Make sure your bargain buying goes to plan.
Here are our 5 rules for shopping online.
Before you order, check the website’s contact details for a physical address and phone number, whether it’s New Zealand-based or not. Be aware a website with a .co.nz domain name doesn’t mean the trader is based here. It’s no guarantee you’re buying locally.
A Consumer member who bought a $385 ski jacket from quiksilver.co.nz was “livid” when he was slugged $165 extra in import charges. The site listed a local address but didn’t make it clear the jacket was sent from Australia. The company reimbursed the charges when he complained.
The New Zealand Companies Register – companiesoffice.govt.nz – is your first port of call to find out whether a trader is registered here.
Think you’ve found the best price possible on the web? Online retailers are notorious for luring customers with a headline price that turns out not to be that sharp when service, delivery and credit card fees are added.
You may also fall victim to price discrimination tactics. Your online activity, from your Facebook profile data to the cookies stored on your computer, gives websites clues about your preferences and behaviour. Your purchasing history can also indicate how much you’re willing to pay.
Using our online footprint, companies can tailor their pricing to what they think an individual shopper is willing to pay. As a bonus for businesses, customers often have no idea if they’ve been affected by this practice.
University of Auckland economics professor Tim Hazledine says open price discrimination is part of our daily lives. A person who paid $200 for an airplane ticket 2 days before take-off is unlikely to begrudge the person next to them who paid $50 6 months ago – but that’s because anyone could have booked early and accessed that lower price, he says.
“It’s not really a major issue when it’s done openly. But when done using big data-type practices, people will start to think it’s a bit dodgy,” Dr Hazledine says.
Online retailers Amazon and Orbitz have previously been outed for offering different prices to people based on their location or recommending pricier options to Apple users.
The 2019 Black Friday (29 November) and Cyber Monday (2 December) sales bookend law changes requiring overseas companies to charge GST on all purchases valued $1000 and under. The changes kick in on 1 December.
Shopping on or before 30 November? If you’re buying from an overseas site and the value of duties and GST on the purchase total $60 or more, Customs will make you pay these fees (plus a $56 admin fee) when your parcel arrives in the country. You can check a potential Customs bill at customs.govt.nz.
And from 1 December? Expect overseas retailers to charge GST on any items up to $1000. At the same time, the government is dropping tariff duties and cost recovery charges (that $56 admin fee) on all orders under $1001. This means consumers will generally pay less on orders valued between $400 and $1000 from the beginning of December. If you're buying more than $1000 of goods, you won't notice much difference: you're still on the hook for GST, duties and admin fees.
Even if you calculate what you’re up for, you may run into trouble returning an item. One Consumer member needed to twice return an incorrectly sized item of clothing to Hong Kong-based Net-A-Porter. Each time a replacement was sent, she had to pay Customs duties and GST, meaning she paid 3 times.
Customs offers refunds (which it terms drawbacks) on these charges when you return an order, though GST can only be claimed back if the goods sent are incorrect or faulty. If you simply change your mind, you’ll have the wear the GST charge.
We recommend using a debit or credit card to shop online – that way you can apply for a chargeback if the correct goods don’t show up.
Every time you enter your credit card information, check the site is secure. In your browser, look for a small padlock symbol near the address bar in your browser and whether this address starts with “https” (the “s” stands for secure) rather than the standard “www” or “http”.
Android Pay and Apple Pay add an extra layer of security. As well as encrypting the information, details sent to the merchant are for one-time use only. If they’re intercepted, a fraudster can’t make multiple transactions. However, not all retailers offer these payment options.
Take a screenshot of your completed order or save a copy of the order confirmation in case something goes wrong. Keep an eye on your bank statements. If you spot anything unusual – such as 2 transactions for 1 item – contact your bank immediately.
If your parcel doesn’t show up, you’ll be able to claim a refund if the retailer agreed to deliver an item by a set date. But even if you haven’t agreed on a date, the Consumer Guarantees Act (CGA) requires delivery to be within a “reasonable” time.
Retailers are also on the hook if the item arrives damaged and they’ve arranged delivery – don’t let them fob you off by blaming the courier.
If you make a physical or online purchase from a trader operating in our market, regardless of whether it’s a Kiwi-based company or not, it’s covered by our consumer legislation.
Any company conducting business here has to comply with the Fair Trading Act and CGA. However, the CGA is self-enforcing – you’ll have to take a business to the Disputes Tribunal if it fails to comply – so holding a retailer to account can be easier if it has an office here.
Another tactic for getting a company’s attention is complaining on the retailer’s Facebook page or Twitter account.
If an item bought from an overseas trader never shows up, your rights vary depending on the country’s consumer protection laws. It’s worth reporting problems to econsumer.gov, a network of consumer protection agencies. Complaints help it keep tabs on scams and trends.
The process – where the credit or debit card company reverses a charge – can be a buyer’s last resort to remedy a purchase gone wrong.
Credit and debit card companies set rules about when they will apply a chargeback (for example, if you never received the item or were sent something different from what you ordered). You’ll need to provide details of your purchase and a description of the product, as well as proof of return if you sent it back.
Chargebacks also apply to fraudulent or mistaken charges, so can be used if the company has charged you twice for an order. But you can’t ask for a chargeback if you’ve changed your mind about a purchase.
Banks set a time limit on when you can ask for a chargeback, with some specifying two months from the transaction date and others 30 days from your credit card statement closing date. Orders subject to long delivery periods could affect your ability to request a chargeback.
A successful claim is usually free. If it’s unsuccessful, some banks charge a fee for the investigation time. Kiwibank and Westpac specify $60 an hour.
If you’re unhappy with the decision, you can complain to the bank. If you can’t reach a resolution, you can take the matter up with the Banking Ombudsman.
Regularly clear your cache and browsing data.
Check prices using another device (such as your desktop computer against your iPhone), in a different browser or in incognito mode. If you’re signed up to a virtual private network service, use it when researching prices.
Compare deals before hitting the pay button.
Avoid using your Facebook or Google account when you buy. It may be easier than creating an account and remembering another password but, depending on the settings you choose, the company may also gain access to a large amount of data on you.
Log out of sites Facebook and Gmail while you’re browsing.
See what happens if you only partially complete an order but leave the item sitting in your shopping basket or add it to your wish list. You may find a “special” discount for the item or store pops up on a third-party website in a day or two.