When you must provide a remedy to a customer’s problem — and times when it’s fair to turn down a complaint.
The Consumer Guarantees Act (CGA) says customers can get a replacement, repair or refund for:
- faulty products
- substandard services
- late deliveries
- being overcharged if the price wasn’t set beforehand.
But you do not have to give a refund, repair or replacement if the customer:
- changes their mind
- caused the problem either on accident or on purpose
- doesn’t follow your advice about a product’s use or care, eg washing instructions
- goes to someone else for repairs before coming to you.
You also do not have to give a remedy if the problem was caused by something beyond your control, eg an earthquake.
Obligations under the Consumer Guarantees Act
Test your returns knowledge
Act fast
The steps you must take depend on what’s gone wrong and how serious it is. But in all cases, you must act promptly. Lack of action will annoy your customer. It will also count against you if a complaint goes to the Disputes Tribunal or District Court.
This doesn’t mean immediately giving a refund, repair or replacement. It means taking the customer seriously and looking into their complaint.
It’s your right to investigate before deciding what to do. Find out as much as you can before you decide what — if any — remedy to offer. If a customer makes a complaint that seems unreasonable — or they don’t give you enough information up front — be polite but assertive.
It’s a good idea to print out our visual guide to what you must do for customers under the Consumer Guarantees Act (CGA). Pin it up where you and any staff can easily check it, eg the break room or back of the staff toilet door.
What you must do for customers
Find out more about what you must do for customers under the CGA.
Download guide: What you must do for customers under the CGA [PDF, 538 KB]
Once you know it's a valid complaint
If it’s a minor problem, eg a poorly made coffee or pen that doesn’t work, you must put it right as soon as possible. This means offering a remedy, which is either a:
- replacement
- repair
- refund.
It’s up to you which to offer.
When something is seriously wrong with a product or service, you must put it right in the way the customer chooses — after fully investigating, of course. Typically, this means a replacement or full refund. You must also cover any extra costs caused by the problem.
Fair returns policies
The best way to resolve problems quickly and fairly is to give customers clear information about your returns policy, and have an effective complaints process.
Use these templates so you, your staff and customers know how complaints will be handled:
Refund policy sign [PDF, 795 KB]
Complaint record form [PDF, 810 KB]
Complaints process checklist [PDF, 3.2 MB]
It’s up to you whether you offer the legal minimum, or more than the legal minimum. It can help foster goodwill if you are prepared to be a little more generous.
Fair returns and complaints policies(external link) — business.govt.nz
How to handle common complaints
Remedy required? No
You do not have to give a refund or other remedy, but you may choose to if you offer more than the legal minimum for customer returns.
If you display a sign that says, "no returns if a customer changes their mind", they know they can’t bring back a dress that turns out to be unflattering. If they try to return it anyway, it’s your right to refuse.
Remedy required? Yes, for valid complaints
What "important information" means varies, depending on the product or service. But it can include:
- any extra costs, eg delivery charges
- special care or maintenance instructions
- start and end dates for services
- cancellation period for door-to-door or telemarketing sales
- how to make a complaint if something goes wrong.
Make sure you and any staff are familiar with what you sell, and can talk about it without over- or underselling.
Also give customers clear information about their rights and responsibilities under consumer laws — and yours as the seller. This might be a refunds sign next to your till, a plain English contract or an easy-to-navigate website.
What you need to tell customers(external link) — business.govt.nz
Remedy required? No
All services must be carried out with reasonable care and skill. But if a customer wants you to do the work in another way, eg use a cheaper type of paint, clearly explain how the results may differ.
You don’t have to put this in writing. If someone else, eg a trusted worker or supervisor, is part of the conversation, that’s enough. But it’s a good idea to note details in an email or on the quote for the job, eg “we recommend ____ but you have chosen ____”.
If the customer goes ahead with their choice, it means they accept the risks.
Case study: Customer goes against your advice(external link) — business.govt.nz
Remedy required? Yes, for valid complaints
If a customer’s belongings or property are damaged due to a faulty product or service, you must cover extra costs caused by the problem — after fully investigating, of course.
Examples of extra costs(external link) — business.govt.nz
Remedy required? Yes, for valid complaints
Don’t tell your customer to take it up with the delivery company — they came to you, so you have to deal with it.
Ask about where the parcel was left. Check the product itself and the packaging used. Talk to the delivery company to see if anything went wrong.
Once you’re satisfied it’s a valid complaint, give the customer a replacement or refund. Then make a claim to your delivery service — or your insurance — so you’re not left out of pocket.
Reducing risk of complaints: Deliveries(external link) — business.govt.nz
Remedy required? Yes, for valid complaints
Some customer complaints are down to issues that stem from your suppliers or manufacturers. Examples include:
- a faulty part or ingredient in a product you’ve made
- delayed shipments that hold up your work
- breakages caused by your courier.
Once you’ve confirmed it’s a genuine complaint, give your customer a remedy — or let them know you are working with your supplier to resolve the problem. Update them regularly.
Consumer problems caused by suppliers
Reducing risk of complaints: Supply chains(external link) — business.govt.nz