Electronics

Shopping online

Updated 01 Oct 2011
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Introduction

It's now easier than ever to buy over the internet. But you still need to be careful.

Our safe shopping checklist outlines the steps you need to take to ensure your online shopping experience is safe and enjoyable. Plus we look at the tax you might have to pay if you're buying from overseas.

Bang for your buck?

Shopping online can save you money. Transport costs, import tariffs, and the small size of the New Zealand market can all add to the price of goods in local shops. It's also easy to find information on products and compare prices.

If you have a hobby or sport that requires specialist parts, an online store may give you more variety. And if you can't handle the stress of finding parks and standing in queues, online shopping may be ideal.

The New Zealand dollar (NZD) is strong right now so buying online from an overseas retailer can be a smart move. But there's a few things to ask yourself before you buy:

  • What's the total cost? Several products we researched looked cheaper on overseas sites. But that changed once we'd converted into New Zealand dollars, and added shipping costs and customs duty.

     
  • Are the online savings enough to warrant the added stress? Online shopping retailers are often a few thousand kilometres away. They're not covered by the Consumer Guarantees Act, and sorting out problems can prove difficult via email.


 

Our Safe shopping checklist has more tips about shopping online.

Safe shopping checklist

Before you click and buy, make sure your online shopping experience is a safe and enjoyable one.

Who are you dealing with?

  • Check the identity of the retailer, especially if you've never heard of them before. Only buy from sites that include adequate address and contact details - phone, fax, email, and street address (not just a PO Box number).
  • Find out how easy they are to contact. Look for links such as "Contact us" or "Help". It may be worth calling the phone number to see if someone answers, or sending an email to see how quickly you get a response.
  • If you're still unsure about a retailer's track record, do some research online. Search for complaints by typing their name plus "complaint" or "problem" into Google's forums. You can also check whether the trader has met the standards of companies that rate online sellers (such as www.shopsafe.co.nz, www.bizrate.com or www.bbbonline.com ).
  • Be wary if you're buying from a country where you don't speak the language. Even if the website is in English it may be difficult to sort out a problem.

Check out returns, refunds and warranties

  • When you buy online, there's a greater chance the product won't be quite what you wanted - clothes might not fit, or an appliance may not measure up to its claims. Check that there's a clear returns policy offering a full refund if goods are faulty or not what you ordered.
  • For appliances and electrical goods, check if the warranty is valid in New Zealand - you may need to ask for an international warranty instead. Also check that the company has a New Zealand agent who can repair the item if anything goes wrong. Local agents are usually under no obligation to repair goods they haven't sold.
  • Before you place the order, find out when and how you could cancel it or return something for a refund. Are there restrictions on returns? For example, CDs, DVDs and cosmetics must be returned in unopened packaging.
  • An item may have a money-back-guarantee - but if you're returning it because you've changed your mind, expect to pay the (often expensive) return postage. Where goods are faulty or if you're sent the wrong item, you should be able to claim the postage costs back from the retailer. This may take some perseverance, however.

Safeguard your personal details

  • Check the site's privacy policy and be wary if there isn't one. A clear privacy policy describes the type of personal information collected from a customer, the reason the information is collected, and who will have access to it.
  • You should be able to opt out of being placed on any third-party lists. The "better" sites don't share information with third parties unless you give explicit consent.
  • Check where your details will be stored later - some businesses store them on a secure server, others destroy them once the transaction is made.

Work out the cost

  • What's the exchange rate? Some sites have currency calculators to help you work this out. But when they don't, it's easy to forget you're dealing in US dollars or UK pounds - and you may get an unexpected surprise when your credit card statement arrives.
  • Check the total costs carefully to make sure they include delivery, taxes, and any other costs. These costs should be disclosed before you start ordering - and certainly before you finalise your order.
  • Sites should offer both "regular" and "express" delivery options. If the retailer can't give you a specific delivery cost, make sure you know the maximum amount you'll have to pay. The cost of postage and packing can greatly increase the price if you're buying from overseas - so it might pay to buy several items, to make the postage worthwhile. If you need the goods by a certain date, make this clear to the retailer.

Keep your credit card details safe

  • Check out the site's security policy. In particular, make sure that the site has a secure checkout. This means your personal information is "scrambled" as it travels over the web and others can't tap into your details.
  • A secure page will have one or more of the following:
    * a pop-up window warning that you're about to enter a secure site
    * an unbroken key icon
    * a URL (website address) that begins with "https" instead of the usual "http"
    * a closed padlock icon - padlock icons can be faked so look for one other secure page indicator.
  • If the site doesn't have a secure checkout, then never email credit card details to a merchant - use the phone, fax, or snail mail. These methods are more secure.
  • Paying by credit card can give you extra protection if things go wrong, because you have the right to pursue a claim with the card issuer as well as the internet retailer.
  • Some sites offer "Verified by Visa" or MasterCard's "SecureCode". These verify your identity before processing transactions - you'll be asked for a user name and password as well as your credit card details. This provides another level of security.
  • Be aware of the limitations of secure websites. The security icons tell you your details are protected during transit. But once your details arrive at the retailer's site there could be a risk that they're not stored properly. To get around this risk, some retailers use a third party such as WorldPay or PayPal. You need to register with this third party - but it means you don't need to give your details to people you transact with. Large sites like Amazon, eBay, and Strawberry Net offer this service.
  • TIP! Some of our readers told us that, for online orders, they use a separate credit card with a lower limit - it lowers the risk of online shopping.

Set up a paper trail

  • Always keep a paper trail. Print off and keep a copy of your order and any confirmation or receipt that you get. It's also a good idea to keep a copy of the terms and conditions at the time of purchase.
  • Check whether you've been charged correctly and make sure your order matches your bill.
  • If you contact the retailer at any time because your goods didn't turn up or are faulty, make a note of it.

What if things go wrong?

  • Make sure the site has a complaints procedure, and that it gives contact details for handling complaints.
  • If you buy goods from a New Zealand trader you're covered by the Consumer Guarantees Act (CGA).
  • If you believe a New Zealand trader has breached the CGA, you can go to the Disputes Tribunal.
  • If you're buying from an overseas site, check which law applies to the contract you're entering into. In theory, you should have the protection of the relevant country's consumer laws, but it could be difficult to sort things out if something goes wrong.
  • Had a problem with an overseas internet trader? Visit www.econsumer.gov. This website (a venture of the International Consumer Protection and Enforcement Network) contains contact details for some overseas consumer agencies, advice and guidance on resolving an online shopping complaint, and gives you the opportunity to file a complaint.
  • The New Zealand Marketing Association can also help in settling disputes - it may work with a direct marketing association in that company's home country.
  • If you don't get the goods you ordered, or if they're of an unacceptable quality, ask your bank for a "chargeback". Banks may be willing to cancel the transaction and reverse the payment to the trader. Policies vary, so check with your bank. There may be a time limit on complaints, so contact your bank as soon as you're aware of the problem.

Buying electrical products

Energy Safety provides these guidelines for buying electrical appliances online:

  • Is the appliance fitted with a New Zealand plug? If not, do not buy. The plug should be moulded onto the supply cord. Don't buy electrical goods supplied with an adapter.
  • Check the voltage. New Zealand domestic voltage is 230 volts and 50 hertz. The appliance must be marked with this voltage as part of the manufacturer’s labelling.
  • Does the appliance come with user instructions in English? If not, do not buy. Ask for a copy before you purchase.
  • Does the seller provide a Supplier Declaration of Conformity that shows that the appliance complies with an AS/NZS Standard? If the seller can't supply a written declaration, do not buy.
  • Check the seller's location. Not all .co.nz sites are in New Zealand. If the seller is not in New Zealand, you're not protected by New Zealand law.

Avoid buying used/second-hand appliances online. There is no reliable way of determining the safety of a second-hand appliance purchased through the internet.

And remember to keep all records of your purchase.

More from consumer.org.nz

 

 

What about tax?

If you're buying from overseas, you may have to pay GST (15 percent) and import duty.

Duties on imports vary with what you're buying, and they may change from time to time. In general, duty is charged on goods that are widely manufactured in New Zealand - it's meant to assist local industry. So books, CDs, videos/DVDs, watches, and computer games don't attract duty. Clothing and footwear attract duty at 10 percent and jewellery at 5 percent. Go to www.customs.govt.nz for a full list of customs charges such as import entry fee and biosecurity fees.

If the total GST and import duty on your purchase is under NZ$60, Customs won't charge GST and duty - unless you've bought alcohol, cigarettes or tobacco. So if you buy non-alcohol or non-tobacco goods that don't attract import duty and the total cost (including postage, freight and insurance) comes to less than $400, you won't pay any GST. But if the total cost is $400 or more, you'll pay GST on all of that. And if the goods do attract duty, your total pre-duty cost will have to be a bit lower than $400 to take account of the duty.

If Customs believes duty or GST is payable, they'll contact you - and you won't get your order until you've paid up.

Customs can also advise you about products that are prohibited or restricted. You need permission from MAF to bring any plants, seeds, or animal products into New Zealand.

Our advice

  • Online shopping isn't always cheaper - it depends on what you buy and whether your purchase attracts GST or customs duty.

  • The internet is great for finding price comparisons but check out some real-world shops as well - they may be cheaper.

  • Make sure the billing process is secure before buying (indicated by the "s" in the "https" part of the URL and a padlock or other icon on your browser). Check the site's privacy policy, and be wary if there isn't one.

  • If you're not dealing with an internationally reputable online retailer (like Amazon) then who are you dealing with? Make sure the retailer has a physical address and telephone number listed on its website.

  • If you're not sure about a purchase, try to find out beforehand how many steps are in the online billing process. We had to cancel accidental "orders" twice because the billing process finished earlier than we expected.

More information


Report by Luke Harrison