NZ Consumer Guarantees Act (CGA)

NZ Consumer Guarantees Act (CGA)

Why It Matters

The CGA is the cornerstone of consumer protection in New Zealand. If your buyers are NZ consumers, the CGA will almost always apply. Failing to follow it can lead to disputes, enforcement action, and damage to your reputation. By knowing your responsibilities, you can reduce the risk of conflict and keep customers happy.

Info
The CGA only applies to consumer purchases (personal, domestic, or household use). Business-to-business sales may be exempt if both parties agree in writing.

What the CGA Guarantees

The Act sets out automatic guarantees that goods and services must meet.

For Goods (Products)
  • Acceptable quality: Safe, durable, free from defects, and fit for normal use.
  • Fit for purpose: Must do what they are meant to do, and what you said they would.
  • Match description: Must be as described in your listing, including size, colour, and specifications.
  • Match sample or demo: If sold by example, the delivered product must be the same.
  • Repairs and spare parts: Reasonable availability must be provided.
  • Ownership rights: You must have the right to sell the goods (no encumbrances).

Handling Faulty or Misdescribed Items

  • If a fault is minor, you can choose to repair, replace, or refund.
  • If a fault is major (unsafe, unfit for purpose, significantly different to description), the buyer chooses the remedy — usually a refund or replacement.
Alert
You cannot refuse a return or say “no refunds” for issues covered by the CGA.

Customer Expectations

  • Customers expect issues to be resolved quickly.
  • The remedy must not cause significant inconvenience.
  • Refunds must be made in the same form as payment, unless agreed otherwise.

Exceptions

The CGA does not cover:
  • Damage caused by misuse or neglect.
  • Goods bought for resale or commercial use (unless the seller did not disclose limits).
  • Change-of-mind returns (unless you choose to offer these).

Notes
Many sellers choose to offer a goodwill “change-of-mind” return policy, but this goes beyond the CGA and is optional.

Best Practices for Vendors

  • Be transparent: Describe your products accurately and include clear photos.
  • Keep records: Document customer complaints and how they were resolved.
  • Act quickly: Don’t delay — quick resolutions build trust.
  • Train your team: Make sure anyone handling returns knows the basics of the CGA.
  • Offer more if you wish: You can go beyond the law with extra warranties, but they must not limit CGA rights.

FAQs

1. Do I have to refund if the buyer just changes their mind?

 No. The CGA does not cover change-of-mind returns. You can choose to allow them as a goodwill policy.

2. What if the customer damaged the item?

 If damage is caused by misuse or neglect, you are not required to provide a remedy under the CGA.

3. Can I offer a store credit instead of a refund?

 Not if the buyer is entitled to a refund under the CGA. Store credit is only acceptable if the customer agrees.

4. Does the CGA apply to second-hand goods?

 Yes, but expectations may differ. For example, “acceptable quality” for a used item takes into account its age and condition.

5. What if I’m selling to an overseas buyer?

 The CGA only applies to consumers in New Zealand. International sales are subject to the laws of the buyer’s country.

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