Consumer laws and fair behaviour
Consumer law 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.
You don’t have to give a refund, repair or replace if the customer:
- changes their mind
- breaks the product accidentally or on purpose
- doesn’t follow advice – for example, washing instructions
- takes it elsewhere to be fixed before coming to you.
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 your right to investigate complaints. Find out as much as you can before deciding what remedy to offer, if any.
If you’re a retailer, it’s a good idea to display a refund sign near the till so customers and staff know which returns you’ll accept and which you’ll refuse.
You can use Consumer Protection's Consumer Rights Finder to check your obligations as a business owner or producer of products and services - for example, whether you must replace a customer's shoes if they wear out after a month.
Effective return policies
A returns policy is also called a complaint policy. It outlines when your business will offer a return, refund or replacement or when you have the right to refuse.
You can either:
- do what’s required under the Consumer Guarantees Act and other consumer laws
- do more than the legal minimum.
What “more than the legal minimum” means is up to you and the type of industry you’re in. But you can’t offer less than what’s legally required. Here are some examples:
| Business type | Legal minimum | More than the minimum |
| Clothing retailer | Accepts returns if garment is faulty | Also accepts returns if customer changes their mind |
| Cafe | Give replacement coffee if waiter spills it or it takes too long to arrive | Also give replacement coffee if customer accidentally drops it |
| Plumber | Aim to complete job on time | Also offer a discount if it's not completed within a given timeframe |
Write up your policy
Put your policy in writing – even a one-pager with key points. This means you and any staff know what to do about different types of complaint. You should include:
- how customers can make a complaint
- how to return faulty products and any costs involved
- if you offer the legal minimum or more generous terms and give details – for example returns for change of mind or longer timeframes.
Use plain language. Avoid complex technical or legal jargon. Make sure everyone understands the terms and rewrite if needed.
Make your policy public
Customers will also want to check your returns policy, so it’s a good idea to share at least the key points. Think about how you’ll do this. Options include sharing it:
- on your website
- by the till
- on receipts
- in sales agreements
- in packages delivered to customers.
This is particularly useful if a customer is asking for more than you are legally required to do to resolve a complaint.
When you must give a remedy
Minor problems
If it’s a smaller problem, for example, 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 or refund.
It’s up to you which to offer. If the customer refuses your choice and asks for a different remedy, you can either agree or politely refuse.
If you offer to repair minor faults, either fix it promptly yourself or arrange for it to be promptly fixed elsewhere and pay for the repairs.
Major problems
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.
For example, if a customer complains about a fridge repeatedly breaking down, you might replace the fridge or give a full refund.
You might also pay for:
- replacing spoiled food
- a service call-out fee
- transport costs to return the fridge.
If someone complains that a poorly installed window lets rain into their house, you might re-install the window at no extra cost, or pay a full refund. You might also fix any water damage to walls or flooring
If a customer asks for repairs, you could offer a temporary replacement to use in the meantime. Make sure customers know the timeframes involved — and the scale of the faults to be fixed. Repairs must be carried out promptly, but a serious fault may take longer to fix than the customer is prepared to wait.
Effective complaints process
Make it as easy as possible for customers to raise complaints, and for your business to record and resolve problems.
Whatever the complaint, you should:
- handle it promptly and politely
- gather as much information as you need to decide on a fair solution
- remember a fair solution might mean not giving a refund, repair or replacement.
You can also show customers you want to improve your service and deal with any problems by:
- inviting customer feedback – for example, a suggestion box or survey
- displaying your returns policy
- asking customers who complained for feedback on how the complaint was handled.
To help, use the complaints checklist and complaint record form templates on this page.
How to handle a complaint
- Step01
Tell the customer who will deal with their complaint from start to finish
That person, whether it’s you or a trusted staff member, then follows steps two to seven.
- Step02
Record the customer's contact details, details of the problem and other background information
This might include:
- date of the sale
- when the problem arose
- if the problem could be due to overuse or incorrect use
- the customer’s version of what was said during the sale, and your staff’s version.
- Step03
Find out if faulty products can be fixed
If the product is faulty, this might mean sending it back to the manufacturer. If it’s a complaint about the standard of your services, this might mean redoing the work or offering a refund.
- Step04
Check your legal requirements
Always check if the remedy you plan to give meets your legal requirements.
- Step05
Discuss what will happen next with your customer
If they ask for more than you are prepared to offer, explain your position politely but firmly. It might be helpful to keep our visual guide to consumer rights handy.
- Step06
Follow through with resolution
Do what you say you’ll do, whether it’s giving a remedy or not.
- Step07
Templates to handle complaints
Use these templates so you, your staff and your customers know how complaints will be handled.
Customer complaint form
Use this form to record details of complaints. You can print it out or edit it on your computer or smartphone. Keep these records to help you know how to handle future complaints and sport any recurring issues.
Complaint process checklist
Use this list to make sure you handle complaints fairly and follow all required steps. It’s particularly useful for complaints about a serious fault with a product or service. You can print it out and check off each step,or edit it on your computer or smartphone.
Refund policy sign
Download the refund policy sign to print out and display in your business.
Extended warranties
Think carefully before offering extended warranties.
Consumer Protection and other consumer rights organisations advise customers to not buy these. This is because consumer laws offer long-lasting protection against things going wrong, especially for expensive items like vehicles or high-end laptops.
An extended warranty also involves a lot of extra paperwork. Under the Fair Trading Act, you must give customers a written description of:
- extra rights the warranty gives on top of the Consumer Guarantees Act
- how much it costs
- when it starts and expires
- terms and conditions to follow to keep the warranty valid
- cancellation period.
But if you’re buying something for your business, the supplier may contract out of the Consumer Guarantees Act. If they do, it’s worth looking into an extended warranty in some cases, like if you’re buying a vehicle for your business.
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