Dealing with complaints and bad reviews

It’s good business sense to deal with customer problems quickly and fairly. With good customer service processes in place, even complicated complaints — or heated discussions — will be easier to resolve. This means:

• An easy way for customers to report problems.
• A clear process for investigating complaints.
• Making fair decisions about remedies.

Read more about Understanding when to resolve an issue

It’s important not to stick your head in the sand. Your customer may take this as refusing to deal with their complaint. They are more likely to complain to others, either on social media or in person. And lack of action will count against you if a complaint goes to court or a Disputes Tribunal.

Use these templates so you, your staff and your customers know how complaints will be handled:

Refund policy sign [PDF, 795 KB]

Complaint record form [PDF, 810 KB]

Complaints process checklist [PDF, 3.2 MB]

Talk to your industry body — this is a good way to learn best practice for dealing with customers.

Price increases

It is not illegal for businesses to increase their prices. However, the Fair Trading Act (FTA) prohibits misleading and deceptive conduct and false representations. This means if you give a reason for a price increase it must be true, otherwise you risk breaching the law.

Many sectors are facing a very difficult time, but customers need to be confident that prices are fair and equitable. If you decide to increase your prices for the products or services you provide:

• Let your customers know beforehand.
• Be clear about the reason for the price increase.
• Remember you cannot mislead customers about the reasons, or you risk breaching the FTA.

More guidance is available about how to sell, advertise and talk about products and services under the Fair Trading Act.

Business obligations under the Fair Trading Act 

While businesses are free to set their own prices, there has been some public concern about price increases on essential goods and services at this time. The Ministry of Business, Innovation and Employment (MBIE) is encouraging business to be transparent about any increases, and is interested in hearing from consumers via Price Watch(external link)  with any concerns.

In-person complaints

Make sure you and any staff involved:

• Record the customer’s contact details.
• Record details of the complaint.
• Know what steps to take. A checklist to work through might help — download the template on this page — or a guide to who handles certain complaints.
• Know when it’s fair to give which remedies.
• Use complaints data to identify wider issues that need fixing, such as a careless delivery driver or a supplier that sells too many defective parts.

It’s best if one person investigates and decides what — if any — remedy is required. You may want all workers who have contact with customers to be able to handle minor complaints. For more serious complaints, it’s best if someone senior takes over as soon as possible.

To assess and refine your complaints process, see tips and advice on the business.govt.nz website.

Fair returns and complaints policies(external link) — business.govt.nz
Training staff to deal with complaints(external link) — business.govt.nz

If you have staff, run regular check-ins on handling complaints. Use examples from your business about when a quick remedy is OK, such as replacing a poorly made coffee, and when it’s not.

Social media complaints or bad reviews

Because these are public, quickly resolving negative social media comments can build trust and goodwill with current and prospective customers.

Assign one person to manage social media feedback — you, or a trusted staff member — and agree how you’ll respond to certain types of complaint. Only delete complaints that are abusive or otherwise offensive, but first ask for contact details so you can investigate the complaint.

Follow these steps when a complaint or bad review comes in:

• Read it thoroughly.
• Reply publicly with thanks, an apology, and a promise to look into it promptly. 
• Move onto a private channel, such as Facebook Messenger, email or phone, to get to grips with the problem.
• Be polite and professional.
• If you need time to investigate, say so and give a timeframe for getting back to them.
• Decide which remedy — if any — is appropriate.
• If you reject the complaint, set out your reasons clearly.

Find more tips on handling social media complaints, and other ways to reduce the risk of complaints, on the business.govt.nz website.

Reducing risk of complaints(external link) — business.govt.nz

Following up on problems

Once you’ve decided on a remedy, check back with your customer. Ask them to get in touch promptly if they’re not satisfied, or if further problems arise.

Complaints are a valuable source of data. Keep a record of each complaint, what caused it, and the agreed remedy. Use this data to identify problems with your business — including your process for handling complaints — and to see if your solutions are working.

This data will help shed light on whether you need to:

• Offer more staff training.
• Improve product knowledge.
• Change suppliers or delivery services.
• Stock different products or brands.

If a customer takes a complaint further

If you and your customer can’t agree about how to resolve a complaint, they may make a claim to the disputes tribunal or district court.

Make sure you are well prepared. Document what you did and why you decided on the remedy you did — or why you rejected the complaint. Make sure what you did is in line with consumer laws.

If their complaint is about false or misleading statements, they may report you to Commerce Commission for breaking the Fair Trading Act.

Disputes Tribunal

It handles a range of claims up to $30,000 including:

• If work has been done properly or priced fairly.
• Faulty products.
• Loss caused by misleading advertising.
• Disputes over contracts or sales agreements.

A trained referee works with both sides to try to reach an agreement. If not, the referee can make a binding decision. Possible outcomes include:

• You don’t have to do, or pay, anything.
• You must give a repair, refund or return.
• Changes to — or cancellation of — the contract or agreement.
• The claim is dismissed.

Disputes Tribunal(external link) — Ministry of Justice

District Court

This is for the same types of claims, but above $30,000 and up to $350,000. It’s a more expensive process as lawyers are typically involved.

After hearing both sides, the court makes a binding decision. The possible outcomes are like those in the Disputes Tribunal — and the losing side might have to pay the other’s legal costs.