Under the Consumer Guarantees Act (CGA), your consumer rights are expressed as a series of guarantees that a seller automatically makes to you when you buy any goods or services for personal use. In this guide, we explain what those rights are, and what to do if you think your rights have been breached.
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The act covers goods (new and second-hand) and services ordinarily purchased for personal, domestic or household use. “Goods” include pretty much everything in and around the home – from appliances to vehicles, furniture to food. Gas, electricity, water and computer software are also covered.
“Services” include things done by tradespeople such as plumbers and painters, professionals such as dentists and lawyers, after-sales and repair services from shops, and all the services you get from insurers, petrol stations and travel agents. In general, if you pay for it, it’s covered.
The act also applies to goods you hire and to gifts. If you’re given something, you have the same rights as if you bought it yourself, and can seek redress directly for any problem.
This means it does not cover private sales. However, it does cover goods sold in second-hand shops, and goods sold over the internet by businesses trading here.
The act does not cover the purchase of homes, although it does cover home repairs. Nor does it cover goods or services usually bought for commercial use, such as medical equipment or the installation of industrial machinery.
This also means guarantees and warranties cannot state “no consequential losses are covered”, because attempts to contract out of the act may mislead consumers about their rights.
Sellers can only contract out of the act when goods are used for business. When a product is ordinarily purchased for domestic use but is used for business purposes – such as a mobile phone – the act will allow a seller to contract out. Any contracting out must be done in writing at the point of sale.
Retailers and other suppliers guarantee their goods will:
Manufacturers (the definition includes importers) in New Zealand guarantee that:
Service providers guarantee their services will be:
The act’s terms “reasonable” and “acceptable” are deliberately open-ended.
It depends on what a reasonable consumer would think was acceptable based on the nature of the goods, the price, any statements that have been made about the goods, and the nature of the supplier and context in which the goods are supplied. A concert violin is required to meet a higher standard than a child’s cheap instrument. Ultimately a tribunal referee or a judge may have to decide what is reasonable or acceptable in the circumstances.
If a defect was pointed out to you before you bought the good, then it doesn’t count towards making it unacceptable.
Generally speaking, this means the retailer that sold you the goods or services must sort out the problem. If the stitching comes apart on your fairly new shoes, you don’t have to track down the manufacturer or importer, you simply take them back to the shop.
If the problem is minor, and can be fixed, the retailer can choose to either repair the item, replace it or give you a refund.
When you have the right to reject the goods, sellers cannot just offer a credit note. If you want a refund, you are entitled to it – by cash, cheque or credit card charge reversal.
If your new washing machine won’t work properly you can claim for laundry costs or the cost of hiring a replacement machine while the first one is being fixed.
If you have to post or courier goods back to be repaired, you don’t have to pay for those costs.
The compensation for consequential loss must put you back in the position you would have been in if the goods or service hadn’t been faulty.
So, if a 6-month-old washing machine is replaced because it is faulty, and there was originally a 12-month manufacturer’s warranty on it, then this warranty will have 6 months to run on the new machine.
However, the Consumer Guarantees Act applies to the replacement, so you will still have all the rights you’re entitled to when buying a new machine.
Where there has been a breach of the act, manufacturers and importers are obliged to:
Complaining to the manufacturer is useful when, for example, the retailer has gone out of business or is proving hopeless to deal with. But in most cases, it will be easier to insist on your rights directly with the retailer.
If a product has parts made by different manufacturers, you can claim against any or all of them. However, in practice your best bet may be to contact the one whose name is on the product.
You’d probably be paying for protection you’re already entitled to under consumer law, your home and contents insurance, or the manufacturer’s warranty. In some cases, the extended warranty offers less cover than you’re entitled to under the law.
Our report on extended warranties explains the pitfalls.
Consumer advisers can explain your rights and help you resolve problems with a retailer or service provider. Consumer members have access to the service as part of their membership.
This information is available to Consumer members only.