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Consumer law for retailers

Generating positive word-of-mouth referrals is the most cost-effective form of marketing you can carry out, and the best way to do that is by always doing right by your customers. 

This is why keeping to the letter of the law when it comes to your consumers is so important. It’s not just about avoiding penalties, it’s also about contributing to the health of your business.

Consumer Guarantees Act

If a consumer buys an item of goods or orders a service that doesn’t deliver the benefits promised, they may have the right to receive a remedy from you, the retailer, under the Consumer Guarantees Act (1993).

The Act applies to goods or services ordinarily bought for personal, household or domestic use. Even if the intention is to use business goods or services for personal use, those goods will not be covered by the Act as they are not consumer goods.

If you’re selling consumer goods to a business, you can contract out of the Act by providing a clear written statement to that effect in an agreement or by displaying it in terms and conditions at all your places of business.

Just don’t be tempted to add this as a clause into the fine print of a sales contract because you could find yourself breaching the Fair Trading Act (see below).

You also can’t direct customers to use a manufacturer’s warranty or guarantee instead – the customer may have the right to a remedy from you if the product or service doesn’t do what it is supposed to do or what you were promised it would do.

Remedies provided under the Consumer Guarantees Act include repair, refund or replacement of goods and the cancellation of services.

Find out more with Consumer Protection:

Consumer guarantees for goods (external link)

Providing remedies for goods (external link)

Consumer guarantees for services (external link)

Providing remedies for services (external link)

This is a guide only. Only the courts can make an authoritative ruling on breaches of the Consumer Guarantees Act. The guide is not intended to be definitive, and should not be used instead of legal advice.

If a consumer is misled about a product or service they’re purchasing, then the business that did so is in breach of the Fair Trading Act (1986) and could face a fine of up to $200,000.

The Act exists not only to help ensure consumers are given accurate and pertinent information when deciding to buy something, but also to ensure fair play between business competitors. In doing so, the Fair Trading Act helps safeguard the vibrancy of New Zealand’s economy.

The Act applies to all forms of sales and advertising, and all forms of media – from website advertising to in-store signage and what your sales staff say on the shop floor. It also applies to anyone who is doing business in New Zealand, even if they’re based overseas or they’re a foreign contractor (such as a telemarketing call centre) working for a Kiwi business.

As a retailer, you must always make sure the product and service information you and your staff give out is accurate and gives consumers the full picture. However, you don’t have to provide information in all circumstances.

Find out more about the Fair Trading Act with the Commerce Commission (external link)

This is a guide only. Only the courts can make an authoritative ruling on breaches of the Fair Trading Act. The guide is not intended to be definitive, and should not be used instead of legal advice.

Weights and Measures Act

If a consumer is sold a quantity of goods which is less than they paid for, the business that sold the goods is breaching the Weights and Measures Act (1987).

The Act sets out the rules for selling goods by quantity, including which units different goods should be sold under and which weighing and measuring equipment you can use.

As part of this legislation you may be visited by Trading Standards, Ministry of Business Innovation and Employment officers, who carry out random inspections on weighing equipment to make sure they are of the approved type.

Find out more about accurate measures with Consumer Protection (external link)

Find out if an item of goods is currently banned under an Unsafe Goods Notice (external link) with Consumer Protection 

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