonable delay depends on:
- the type of products
- their likely use
- the length of time it is reasonable for them to be used
- the amount of use it is reasonable for them to be put to before you discovered the defect.