The rules on what you must provide for customers, and when customers have rights to repairs, refunds or replacements for faulty products or substandard services.
The Consumer Guarantee Act (CGA) sets out quality guarantees any business or person in trade must provide to their customers.
It makes sure customers get what they pay for and, if needed, a repair, refund or replacement for a faulty product or substandard service.
You must not
- Knowingly sell faulty products or substandard 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 ignore the complaint or put off looking into it.
“In trade” means regularly selling products or services, or regularly buying to sell on. You might be GST registered and/or have staff. Or you might not. Frequency is a deciding factor.
What you must do for customers
Find out more about what you must do for customers under the CGA.
Download guide: What you must do for customers under the CGA [PDF, 538 KB]
If you sell products
Who it applies to
All businesses who sell products that are usually for personal or household use, including small and second-hand businesses, pop-up shops, auctions and regular Trade Me sellers. People who hold one-off garage sales or post occasional online auctions do not have to follow the CGA.
What you must do
You must offer products that are:
- of acceptable quality
- fit for purpose
- match the description given
- match any samples or demonstrations given
- sold at a reasonable price, if a price wasn’t agreed beforehand
- able to be legally sold
- safe.
You must also:
- Make sure deliveries arrive at the agreed time and 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.
- Undertake a product recall if a product you sell has safety concerns, falls short of a safety standard, or ha caused injuries or near misses.
Remedies for problems
If you do not meet one these guarantees, a customer can get a remedy — a repair, replacement, or refund — from you. Which you offer depends on whether the problem is minor or serious.
Making sure products are safe - Product Safety website(external link)
Product recalls information for businesses - Product Safety website(external link)
Read more about Providing remedies for faulty products
If you sell services
Who it applies to
Tradespeople, professionals, banks, utility providers, and all other businesses that provide services that are usually for personal or household use. This also includes schools, hospitals, and government departments.
What you must do
You must offer services that are:
- done with a reasonable level of skill and care
- fit for the purpose you and the customer agreed on
- cost a reasonable amount, if a price wasn’t agreed beforehand
- completed in a reasonable time if a timeframe wasn’t set beforehand.
Remedies for problems
If you do not meet one of these guarantees, a customer can get a remedy — a repair, compensation, or refund — from you. Which you offer depends on whether the problem is minor or serious.
Read more about Providing remedies for faulty services
If you manufacture, import or distribute
Who it applies to
Any business that assembles, makes, or processes products that are usually for personal or household use. This includes businesses that manufacture products, attach their brand to manufactured products, or import or distribute products made overseas.
What you must do
Your products must:
- match the description
- be safe, durable, of reasonable quality, and have no undisclosed defects
- have spare parts and repair facilities available for a reasonable time.
You must also follow any terms of your manufacturer’s warranty.
These guarantees apply to all new products and imported second-hand products sold in New Zealand for the first time.
You must also follow other relevant consumer laws, including product safety rules and the Commerce Act
Remedies for problems
If you do not meet one of these guarantees, you must repair or replace the product within a reasonable time, or pay damages for the loss in value compared to the purchase price.
If a customer complains, find out as much as you can before deciding what — if any — remedy to offer.
When these guarantees don’t apply
You don’t have to give a remedy if the customer:
- got what they asked for but simply changed their mind
- misused or altered a product in any way that caused the problem, e.g., not following instructions for use
- damaged, lost or disposed of the products after delivery
- knew about the fault before they bought the product
- asked for a service to be done in a certain way against your advice, or was unclear about what they wanted
- took an unreasonable time to return the products or cancel the service
- experienced a service problem that was outside of your control, e.g., a natural disaster, or was caused by someone you are not responsible for.
The CGA may also not apply if you sell a product or service to another business. This depends on whether you have contracted out of the CGA.
Contracting out
If you provide products or services that are usually for personal or household use to other businesses, CGA requirements typically apply but you may be able to contract out of this law. Contracting out means a written agreement that a business does not have to meet the requirements of a specified Act.
Businesses can only contract out of the CGA if:
- dealing with another business or person in trade
- both sides agree this law won’t apply
- this agreement is in writing
- it’s fair and reasonable to seller and business buyer to contract out.
If it’s only done verbally — or contracting out is not mentioned — the CGA applies.
Contracting out of consumer law(external link) — business.govt.nz
How the CGA is enforced
If you break any of these rules — or you and your customer can’t reach an agreement about a complaint — your customer can choose to take the matter to the Disputes Tribunal or District Court.
For general enquiries please contact us