Yeah, Nah Awards: Barkers' online returns policy risks misleading you about your rights

We all know the feeling. Excitement when you see the package on your doorstep. Anticipation as you tear into the plastic or open the box. Disappointment when you realise it’s not right.

Whether the item isn’t what you ordered, isn’t durable, safe or up to standard, it sucks when you realise you need to return it. Your first port of call might be the retailer’s online returns policy. But what if the policy is wrong?

We analysed some popular New Zealand retailers’ online returns policies to find out if they’re giving the correct information about consumer rights. Barkers stood out for having the most statements that risk misleading consumers, which is why we’ve given them our “On Bad Terms” Award in our second annual Yeah, Nah Awards

What we found

We found several policies that risk breaching the Fair Trading Act by:

• limiting the time for returning items and how many times a customer can return an item

• suggesting customers can only return items that haven’t been worn

• saying that some items can never be returned

• suggesting the customer always has to pay for return delivery

• implying another country’s laws apply.

The Fair Trading Act (FTA) prohibits anyone trading in New Zealand, including international businesses, from engaging in misleading or deceptive conduct. Under the FTA, it is illegal for a trader to mislead a consumer about any rights they have under the Consumer Guarantees Act (CGA).

Your rights for returning items you bought online

How much time do I have to return an item?

There is no set time limit for returning items under the CGA. You’ve got a reasonable amount of time to return items that don’t meet the guarantees under the act. What’s ‘reasonable’ will depend on the item, how long you’ve had it and how you’ve used it.

We found a range of retailer statements that could give the impression there is a time limit for returning goods that don’t comply with CGA guarantees. These retailers include:

• Barkers men’s clothing (30 days)

• Bed Bath and Beyond (30 working days)

• Foodstuffs nationwide (3 days for fresh food, 30 days for all other products)

• Max women’s clothing (30 days)

• Rebel Sport (30 working days from delivery)

• Temu (90 days).

How many returns can I make?

Under the CGA, there is also no limit on the number of items you can return. If a product doesn’t meet the guarantees, you’re entitled to a remedy, even if you’ve already returned 5 items. A trader can’t limit your rights under the act.

We found Max and Barkers made statements that could mislead you about the number of returns you can make. They both said that customers are only allowed up to 5 returns per month.

Do items have to be in original condition?

You have the right to return any product if it doesn’t meet the guarantees set out in the CGA. This includes clothing you’ve worn or items you’ve opened and used. There is also no rule that things can only be returned if they’re in resaleable condition.

Max, Barkers, Temu, Bed Bath and Beyond and Rebel Sport all risked misleading consumers about this.

Can some items even be returned at all?

Unlike some retailers, the CGA doesn’t prohibit returns on certain product categories. If your underwear develops a hole after 15 wears, you’re covered by the CGA – it doesn’t matter that you’ve worn it. The same goes for toiletries, swimwear, athletics gear, sale items, custom or special-order goods.

If it doesn’t meet the guarantees, you’re entitled to a remedy.

We found two retailers that risked misleading consumers about this: Barkers and Temu.

Who pays for return deliveries?

If your product doesn’t meet the guarantees set out in the CGA, the retailer is responsible for paying return delivery fees, not you. Any statements that claim return delivery fees are non-refundable can risk misleading customers.

We found blanket statements made by Max, Barkers and Temu that gave the impression consumers were liable for return delivery costs in all circumstances.

However, you may be responsible for shipping costs in other cases, like if you change your mind. In those cases, it’s up to the retailer to decide who should pay the return delivery costs.

What laws apply?

If you’re buying goods in New Zealand, New Zealand laws apply – even if the goods come from Australia or an Australian business. If the business is trading in New Zealand, our laws apply.

We found Briscoes’ online terms and conditions risked misleading consumers about which law applied by claiming Australian consumer laws governed transactions.

What if an item doesn’t match what was advertised?

Chemist Warehouse’s returns policy states it will only provide a remedy where a product is “significantly different than those shown or described to you”.

The CGA does not require a product to be significantly different from those shown or described to you to make you eligible for a remedy. The act says you’re entitled to a remedy when the goods don’t comply with a sample or description. If what you get is different from what you’ve seen, you’ve got rights.

What does the word ‘faulty’ mean?

We found many businesses correctly informed consumers about their rights. However, statements frequently used the word ‘faulty’ to mean simply when a product fails to meet a guarantee.

For example, “You are entitled to a remedy under the CGA if your product is faulty.” You might think the word faulty means a physical defect, rather than a failure to meet a guarantee.

A customer who receives a toaster that doesn’t match the description on the website could be confused about their rights. They might think the toaster needs to arrive with a broken plunger to be faulty. But both instances could be considered faulty under the CGA.

We would like businesses to be clearer and say “If your product does not meet a consumer guarantee” instead of “If your product is faulty”.

Results snapshot

Retailers respond

We sent the findings of our sweep to each retailer. Here’s how they responded.

Note: The following retailers did not respond to our request for comment in time:

• Briscoes

• Rebel Sport

Barkers and Max

Before we published this article, Max changed its policy to note that delivery fees were refundable if the product was faulty. A spokesperson for both retailers said “Barkers and Max are and have always been committed to 100% customer satisfaction.

“While our returns policy may have been interpreted as not being compliant, we take the CGA very seriously and in practice would never decline any reasonable request for an exchange or refund on any product our customers are not satisfied with.”

“Our policies and procedures are regularly reviewed and in response to conversations with Consumer NZ and this article, Barkers and Max will do a full review of our returns policies and will amend accordingly.”

Bed Bath and Beyond

A spokesperson for Bed Bath and Beyond said “At Bed Bath & Beyond, we fully support clear communication of consumer rights under the Consumer Guarantee Act (CGA) and the Fair-Trading Act (FTA). Our returns policy is intended to give customers additional flexibility for change of mind purchases, while ensuring compliance with the CGA for any goods that are faulty.”

“We’ve taken your feedback on board and have already adjusted the wording of our policy to make that distinction clearer. Specifically, to ensure it’s evident that the stated timeframes and conditions apply only to change-of-mind returns, and that consumer guarantees always apply where goods are faulty or not as described.”

Chemist Warehouse

Chemist Warehouse confirmed that after our investigation, it made changes to its policy. A spokesperson said “We acknowledge the statement may cause confusion to some and have now updated it... We hope this provides greater clarity and aligns with the intent of the message.”

Foodstuffs

A spokesperson for Foodstuffs said: “Our policy on refunds and returns is designed to operate in addition to, and not in place of, the obligations all Foodstuffs stores have under the Consumer Guarantees Act 1993 (CGA) and other applicable laws. The Policy does not, and is not intended to, limit a customer’s legal rights under the CGA or otherwise.”

“We’re always open to feedback on how we can continue to improve the way we serve our customers.”

Temu

A Temu spokesperson said “We share Consumer NZ’s goal of protecting consumer rights because it is essential to building trust and long-term relationships with consumers.

“Temu operates in line with New Zealand’s consumer protection laws, including the Consumer Guarantees Act and the Fair Trading Act. When a product is faulty or falls short of expectations, customers are entitled to remedies under these laws, and our practices support that.”

“We are reviewing some website wording to make these protections clearer and easier to understand. We value feedback that helps us keep improving and provide a better experience for everyone who shops with us.”

Why is it so hard to find information about your rights?

We found that many businesses hide information about consumer rights behind a customer service gate. Instead of listing returns and refunds policies on their website, they require consumers to call, submit a ticket or email a representative with their questions.

We would like to see businesses be upfront about consumer rights. An easily accessible webpage dedicated to informing consumers of their rights goes a long way to building trust.

Businesses and regulators must step up

With the concerning results of our sweep, one thing is clear: online returns policies that risk misleading consumers about their rights are commonplace. Even though the FTA prohibits this conduct, we weren’t surprised with our findings.

In industries that commonly call the customer ‘king’, we’re asking for better service. Businesses should:

• regularly review their policies to ensure they comply with the law

• makes sure staff are adequately trained to follow the policies and the law

• be upfront with consumers about their rights

• not mislead consumers about their rights.

We’re also calling on the Commerce Commission to bolster enforcement practices. The Australian Competition and Consumer Commission (ACCC) – the equivalent of our Commerce Commission – researched more than 2,000 Australian retail websites. It found some businesses risked breaching Australian consumer laws and sent warning letters to those businesses.

ACCC deputy chair Catriona Lowe said, “Our action led to the majority of the businesses changing or removing concerning statements from their websites and improving consumer guarantee messages to consumers.”

Regular sweeps will help consumers and businesses.

• They will lead to the removal of some risky statements from returns policies.

• Combined with warning letters (and, in some cases, effective enforcement action), they will incentivise businesses to comply with the law in the first place.