Consumer Guarantees Act (CGA)
- Step01
Who it applies to
Any person in trade or business that makes, imports or sells products, or sells services, for personal or domestic use. This includes both online and in person auctions if the seller is in trade.
- Step02
Why it's important
This act ensures that customers get what they pay for and receive a repair, refund or replacement for a faulty product or sub-standard service.
- Step03
What you must do
- Make sure deliveries arrive at the agreed time and products are in acceptable condition.
- Have spare parts available and a way to offer repairs. This might be through an arrangement with the manufacturer or a trusted repairer. If spare parts and repairs aren’t available, tell the customer before finalising the sale.
- Know when you are legally required to offer a repair, refund or replacement.
- Find out as much as you can if a customer complains before deciding what remedy to offer, if any.
You must offer products that:
- are of acceptable quality and are fit for purpose
- match the description and any samples or demonstrations given
- are sold at a reasonable price, if a price wasn’t agreed beforehand
- can be legally sold.
- Step04
What you must not do
- Knowingly sell faulty products or sub-standard services.
- Simply accept that a product or service is faulty when a customer complains. You are within your rights to investigate before deciding what to do.
- Delay if a customer complains. You must not mislead them or put off looking into it.
- Refuse to deal with complaints about products that arrive damaged after being delivered. If it’s a valid complaint, offer a replacement or refund. Then take it up with the courier, delivery company or insurance company yourself so you don’t have to fix it with your own money.
- Step05
Fair Trading Act (FTA)
Who it applies to
Any person in trade or business selling products or services, including online. You must talk fairly about what you sell — in person, in advertising or online. The Act covers pricing, advertising, information about the product or service, sales techniques and financing. It also covers product safety, trading practices and employment ads.
Why it's important
To make sure traders don’t oversell or make false promises.
What you must do
- Accurately represent your product or service.
- Make sure you and any staff are familiar with what you sell, and what it can and can’t do.
- Meet product safety rules.
- Give required information
Examples of required information are:
- if the price tag includes GST
- any extra fees
- country of origin label on new clothing and new footwear
- water efficiency rating label on certain appliances
- consumer information notice (CIN) on used vehicles
- cancellation period for extended warranties and some door-to-door or telemarketing sales – for example, to switch electricity suppliers.
What you must not do
- Oversell or otherwise mislead customers about a product or service.
- Fail to tell customers important information.
- Fix prices with other businesses or suppliers.
- Sell extended warranties as a ‘no hassle’ option against future issues.
- Refuse to collect unwanted products if it’s an unsolicited sale – for example, door-to-door or telemarketing.
How the act is enforced
The Commerce Commission carries out its own monitoring and may investigate if a customer or another business makes a complaint. If there’s evidence of a breach, the case may either:
- go to court
- be referred to another agency, like the police.
Privacy Act
Who it applies to
Any person or business that collects, uses and stores personal information.
This might be address information collected online or in person for invoices.
Why it's important
The Act ensures personal information is kept safe and secure.
What you must do
- Only collect what you need for business purposes – for example, name and contact details.
- Tell people how, when and why you’re collecting their information. This includes using cookies on your website.
- Tell people what will happen if they don’t give you their personal information.
- Keep their personal information safe.
- Only use it if you are reasonably sure it’s accurate and up to date.
- Let people see their information and correct any mistakes.
What you must not do
- Ask for more information than you need.
- Let personal information be leaked, hacked or found in any other way.
- Keep information longer than you need it or are legally required to keep it.
- Pass on someone’s details without their permission.
- Send personal information overseas without checking if it will be protected.
How the act is enforced
If you break any of these rules, even accidentally, a customer or an employee may make a complaint under the Privacy Act.
Carriage of goods and your rights
When this might be useful
This might be useful if your courier or other delivery service damages your deliveries to your customers. This doesn’t apply to postal services.
Why it’s important
For the public, the Consumer Guarantees Act covers losses if a delivery service doesn’t carry out its duties with reasonable skill or care. This law doesn’t cover businesses, but you may be able to claim under the Contract and Commercial Law Act.
How to use it
It’s a good idea to have a written contract with your delivery service. Together you must discuss and agree terms on who will cover compensation for damaged or delayed packages.
There are four options:
- Declared value risk: the delivery service will pay up to the maximum amount stated in the contract.
- Owner's risk: you’re responsible for any loss or damage, unless it’s intentionally caused.
- Declared terms: what the delivery service will pay depends on agreed terms in the contract.
- Limited carrier’s risk: the delivery service will pay up to $2,000 for each unit of goods.
If you don’t have a written contract, limited carrier’s risk applies.
When you can’t make a claim
There are many reasons why you can’t make a claim, including:
- damage due to a product fault
- damage due to inadequate packaging
- package not delivered because of a legal process – for example, seized by the police or New Zealand Customs Service.
Product safety rules
Product safety rules apply to sellers and suppliers of cigarette lighters, pedal bikes and these children’s products (both new and second-hand):
- cots and baby walkers
- children’s toys and nightwear.
The Fair Trading Act’s product safety standards cover these products. You should also check for banned products on the Unsafe Goods Notices list – for example, toys and candles that contain lead, multipurpose ladders, and chainsaws without chain brakes.
Make sure you know which products are banned and which products are covered by safety standards. If products are covered by safety standards:
- ask for proof these have passed safety tests - for example, by checking safety certificates
- make sure these products meet any labelling requirements.
Weights and Measures Act
The Weights and Measures Act applies to businesses that sell, make, process, pack or import goods to be sold by quantity. Examples are:
- apples by kilo
- firewood by cubic metre
- potting mix by litre
- railway sleepers by number.
Goods sold by weight, volume, length or number must be:
- accurately weighed, measured or counted
- clearly labelled with the correct net quantity – this means the product itself, not product plus packaging.
Equipment and processes used to weigh or measure goods must be accurate, and packages must contain at least the quantity stated on the label.
The Act also specifies which measuring units – for example, kilogram, metre or millilitre must be used for certain types of goods.
Human Rights Act
The Human Rights Act applies to everyone – you, your customers, your suppliers, your staff, and others you interact with in your business.
Under the Human Rights Act you must treat people fairly, and with dignity and respect. You can’t:
- Refuse a sale, or provide sub-standard products or services, due to someone’s gender, religious belief, race, disability and other factors. This is discrimination and it’s illegal.
- Use forced labour, child labour or pay less than the legal minimum – either in your business or in your supply chain.
Rules for motor vehicle sellers
These rules apply to any person or business that buys, sells, imports or auctions vehicles, including online sales and vehicles sold at car markets or fairs.
As a vehicle trader, you must:
- register as a vehicle trader if you intend to be in the business of motor trading, including if you sell more than six or import more than three vehicles in any 12 months.
- comply with consumer laws that apply to all retailers.
- display a consumer information notice (CIN) if selling second-hand vehicles, in its window or online listing.
- give each buyer a copy of the sales agreement.
- keep copies of sales agreements for at least six years.
- tell prospective buyers of any debts owing on the vehicle (also known as security interests) if you’re an auctioneer.
- meet requirements under the Motor Vehicle Sales Act.
Rules for financial services
These rules apply to individuals and businesses offering services and advice on money – including financial planning, insurance and investments – or selling products on credit.
As a financial service provider, you must:
- register as a financial service provider for each relevant category.
- join a dispute resolution scheme if you provide services to retail clients.
- comply with consumer laws.
- apply for a licence from the Financial Markets Authority if needed.
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