Legal rights
Parallel importing
Introduction
Parallel imported goods are often cheaper, but there can be drawbacks.
If you have been shopping around for a new digital camera or mobile phone, chances are you will have stumbled on a few parallel importers. You may have been surprised by the low price-tag of some models selling for much more elsewhere, and wondered what the catch is.
We outline the potential benefits and risks associated with buying from a parallel importer.
What is parallel importing?
Parallel importing involves a retailer bypassing a product's official New Zealand distributor by buying the goods overseas, importing them, and selling them here.
The goods must meet all our laws and standards for safety, they cannot be counterfeit, and retailers are still bound by the Consumer Guarantees Act and Fair Trading Act.
Before parallel importing was introduced in 1998, official distributors had a monopoly on their goods in New Zealand and the law defended this monopoly. Parallel importing was legalised because the government wanted to increase competition in prices and product ranges.
Now prices have fallen and some businesses specialise in selling parallel imported goods. They buy their stock wherever it is cheapest, while official agents are forced to buy from the manufacturer at a fixed price.
International businesses often set different wholesale prices in different countries. For example, Japan's recession saw many manufacturers reduce prices in Japan to keep their market share. Parallel importers were able to undercut local distributors and retailers by buying stock in Japan.
Pros and cons
Bigger range
When Apple launched the original Apple iPhone US internationally, it wasn't available in New Zealand. But you could buy an Apple iPhone US from several parallel import specialists.
But alongside the latest technology, there are also obsolete goods. Some parallel imports are discontinued models, going cheap because the manufacturer wants to get rid of them.
You also need to be aware of national variations in electrical goods. Make sure you are comparing like with like and not buying something that looks identical to the local version but in reality is not.
Lower prices
Parallel imports often sell for less than the local wholesale price, and traditional retailers will be making a loss by price-matching on some items. Parallel imported digital cameras generally sell for about 70 percent of the standard price. We have found top-brand binoculars selling at half the standard price.
What don't you get?
Official local importers usually won't support goods bought from a parallel importer. Manufacturers may view parallel imported goods as second-hand and not entitled to the factory warranty.
Local agents say paying the extra price of an official distributor buys backup support and a warranty. They can also negotiate a deal, and teach people how to use their new purchase. They say customers can't expect rock-bottom prices as well as excellent service
Most second-hand Japanese cars are parallel imports. When a recall's announced, the local branch isn't responsible for repairing vehicles it didn't import.
We've heard claims that parallel-imported items were supplied with Japanese manuals or plugs that were incompatible with Kiwi wall sockets.
Parallel import specialists reply that they choose models that suit the local market. Faulty goods are repaired locally or sent overseas for repair. Some may offer a replacement if repairs are going to take some time or be expensive.
Our advice
- There are some genuine bargains available in parallel-imported goods. There is also the opportunity to buy goods that will not be released here for several months. But you need to be aware of what you are getting and be prepared to deal with any after-sales problems that might arise.
- Do your research first. Be sure of the model number of the item you want. Before leaving the shop, check that the goods are suitable for use in New Zealand, that all accessories are supplied and that you can understand the manual.
- Most goods are pretty reliable these days. And retailers often replace faulty goods anyway, so the lack of an official repair service is a small risk to take.
- If you expect expert advice and after-sales backup, then traditional retailers offer them at a price.
- If you're buying an electrical item, check the adaptor meets the New Zealand standards. See Unsafe electrical products and Unsafe power adaptors for more information.
Your rights
You have the same legal rights whether you are buying parallel imports or goods that have come through the official distributor.
The Consumer Guarantees Act covers goods bought for personal use, but doesn't cover business equipment. It says that if goods have a substantial fault - they don't work, they are dangerous or they aren't the goods advertised - then you get a replacement, a repair or a refund. The Act also says repairs must be completed in a reasonable time.
Business equipment is covered by the Sale of Goods Act. If the goods are faulty you may be entitled to a refund, compensation for loss, and damages for losses caused by the fault.
Parallel imports may need to be sent overseas for repair. It's probably realistic to expect this to take longer than it would if the problem was solved by the local agent. Retailers can choose to do the repairs themselves, but the work must be done to a high standard.
If faulty goods can't be repaired, either because the local agent won't touch them or the cost of repairs is greater than the value of the item, then you are entitled to a replacement or your money back - the choice is yours.