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What you need to tell customers

Whether you sell online or in person, you must tell customers important information about your products or services — and how you conduct your business.

You might need to think about:

  • clear and legally safe sales agreements
  • your website and/or social media pages
  • online payment security
  • data collection and privacy rules
  • extended warranties.

Important information

A good way to give customers important information is to put it on your website or social media page, or in posters on the walls of your store. Whatever method you choose, try to make the information clear and accurate.

Type of informationWho should include thisExamples of details to include
Contact details All business and self-employed sellers Phone, fax, email and street address - not just a PO box number
Any extra costs All business and self-employed sellers 
  • Delivery costs - if it's free, say so
  • Call-out fees
Returns policy All business and self-employed sellers  When customers can ask for returns, exchanges or refunds - remember you must meet Consumer Guarantees Act requirements
How to complain All business and self-employed sellers 
  • How customers can complain, eg in person, send an email
  • Dispute resolution scheme if your industry requires it, eg vehicle traders, financial advisors
Online shopping details If customers buy via your website
  • Currency used in prices
  • How you keep payments secure, eg SSL (Secure Sockets Layer) certificate for your website
  • Any conditions on purchases, eg parental approval if a child is the buyer
  • Which country's law applies to sales - yours, or buyer's if outside New Zealand.

Shopping online (external link) - Consumer Protection

Privacy policy If your website collects customers' personal information, eg via cookies
  • What's being collected, eg name, contact details, billing information
  • How and why you collect it
  • How long you will store it
  • If you plan to share it
  • How customers can see and correct their information
  • How to contact you
Think twice about asking online customers to pay by internet banking - it's less secure.

Think twice about asking online customers to pay by internet banking - it's less secure.

A secure checkout on your website is best. Customers will look for the padlock symbol and https:// in your URL — the ‘s’ stands for secure.

Online shopping safety tips (external link) — Netsafe

Protecting customer data

Collecting and using information about people — even a phone number and invoicing address — is an everyday part of doing business. You must:

  • Keep that information safe and secure. 
  • Only ask for the personal details you need for business purposes, eg name and contact details.
  • Only use personal information, eg email or street address, after taking reasonable steps to make sure it’s accurate and up-to-date. 
  • Respect a customer’s right to view and edit their information.
  • Get permission before passing on email addresses to another organisation or business.

If you break any of these rules — even accidentally — a customer may make a complaint under the Privacy Act.

Information privacy principles (external link) — Privacy Commissioner

If you collect personal information from your website or social media, you must tell customers how, when and why.

If you collect personal information from your website or social media, you must tell customers how, when and why.

Create a plain English privacy statement with the online tool Priv-o-matic.

Priv-o-matic (external link) — Privacy Commissioner tool

Clear and legally safe sales agreements

Contracts and sales or service agreements must be fair to both sides — the buyer and the seller. Chances are your business will be both selling to customers and buying from suppliers.

Plain language is a must.

  • Sellers: Avoid complex technical or legal jargon.
  • Buyers: Make sure you understand the terms. Ask for an explanation and a rewrite if needed.

The terms must also respect the rights and responsibilities of the buyer and the seller. Both must be able to decide:

  • any changes to important terms
  • if terms have been breached
  • if the contract should be terminated.

What to put in sales agreements

Not all the details in this table are needed for all sales agreements or contracts. But it’s a good idea to include:

  • buyer’s and seller’s details 
  • brief description of product or service 
  • price and terms of payment
  • delivery deadlines
  • other timeframes, eg start and end dates for services.

You don’t need to put in writing any conditions that are legal requirements, eg goods will be of acceptable quality (Consumer Guarantees Act), or customers will be treated equally (Human Rights Act).

Terms and conditions of contracts (external link) — Consumer Protection

What to includeThis means
Who's involved
  • Customer’s name and contact details
  • Your details, including phone, fax, email and street address — not just a PO box number
Price
  • Sum to pay
  • Any breakdowns, eg total + GST = sum to pay
  • Payment terms, eg due date
Brief description Products: This might include make, model and serial number
Services: What will be done, where and any materials used, eg landscaping the front garden, using limestone pavers and decorative grasses
Delivery details for products
  • Cost of delivery or postage and packaging — if it’s free, say so
  • Timeframes, eg within five working days, by dd/mm/20yy
Timeframes for services
  • Planned start date
  • How long it’s expected to take
Terms and conditions
  • Due date for payment
  • For products, this might include details about spare parts or any contingencies, eg a biscuit-maker might state they supply 10 per cent extra on big orders in case of any breakages
  • For services, this might include liability insurance
Terms and conditions when dealing with other businesses
  • Contract out of the Consumer Guarantees Act (CGA) if selling consumer products to another business, eg a domestic oven to a baker — if it’s not in writing, the CGA applies
  • You don’t have to contract out — some businesses offer remedies or promises above what’s required by law
Customer requests Useful to include if they want you to use or do something you don’t recommend, eg a cheaper type of paint
accordion HousePaint

Case study

Customer ignores advice, then complains

Leon, a painter and decorator, provides a quote to repaint Sal’s front door. He recommends sanding, then an undercoat and four coats of high-performance paint. But Sal decides she wants just a light sanding and one coat on top of the existing paintwork.

Leon warns her it won’t weather well, but she insists it’ll stand up to the wind and rain. Six months later, she complains of paint bubbling. She blames poor workmanship and asks for a refund.

Leon checks back over his paperwork. He finds an email he sent Sal outlining his concerns about her preferred method.

Because she went against his advice — and he’d clearly set out the risks of this option — Leon does not have to provide any remedy.

He turns down Sal’s refund request. His email, and their discussion about methods, limits his liability. The job was done with skill and care, but to lower specifications at her request.

Sal is not pleased. But once reminded of Leon’s recommendation, she accepts she’s not entitled to a refund. She asks him to quote again to fix the paintwork and make her door weatherproof.

Reducing risk of complaints

Contracting out of consumer law

Businesses that sell consumer products or services to other businesses can contract out of the Consumer Guarantees Act (CGA) and the Sale of Goods Act (SGA). It might be your business contracting out, or it might be one or more of your suppliers.

Contracting out means that if something goes wrong, eg a domestic oven bought by a baker breaks down, the seller does NOT have to pay for repairs or give a refund or replacement — except to the extent stated in the contract.

Contracting out must be put in writing, eg in a sales agreement or contract. If not, the law applies. It doesn’t matter if the document is signed or not. If the sale goes ahead, it’s taken to mean the buyer agrees to the terms.

Check for phrases like these, which mean your supplier has contracted out:

  • It is a condition of sale that the Consumer Guarantees Act 1993 will not apply to any goods or services acquired for business purposes.
  • No other warranties either express or implied by law are made with respect to these products.

Faulty goods and services bought by businesses (external link) — Consumer Protection

 

casestudy making contact

Step-by-step

How to avoid spamming customers

Spam can be unwanted emails, text messages, instant messages or faxes. Sending it is illegal. Follow these three steps to make sure what you send to customers isn’t spam:

  1. Only send to those who have agreed to receive it, eg they subscribed to your newsletter or asked for a quote.
  2. Be clear who the message is from and include contact details for your business. 
  3. Include an easy way to stop receiving messages from your business, eg an unsubscribe link or details of who to email to opt out.

So long as you meet these steps, these types of emails and other messages are fine to send:

  • Replies if a customer asks for a quote or estimate.
  • Confirming a sale the customer has agreed to.
  • Progress reports on a current sale, eg confirming dispatch of their order.
  • Information about warranties, product recalls, and any safety or security concerns about a product or service bought by the customer.
  • Information about the customer’s existing subscription, membership, account, loan or other ongoing relationship.

Check out the resources and case studies on the Department of Internal Affairs’ website. These help New Zealand businesses comply with anti-spam rules.

Spam information for businesses (external link) — Department of Internal Affairs

Report a cyber security problem (external link) — CERT NZ

Extended warranties

Think carefully before offering these. Advice to customers from Consumer Protection and other consumer rights organisations is not to buy these. This is because consumer laws offer long-lasting protection against things going wrong — especially for expensive items, eg 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 it 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.

Selling extended warranties (external link) — Commerce Commission

But if you’re buying something for your business, the supplier may contract out of the Consumer Guarantees Act. If they do, it might be worth looking into an extended warranty in some cases, eg buying a vehicle for your business.

Warranties (external link) — Consumer Protection