Christmas shopping: A guide to returns and refunds

What rights do you have when a purchase goes wrong?

Christmas shopping: A guide to returns and refunds

As the Christmas season arrives, here’s how to avoid purchases that’ll leave you shopping mad.

Online shopping

Keen to shop from the comfort of home? The digital marketplace comes with unique pitfalls, so remember to:

Find out who you’re dealing with

First up, look for the trader’s physical address and phone number. Businesses with “co.nz” domain names may sound New Zealand-based, but that’s not always the case.

It can be easier enforcing your consumer rights (see “Consumer Guarantees Act”) if the company has an office here, so plug its name into the New Zealand Companies Register.

No matter where they’re based, private sellers (for example, those offering personal items on Trade Me) aren’t subject to the same obligations as retailers. Instead, you’ll have to rely on the more limited rights in the Contract and Commercial Law Act (for Kiwi sellers) or the online marketplace’s own protection policy, such as Trade Me’s Buyer Protection or eBay’s Money Back Guarantee. These schemes often require you to raise a dispute within a set time frame, so familiarise yourself with the details.

With any online purchase from a retailer, run your eyes over the returns policy before committing to the deal.

Ignore online baiting

As the Wild West of retail, websites often use misleading tactics to part you from your cash, from fake celebrity endorsements to inaccurate “sold out” or “selling fast” claims. Some use transaction clocks – where a second-by-second countdown creates a false sense of urgency.

Online shopping with laptop and credit card

Online retailers are notorious for luring shoppers with a headline price that’s less competitive once service, delivery and transaction processing fees are added. Always use the all-inclusive price when comparing deals. Leaving an item in your shopping cart can pay dividends, as you may soon find a “special” discount pops up in your email or on a third-party website.

Trust your inner sceptic. Before you buy, a quick search for the retailer or product alongside “scam” or “fraud” can turn up stories of unhappy former customers.

Make a secure payment

Before you reach for your wallet, look for a padlock symbol near the address bar in your browser and check the web address starts with “https” (the “s” stands for secure). Don’t enter any personal or payment details without these.

Use a debit or credit card to shop online. This allows you to apply for a chargeback (see “When it goes wrong”).

Know your rights if the delivery’s dodgy

Whether you buy online or in-store, you can claim a refund if your parcel doesn’t show up by the agreed delivery date (as long as the retailer operates in our market). If you haven’t agreed on a date, your delivery must arrive in a “reasonable” time.

Consumer law also means the retailer, if it’s arranged delivery, is accountable if your item arrives damaged – it can’t fob you off by blaming the courier.

You’re also protected if your item shows up but doesn’t match what was pictured on the website. If this occurs, the retailer must provide the advertised product at no extra expense to you. If it can’t, you’re entitled to a refund.

In-store

Prefer making your purchases in person? We advise you to:

Request an exchange card

Retailers only have to refund or exchange an unwanted gift if it’s faulty. Whether the product was on sale or at full price, you’re on your own if you experience buyer’s (or gifter’s) remorse. That said, some stores will take back a poorly received present or impulse buy to keep customers happy. To be safe, ask if the store offers exchange cards when you make your purchase.

Ask about sales

Retailers can’t mislead you – for example, by inaccurately telling you it’s the final day of a sale or your last chance to get a discount. If you’ve been misled, you have grounds to request a refund of the full price or the difference between what you paid and the new price. It’s annoying to buy something only to spot it on sale the next day, but a retailer isn’t obliged to retroactively apply discounts, unless it’s been less than truthful.

When it goes wrong

If your Christmas gift isn’t of acceptable quality, you need to contact the retailer and give it a reasonable chance to put it right. You’ll need evidence showing you bought the item from the company, but don’t worry if you can’t find the receipt. You can use bank statements or store records – including loyalty card data or product warranty forms – instead.

consumer returning faulty goods
If the problem is minor, the retailer may choose to fix the item, replace it or offer a refund.

If the problem is minor, the retailer may choose to fix the item, replace it or offer a refund. But if it’s a major fault, it’s up to you whether you want a refund or replacement.

If the store refuses to do anything, you can:

  • Apply for a chargeback or refund. If you paid by debit or credit card, you can ask your bank about a chargeback, essentially a refund of the purchase. This can be especially useful if you’re dealing with an overseas retailer. If you’ve bought from a major online marketplace with a purchase protection policy, you could also try raising a dispute.
  • File a claim with the Disputes Tribunal. For any matter under $30,000, you can enforce your rights through the tribunal, though it will cost between $45 and $180 to file a claim.

Consumer Guarantees Act

The Consumer Guarantees Act (CGA) covers all items for personal use bought from a trader – whether you acquired the product yourself or it’s a gift purchased for you. It requires all goods:

  • are of acceptable quality
  • are fit for purpose
  • match the sample, model and advertised descriptions
  • will be a reasonable price, if no price or pricing system has been agreed upfront
  • will be delivered on time or within a reasonable time, if the supplier arranges delivery
  • will be owned by the customer once purchased.

Retailers can’t try to escape these obligations (for example, by putting out a “No refunds” sign or including misleading clauses in the T&Cs). Companies acting as agents – from travel agents to “daily deal” websites – are just as responsible for fixing issues as the product or service supplier.

The CGA applies to all traders that advertise or sell to Kiwi consumers, even if the company is based overseas.

Imported goods and GST

On December 1, rules requiring overseas companies to collect GST for purchases of $1000 or less and destined for New Zealand kicked in – just in time for Christmas. Previously, taxes weren’t collected on overseas purchases unless the GST and duties added to $60 or more.

In general, this will increase the cost of buying items less than $400. On the upside, you’ll pay less on orders between $400 and $1000, since Customs dropped tariffs and entry fees. The new rules should also speed up delivery on parcels valued under $1001.

The key exceptions are alcohol and tobacco, which are typically subject to excise tax.

If all the items in your order cost more than $1000, Customs will stop the goods and send you an invoice for the taxes and tariffs, though they won’t charge GST if it’s already been paid.

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