{"id":202784,"date":"2021-02-24T17:34:16","date_gmt":"2021-02-24T04:34:16","guid":{"rendered":"https:\/\/legalvision.co.nz\/?p=202784"},"modified":"2026-02-13T16:52:23","modified_gmt":"2026-02-13T03:52:23","slug":"delivery-cost-customer-returns","status":"publish","type":"post","link":"https:\/\/legalvision.co.nz\/regulatory-and-compliance\/delivery-cost-customer-returns\/","title":{"rendered":"Who Pays the Delivery Cost When My Customer Returns a Product?"},"content":{"rendered":"\n<p>Managing deliveries successfully, especially when dealing with customer returns, can be a significant way for your business to drive customer satisfaction. As a business, you have to meet certain legal obligations under consumer law, including the <em>Consumer Guarantees Act 1993<\/em> (<strong>CGA<\/strong>) and the <em>Fair Trading Act 1986 <\/em>(<strong>FTA<\/strong>), when handling returns. <\/p>\n\n\n\n<p>However, you can choose to go above this minimum if you wish. Taking responsibility for mistakes and resolving product issues efficiently can help build trust and foster goodwill for your business. Therefore, you should duly consider how your business will handle returns. A key point when a customer sends back a product is the delivery cost for returns. Do you pay for shipping, or does the customer? This article will answer that question and some other elements to consider regarding how your store handles product returns.<\/p>\n\n\n    <div class=\"my-7 lg:my-10 border-y-2 border-gray-100 py-7 lg:py-10 flex flex-col sm:flex-row items-start gap-10\">\n                    <img decoding=\"async\" class=\"w-52 mx-auto my-0! rounded\" src=\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/2\/2022\/02\/21064805\/online-business-nz.jpg\" alt=\"Front page of publication\"\n                 loading=\"lazy\" width=\"208\" height=\"298\">\n                <section>\n            <div class=\"text-2xl font-bold\">Guide to Starting an Online Business in New Zealand<\/div>\n            <div class=\"body-text\">\n                <p>This guide will help you learn how to launch your new online business.<\/p>\n            <\/div>\n            \n\n<a href=\"https:\/\/go.legalvision.com.au\/online-business-nz-guide.html\" class=\" block px-5 py-3.5 max-w-fit bg-orange button__hover transition rounded text-white font-bold text-lg no-underline uppercase leading-tight text-center\" target=\"\" rel=\"\">Download Now<\/a>        <\/section>\n    <\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\">When Can a Customer Send Back a Product?<\/h2>\n\n\n\n<p>Consumer law provides specific scenarios <a href=\"https:\/\/legalvision.co.nz\/regulatory-and-compliance\/consumer-return-goods\/\">when customers can return a product<\/a>&nbsp;and expect some kind of remedy, and when they cannot. In essence, if you break one of your consumer guarantees regarding the product, then New Zealand consumer law obliges you to provide a remedy.<\/p>\n\n\n\n<p><a href=\"https:\/\/legalvision.co.nz\/regulatory-and-compliance\/consumer-guarantees-products\/\">Consumer guarantees<\/a> mean that, in selling a consumer product, you guarantee to your customers that the product:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>is fit for its intended purpose;<\/li>\n\n\n\n<li>is of acceptable quality (i.e. free from minor defects with an appropriate finish and is durable);<\/li>\n\n\n\n<li>matches your description of it;<\/li>\n\n\n\n<li>is the same as any sample or demonstration models you advertise;<\/li>\n\n\n\n<li>will be delivered in good condition and on time;<\/li>\n\n\n\n<li>is sold at a reasonable price if there were no predetermined prices; and<\/li>\n\n\n\n<li>is sold legally.<\/li>\n<\/ul>\n\n\n\n<p>If you break one of these guarantees, then you have to provide a remedy, usually in the form of a:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>repair;<\/li>\n\n\n\n<li>replacement; or<\/li>\n\n\n\n<li>refund.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Situations Where You Do Not Need to Provide a Remedy<\/h2>\n\n\n\n<p>Outside of the consumer guarantees, however, customers do not have the right to demand a remedy from you. Offering a remedy in these cases is optional and can depend on factors such as customer loyalty, the value of the item, or your brand\u2019s returns policy. While there is no legal obligation (unless you have promised this in your own <a href=\"https:\/\/legalvision.co.nz\/e-commerce\/what-are-the-legal-requirements-for-a-returns-policy-online-in-new-zealand\/\">returns policy<\/a>), providing goodwill gestures may still help preserve customer relationships. You can decide to provide or withhold remedies in these instances as it suits your business. Such examples are when:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>a customer&nbsp;changes their mind;<\/li>\n\n\n\n<li>they damage or break the product after delivery, whether by accident or on purpose;<\/li>\n\n\n\n<li>customer misuse occurs (such as not reading provided instructions) that leads to product damage;<\/li>\n\n\n\n<li>the customer buys a faulty product despite knowing about the fault;<\/li>\n\n\n\n<li>an unreasonably significant amount of time has passed before the customer reports the defect; or<\/li>\n\n\n\n<li>the fault occurs due to circumstances out of your control, such as third-party interference.<\/li>\n<\/ul>\n\n\n\n<div  class=\"box box--icon box--info\">\n    <p>For example, say that you sell fragile glass ornaments and label them as such, specifying instructions for use. However, a customer disregards those warnings and breaks the ornament through their misuse. In this case, you likely would not have to provide a remedy.<\/p>\n<\/div>\n\n\n\n<p>However, even where no CGA remedy is required, the FTA still applies. You must not:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>mislead customers about their right to return goods;<\/li>\n\n\n\n<li>falsely claim that \u201cno refunds are available\u201d when the CGA would apply; or<\/li>\n\n\n\n<li>represent that return shipping must always be paid by the customer if this is not legally correct.<\/li>\n<\/ul>\n\n\n\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular fa-arrow-down\"><\/i>\n<\/a>\n<div class=\"px-6 pt-10 pb-12 mb-10 text-center bg-gray-100 rounded-b-xl sm:px-12 test\">\n    <div class=\"mb-8 text-2xl font-bold text-orange\">\n        Need legal advice?\n        <br>\n        <span class=\"text-lg not-prose\">\n                            Call <a href=\"tel:+64800005570\" class=\"not-prose\">0800 005 570<\/a> for urgent assistance.\n                <br>\n                Otherwise, complete this form, and we will contact you within one business day.\n                    <\/span>\n    <\/div>\n\n    \n\n<div class=\"not-prose flex justify-center text-left gform_input_bg_white    \">\n    <script>\nvar gform;gform||(document.addEventListener(\"gform_main_scripts_loaded\",function(){gform.scriptsLoaded=!0}),document.addEventListener(\"gform\/theme\/scripts_loaded\",function(){gform.themeScriptsLoaded=!0}),window.addEventListener(\"DOMContentLoaded\",function(){gform.domLoaded=!0}),gform={domLoaded:!1,scriptsLoaded:!1,themeScriptsLoaded:!1,isFormEditor:()=>\"function\"==typeof InitializeEditor,callIfLoaded:function(o){return!(!gform.domLoaded||!gform.scriptsLoaded||!gform.themeScriptsLoaded&&!gform.isFormEditor()||(gform.isFormEditor()&&console.warn(\"The use of gform.initializeOnLoaded() is deprecated in the form editor context and will be removed in Gravity Forms 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However, if it was a minor fault, you get to decide what kind of remedy you wish to provide.<\/p>\n\n\n\n<p>For example, you may decide to send the customer spare replacement parts rather than <a href=\"https:\/\/legalvision.co.nz\/regulatory-and-compliance\/refund-customer-breaks-product-nz\/\">issuing a brand new replacement product or refund<\/a>.<\/p>\n\n\n\n<p>If the fault was significant, the customer can choose which kind of remedy they want. You must reimburse them for any reasonable loss caused by the serious product defect, which the delivery cost for returns would likely come under.&nbsp;<\/p>\n\n\n\n<p>For example, a customer might pay for delivery costs initially when they send an item to you for repair after it has broken. But, they may be able to claim back that cost from you later.<\/p>\n\n\n\n<p>A fault is significant when:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>the product is unsafe;<\/li>\n\n\n\n<li>a reasonable customer would not have bought the product if they had known about the fault beforehand;<\/li>\n\n\n\n<li>the product is significantly different from descriptions or demonstrations you gave; or<\/li>\n\n\n\n<li>the product is substantially unfit for its intended purpose.<\/li>\n<\/ul>\n\n\n\n<p>In addition to the CGA, the FTA affects how you communicate responsibility for delivery costs. For example if you advertise \u201cfree returns\u201d or \u201chassle-free returns\u201d, you must honour that representation or clearly disclose any limits. You must not hide return shipping costs in fine print if the overall impression suggests returns are free.<\/p>\n\n\n\n<p>In addition, the <a href=\"https:\/\/legalvision.co.nz\/commercial-contracts\/unfair-contract-terms-implications\/\">unfair contract terms<\/a> (UCT) regime under the FTA restricts businesses from including one-sided or overly harsh return clauses in standard form consumer contracts. For example, a term that automatically requires customers to pay all return delivery costs in every situation, regardless of fault, may be at risk of being considered unfair.<\/p>\n\n\n\n<div  class=\"box box--icon box--info\">\n    <p>This is particularly the case where the term creates a significant imbalance in the parties\u2019 rights, is not reasonably necessary to protect your business\u2019 legitimate interests, and would cause detriment if relied upon. Ensuring your returns and delivery cost terms are transparent, proportionate, and easy to understand helps reduce UCT risk.<\/p>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Do What is Right For Your Business<\/h2>\n\n\n\n<p>As long as you provide the legal minimum (righting broken consumer guarantees with their appropriate remedy), then this is enough to meet your consumer law obligations.&nbsp;<\/p>\n\n\n\n<div  class=\"box box--icon box--info\">\n    <p>For example, say a customer calls your business saying that a pair of headphones they bought from you stopped working soon after purchase. You can choose to send a pre-paid postage label to cover their delivery costs. Or, they can cover delivery costs when they send the headphones to you for inspection. You would later reimburse them for that cost after you confirm that the headphones are faulty.<\/p>\n<\/div>\n\n\n\n<p>Either of these options is acceptable. However, consider the kind of customer relationship you want to foster. If a customer remembers that you handled their return free-of-charge without the inconvenience of arranging postage, they may be more inclined to do business with you in the future. Clear communication is key. Let customers know exactly how to initiate returns, how long it will take to process, and who is responsible for which costs. A concise, well-written returns policy helps avoid miscommunication and sets expectations.<\/p>\n\n\n\n<p>Unfortunately, this may also impose an unnecessary cost on your business. Therefore, you need to weigh up the costs of your returns process against customer satisfaction and decide how you want to manage this balance. What is fair for your business, and what kind of service do you want to provide your customers? Outline whatever you decide in your&nbsp;returns policy&nbsp;or&nbsp;terms and conditions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Key Takeaways<\/h2>\n\n\n\n<p>If a customer returns a product because they changed their mind, you do not have to cover the delivery cost for that return. However, if they are returning a product because of a significant fault, then you either have to pay for delivery costs initially or reimburse them after the fact. You must not mislead customers about their return rights or delivery costs under the FTA.<\/p>\n\n\n\n<p>Proactively reviewing your return and delivery policies every 6-12 months ensures they remain aligned with legal changes, operational realities, and customer expectations. Policies that were cost-effective last year may need adjusting as postage rates, fuel surcharges, or your product range evolve.<\/p>\n\n\n\n<p>If you would like more information or help with your returns process, LegalVision provides ongoing legal support for NZ businesses through our fixed-fee legal membership. Our experienced <a href=\"https:\/\/legalvision.co.nz\/regulatory-lawyers-lp\">regulatory and compliance lawyers<\/a> help businesses manage contracts, employment law, disputes, intellectual property and more, with unlimited access to specialist lawyers for a fixed monthly fee. To learn more about LegalVision\u2019s legal membership, call <a href=\"tel:+64800005570\" class=\"AVANSERnumber dynamic-number\">0800 005 570<\/a> or <a href=\"https:\/\/legalvision.co.nz\/membership\/\">visit our membership page<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Frequently Asked Questions<\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1769662968573\"><strong class=\"schema-faq-question\">Does my business pay delivery costs on customer returns?<\/strong> <p class=\"schema-faq-answer\">Whether your business pays delivery costs on customer returns depends on why they are returning their purchase. If the product is faulty and they are returning it for repair, they can claim back delivery costs from you.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1769662982239\"><strong class=\"schema-faq-question\">Can my returns policy limit customer rights?<\/strong> <p class=\"schema-faq-answer\">No. While you can set conditions for change-of-mind returns, you cannot exclude or restrict rights under the <em>Consumer Guarantees Act<\/em>, and you must not mislead customers about their rights under the <em>Fair Trading Act<\/em>.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1769663001984\"><strong class=\"schema-faq-question\">What does \u201cfree returns\u201d mean?<\/strong> <p class=\"schema-faq-answer\">\u201cFree returns\u201d generally means that customers do not have to pay delivery costs for returning products. This would apply to items that they have changed their mind about or just wanted to return because they had the wrong size.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1769663011636\"><strong class=\"schema-faq-question\">When can a customer return a product?<\/strong> <p class=\"schema-faq-answer\">A customer can return a product if it is faulty and expect some kind of remedy. If that fault is serious, or the product is substantially not fit for purpose, they get to choose what kind of remedy they get.<\/p> <\/div> <\/div>\n<div class=\"not-prose m-feedback-prompt\">\n    <!-- Thumbs up\/down bar -->\n    <div class=\"m-feedback-prompt__main\">\n        <div class=\"m-feedback-prompt__title\">Was this article helpful?<\/div>\n        <div>\n            <!--span class=\"m-feedback-prompt__button--text\">Thanks!<\/span-->\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--yes\"\n                    data-analytics-link=\"feedback-prompt:yes\" aria-label=\"Agree\">\n                <i class=\"fa-regular fa-thumbs-up fa-3x\"><\/i>\n            <\/button>\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--no\"\n                    data-analytics-link=\"feedback-prompt:no\" aria-label=\"Disagree\">\n                <i class=\"fa-regular fa-thumbs-down fa-3x\"><\/i>\n            <\/button>\n        <\/div>\n    <\/div>\n\n    <!-- Feedback form -->\n    <div class=\"m-feedback-prompt__form\">\n        <div class=\"m-feedback-prompt__form--thanks \">\n            <div>Thanks!<\/div>\n            <p>\n                We appreciate your feedback \u2013 your submission has been successfully received.            <\/p>\n        <\/div>\n        <form id=\"contact-form\" class=\"m-feedback-prompt__form--form\" action=\"\" method=\"post\">\n            <input type=\"hidden\" id=\"authenticity_token\" name=\"authenticity_token\" value=\"ed19fd34f0\" \/><input type=\"hidden\" name=\"_wp_http_referer\" value=\"\/api\/wp\/v2\/posts\/202784\" \/>            <input value=\"https:\/\/legalvision.co.nz\/regulatory-and-compliance\/delivery-cost-customer-returns\/\" type=\"hidden\" name=\"currenturl\"\n                   id=\"currenturl\">\n            <input value=\"Who Pays the Delivery Cost When My Customer Returns a Product?\" type=\"hidden\" name=\"currenttitle\"\n                   id=\"currenttitle\">\n            <label>\n                <!-- display on thumbs-up -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--yes\">\n                    Can you tell us <span class=\"font-semibold\">why<\/span> you found it helpful?\n                <\/span>\n\n                <!-- display on thumbs-down -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--no text-lg\">\n                    How can we better improve this article?\n                <\/span>\n                <textarea name=\"feedbackmessage\" id=\"feedbackmessage\" required><\/textarea>\n            <\/label>\n\n            <div class=\"m-feedback-prompt__form--error\" id=\"form-submit-error\"><\/div>\n            <button id=\"submit-contact-form-button\" type=\"submit\" name=\"commit\" class=\"m-feedback-prompt__form--submit\"\n                    data-analytics-link=\"feedback-prompt:submit\">\n                Submit            <\/button>\n        <\/form>\n    <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Managing deliveries successfully, especially when dealing with customer returns, can be a significant way for your business to drive customer satisfaction. As a business, you have to meet certain legal obligations under consumer law, including the Consumer Guarantees Act 1993 (CGA) and the Fair Trading Act 1986 (FTA), when handling returns. However, you can choose<a href=\"https:\/\/legalvision.co.nz\/regulatory-and-compliance\/delivery-cost-customer-returns\/\">Continue reading <span class=\"sr-only\">&#8220;Who Pays the Delivery Cost When My Customer Returns a Product?&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13496,"featured_media":228272,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[3,8],"tags":[25,75,85,252,253,600],"class_list":["post-202784","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commercial-contracts","category-regulatory-and-compliance","tag-small-business","tag-terms-and-conditions","tag-consumer-guarantees","tag-returns-policy","tag-remedy","tag-delivery-cost"],"acf":[],"yoast_head":"<!-- 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Cost for Customer Returns | LegalVision New Zealand"},{"@type":"BreadcrumbList","@id":"https:\/\/legalvision.co.nz\/regulatory-and-compliance\/delivery-cost-customer-returns\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/legalvision.co.nz\/"},{"@type":"ListItem","position":2,"name":"Articles","item":"https:\/\/legalvision.co.nz\/articles\/"},{"@type":"ListItem","position":3,"name":"Regulatory and Compliance Articles","item":"https:\/\/legalvision.co.nz\/category\/regulatory-and-compliance\/"},{"@type":"ListItem","position":4,"name":"Who Pays the Delivery Cost When My Customer Returns a Product?"}]},{"@type":"WebSite","@id":"https:\/\/legalvision.co.nz\/#website","url":"https:\/\/legalvision.co.nz\/","name":"LegalVision New Zealand","description":"LegalVision is a commercial law firm in NZ with a commitment to 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returns?","acceptedAnswer":{"@type":"Answer","text":"Whether your business pays delivery costs on customer returns depends on why they are returning their purchase. If the product is faulty and they are returning it for repair, they can claim back delivery costs from you.","inLanguage":"en-NZ"},"inLanguage":"en-NZ"},{"@type":"Question","@id":"https:\/\/legalvision.co.nz\/regulatory-and-compliance\/delivery-cost-customer-returns\/#faq-question-1769662982239","name":"Can my returns policy limit customer rights?","acceptedAnswer":{"@type":"Answer","text":"No. While you can set conditions for change-of-mind returns, you cannot exclude or restrict rights under the <em>Consumer Guarantees Act<\/em>, and you must not mislead customers about their rights under the <em>Fair Trading Act<\/em>.","inLanguage":"en-NZ"},"inLanguage":"en-NZ"},{"@type":"Question","@id":"https:\/\/legalvision.co.nz\/regulatory-and-compliance\/delivery-cost-customer-returns\/#faq-question-1769663001984","name":"What does \u201cfree returns\u201d mean?","acceptedAnswer":{"@type":"Answer","text":"\u201cFree returns\u201d generally means that customers do not have to pay delivery costs for returning products. This would apply to items that they have changed their mind about or just wanted to return because they had the wrong size.","inLanguage":"en-NZ"},"inLanguage":"en-NZ"},{"@type":"Question","@id":"https:\/\/legalvision.co.nz\/regulatory-and-compliance\/delivery-cost-customer-returns\/#faq-question-1769663011636","name":"When can a customer return a product?","acceptedAnswer":{"@type":"Answer","text":"A customer can return a product if it is faulty and expect some kind of remedy. 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