Table of Contents
Where you sell goods to consumers, there will inevitably be situations when your customers wish to make a return. In New Zealand, several consumer law protections ensure consumers receive quality products, and they can seek a remedy if they are dissatisfied with their purchase. As a business, it is important to know the consumer remedies available to comply with your legal obligations. This article explains when consumers can return goods and how to ensure you honour your obligations under consumer law.
Your Obligations Under Consumer Law
The Consumer Guarantees Act 1993 (CGA) establishes guarantees that apply to all goods purchased from a business for personal use. Under the CGA, consumers are entitled to a remedy where the good fails to satisfy the following conditions.
|Fit for Purpose
|Goods must be fit for purpose. This means that if a consumer purchases a product with a specific purpose in mind and it does not meet that purpose, they have the right to a remedy.
|Goods must be of acceptable quality, meaning they must be free from defects, safe to use, and durable.
|Match Description and Samples
|Goods must match their description and any samples you have provided. If you advertise a product with certain features or specifications and it does not meet those claims, consumers have the right to a remedy.
It is important to note that these guarantees are not limited to new items. They apply to new and used goods, meaning that second-hand items must also meet these criteria.
Responding to a Return
Where your goods fail to comply with consumer laws, customers have the right to return the goods and receive a remedy.
The choice of remedy you offer your consumers will vary depending on factors such as the extent of the fault or whether you can easily fix the issue. You can choose the appropriate remedy if the problem is a minor fault. Accordingly, you might repair the item, which will likely come at a lower cost than offering a replacement or refund. However, if the fault is serious, the customer gets to decide which of the three remedies they want.
A problem is serious when:
- the product is significantly different from how you described it;
- a reasonable customer who knew about the fault would not purchase the product;
- the product is not appropriate for its original purpose and you cannot easily make it fit for purpose; or
- the product is unsafe.
Call 0800 005 570 for urgent assistance.
Otherwise, complete this form and we will contact you within one business day.
Timeframes for Returns
The CGA does not specify a set timeframe for consumers to return goods that do not meet the guarantees. Under the CGA, you must provide a remedy to consumers for goods that do not satisfy these guarantees for a ‘reasonable length of time’. How long is reasonable will depend on:
- product quality, which you can determine through price;
- what kind of product it is;
- how the customer uses the product; and
- how the customer maintains the product.
When Can I Decline a Return?
You are not required to accept a return or provide remedies for customers in every situation. This applies when the customer:
- simply changes their mind;
- does not use the product correctly or altered it;
- damages or disposes of it after delivery;
- knows about the fault when they buy the product;
- takes an unreasonable time to return the product; or
- experiences a problem that is out of your control, like the interference of a third party.
Going Beyond Your Consumer Law Obligations
While your business is obligated to offer remedies where your goods do not satisfy your consumer law obligations, you can offer greater protections to your consumers if you wish.
For example, many businesses allow consumers to return products where they experience a ‘change of mind’. This is particularly relevant for online retailers, where consumers have not reviewed the products in person before purchasing. You may accept returns for change of mind under certain conditions, including that the goods be returned within 14 days of purchase or that the goods must be in resalable condition.
Further, it is good practice to prepare a returns policy that outlines how you will respond to consumer requests for returns. Within this returns policy, you should set out the following:
- returns process, including any forms which a customer must complete and the return address;
- the party who is responsible for paying the return delivery costs;
- circumstances in which you will accept a change of mind (if applicable);
- instances in which you will provide a store credit;
- whether the customer must return the item in its original condition; and
- approach for the return of sales items.
Commercial disputes are costly, stressful and can damage your business reputation. LegalVision’s free Guide to Resolving NZ Business Disputes can help.
In New Zealand, consumer law offers protections to ensure that goods purchased meet certain standards of quality, fitness for purpose, and accuracy of description. If a consumer finds that their purchased goods do not meet these standards, they have the right to return the goods and seek redress, which may include a refund, replacement, or repair. However, your business is entitled to offer protections above and beyond your consumer law obligations. For instance, you might allow consumers to return products if they change their minds. Businesses should be sure to prepare a returns policy that sets out their specific approach to customer returns.
For more information about consumer rights or assistance drafting a refund policy, our experienced regulatory and compliance lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0800 005 570 or visit our membership page.
We appreciate your feedback – your submission has been successfully received.