What to do when you've bought products and they don't work, break too easily or don't do what you expected them to do.

You may be covered by the Consumer Guarantees Act

You may be covered by the Consumer Guarantees Act if faulty products have problems, or are unsafe, or don’t do what they should. 

When a business supplies you with consumer products and there is a problem, you can ask them to fix the problem under the Consumer Guarantees Act (CGA). This applies to auctions, online sales, or an agent or broker who sells on behalf of someone as well. An online trader has to make it clear if they are in trade.

Common problems covered by the CGA

Include:

  • products don’t do what they meant to or are defective
  • products that differ from their description, eg on the packaging or in advertising
  • products don’t match the sample or model you were shown
  • products aren’t reasonably fit for a particular purpose you told the seller
  • the retailer did not have the right to sell you the products
  • late or no delivery or products arrive damaged in transit
  • unreasonable price for products if not agreed beforehand.

Products not covered by the CGA

Include:

  • commercial products (see Buying products and services for commercial use)
  • any products for resale in trade, use in manufacturing, or for repairs in trade
  • private sales eg garage sale, school gala or private online sellers
  • products bought by auction or competitive tender before 17 June 2014
  • real estate or land.

Please note the following section of content is possibly being delivered from an external source (IFRAME in HTML terms), and may present unusual experiences for screen readers.

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

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.

Faulty products

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. 


Please note the following section of content is possibly being delivered from an external source (IFRAME in HTML terms), and may present unusual experiences for screen readers.


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.

 

If things go wrong

Contact the retailer or service provider

Go back to the retailer or service provider as soon as you discover the problem.

Explain what the problem is and how you would like it to be resolved. Bring proof of purchase such as a receipt or bank statement or the contract for services.

Your rights and remedies under the Consumer Guarantees Act can be divided into three categories:

  • the problem can be fixed and is not serious (minor)
  • the problem is serious or cannot be fixed (serious)
  • the problem has caused damage or extra loss (consequential loss).

See 'Remedies for faulty consumer products' on the What is it tab for more information. 

It’s your responsibility to return a product.

But if postage will be expensive or complicated due to the size, height or method of attachment, then the business must collect it at its own expense. Keep your receipts to recover reasonable postage or transportation costs.

The product does not have to be in its original packaging to get a refund.

If the product is found not have a problem on inspection, you may be required to pay the transport or inspection costs (but an estimate should be provided to you first or outlined in their terms and conditions).

Go to the manufacturer

It is usually easier to go back to the retailer. But if the retailer has gone out of business or you have problems dealing with them, you may want to go to the manufacturer instead.

The manufacturer can:

  • Refund some of the purchase price if the fault has resulted in the products losing some of their value. But if the manufacturer has given you a manufacturer's warranty that they will repair or replace the products then you have to give them a chance to put the matter right.

  • Pay for any extra damage caused by the products (consequential loss) but not if the problem is caused by an event outside of human control, such as an earthquake.

Read Resolve a problem to find out more.

Safety issues with electrical or gas products

If you believe there is a safety issue with an electrical or gas product (especially if it is a generic problem) you should also advise Energy Safety(external link)


Next steps

If you are unable to resolve your issue directly with the retailer, manufacturer or service provider, our Resolve It tool has information to help you take the next steps. These may include going to the Disputes Tribunal or District Court.

Resolve it: Faulty products and services


Need more help?

Contact us for more guidance.

Common situations

Business use not covered by the Consumer Guarantees Act

Sue buys a station-wagon to use for pick-ups and deliveries for her business. Sue is covered by the Consumer Guarantees Act even though she is using the wagon in her business. This is because a station-wagon is usually bought for personal or household use. However, the trader may opt out of the Consumer Guarantees Act in writing at the time of sale because it is bought for business purposes.

Not fit for a particular purpose

Nicholas told a car dealer he needed a car powerful enough to tow a boat. He finds out the car can’t tow his boat. This is a serious breach of the consumer guarantee as to fitness for a particular purpose. He can complain to the dealer, reject the car and ask for his money back.

Exchanging a faulty product

Richard returns a faulty wireless speaker. The retailer offers to replace the product with a newer model that has more features but is more expensive. Richard agrees to the new model and pays the difference in price.

Compensation for extra loss

If Jack’s washing machine is faulty and floods downstairs, he is entitled to compensation for any damage to his wallpaper and carpet, but not the cost of his ticket to the music concert that he missed due to cleaning up the mess.