What to do if a customer complaint is due to a problem caused by your supplier or manufacturer — and how to take it further if they won’t take responsibility.
What you must do for your customer
Some customer complaints are down to issues that stem from your suppliers, eg a faulty part in your product, shipping delays that hold up your work, or products broken by your courier.
Don’t tell your customer to take it up with the supplier — they came to you, so it’s up to you to resolve it. Make your own complaint to your supplier later so you’re not left out of pocket.
Once you’ve confirmed it’s a genuine complaint, give your customer a remedy — or let them know you are working with your supplier to resolve the problem. Update your customer regularly.
It’s important not to stick your head in the sand. If you seem to be ignoring a complaint, or dragging your heels, they may take this as refusing to deal with their complaint.
Reducing risk of complaints(external link) — business.govt.nz
Complaining to your supplier
Once you’ve given your customer a remedy, take it up with your supplier. Before you make contact, check the contract to see if:
- any terms have been broken
- it sets out any rights to compensation
- the supplier has contracted out of any laws when selling to you, eg the Consumer Guarantees Act or Sale of Goods Act.
Bring paperwork from the sale, proof of the problem and any other information that might help. Be polite but firm.
Even if you can’t get a refund or other remedy, your supplier should want to know about the problem and take steps to prevent it happening again. Otherwise they risk losing your business.
Analysing complaints data(external link) — business.govt.nz
Read more about Faulty products and services bought by businesses
Record data on all complaints you receive. Use this to spot recurring problems, eg with certain suppliers or product lines.
Carriage of Goods Act
This Act can be useful if deliveries to your customers are damaged or delayed by your delivery service — but it does not apply to postal services.
For the public, the Consumer Guarantees Act covers losses if a delivery service doesn’t carry out its duties with reasonable skill or care. Businesses aren’t covered by this law, but may be able to claim under the Carriage of Goods Act.
How to use the Carriage of Goods Act(external link) — business.govt.nz
If a supplier turns down your complaint
It can take time to resolve these sorts of issues. But if you and your supplier can’t agree, you can go to the Disputes Tribunal or District Court claiming:
- breach of warranties under the Sales of Goods Act if it’s a faulty product
- breach of contract for commercial services.
It can be time-consuming and expensive to make these claims, so make sure you are well prepared — and remember the decision might go against you.
Disputes Tribunal
It handles a range of claims up to $30,000, including:
- if work has not been done properly or priced fairly
- faulty products
- loss caused by misleading advertising
- disputes over contracts or business 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:
- your supplier doesn’t have to do, or pay, anything
- you get compensation for loss or damage
- you get a repair, refund or return
- changes to — or cancellation of — your contract or agreement with the supplier
- the claim is dismissed.
Disputes Tribunal(external link) — Ministry of Justice
Read more about Going to the Disputes Tribunal
District Court
This is for the same types of claims, but above $30,000. 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 similar to those in the Disputes Tribunal — and the losing side might have to pay the other’s legal costs.
This is a complicated area. Get legal advice to make a claim.
Your contractual rights
The only rights a business will typically have are the ones written in the warranty, contract or sales agreement. You may still have some rights through common law — rules made by judges when deciding cases — and some specific Acts.
Businesses can only rely on the Consumer Guarantees Act (CGA) if something goes wrong with a product, service or vehicle that’s usually for household or personal use. Even then, the supplier can contract out of the CGA when selling to other businesses.
So carefully research any commercial contract before signing it. It’s a good idea to get legal help, especially for expensive products or services.
If your supplier contracts out of consumer laws when selling to businesses, eg the CGA or Sale of Goods Act, this must be in writing. If they only do it verbally — or don’t mention it — these laws apply and you are covered.