The Consumer Guarantees Act for NZ Online Stores

Short answer: If you sell regularly online to New Zealand customers, the Consumer Guarantees Act applies to you exactly as it does to a physical shop: products must be of acceptable quality, fit for purpose, match their description and arrive on time in acceptable condition. Minor faults let you choose to repair, replace or refund; serious faults let the customer choose. You can't contract out with consumers at all, only with other businesses in writing where it's fair and reasonable, and you must make it clear online that you're in trade.

Who the CGA applies to online

Consumer Protection's business guidance is blunt: the CGA "applies equally to established bricks-and-mortar businesses, internet traders and temporary operations like pop-up shops." It covers anyone in trade, which the guidance defines as "regularly selling products or services, or regularly buying to sell on." You don't need to be GST-registered or have staff; frequency decides it. That includes regular Trade Me sellers. One-off garage sales and occasional online auctions by private people are outside it.

The Commerce Commission adds a duty specific to online sellers: if consumers can buy from you online, "you must also make it clear that you are in trade," so buyers know the Fair Trading Act and CGA protect them. A business name, NZBN or GST number and a clear "about us" page usually do this; marketplaces often have a trader flag you should tick.

The guarantees for products, in short:

acceptable quality (appearance, finish, free of small faults, fit for normal purposes, safe, durable);
fit for any particular purpose the customer told you about;
match the description and any sample;
a reasonable price if none was agreed;
delivered on time and in acceptable condition when you arrange delivery;
spare parts and repairs available, or the customer told before purchase if not;
clear title (no money owing on the goods).

Now the scenarios. Each one is hypothetical and is the kind of situation online stores deal with every week.

Scenario 1: "It arrived broken"

A customer's ceramic lamp arrives in pieces. The courier clearly dropped it.

What the law says: Delivery is your responsibility when you send products. The guidance lists your duties: package carefully, choose a reliable carrier, have insurance for breakages, and negotiate a suitable contract with the carrier. It's explicit that "You must not tell them to complain to the delivery company."

What to do: Apologise, ask for a photo, and send a replacement or refund. Then claim from the courier yourself.

Scenario 2: "It stopped working after a month"

A blender's motor fails after five weeks of normal use.

What the law says: That's a failure of acceptable quality, including durability. Whether it's minor or serious decides who picks the remedy. For a minor fault that can be fixed, you choose: free repair, identical replacement or full refund, and the customer must accept your choice. A fault is serious if a reasonable customer who knew about it wouldn't have bought the product, if it's significantly different from the description, if it can't easily be made fit for purpose in a reasonable time, or if it's unsafe. For serious faults the customer chooses the remedy, and in practice that means a refund or replacement.

What to do: For a motor that burns out early on a cheap blender, a replacement or refund is usually faster and cheaper than a repair. The guidance itself suggests thinking twice before offering expensive repairs.

Scenario 3: "It's not what the photo showed"

A rug listed as "100% wool" turns out to be a blend.

What the law says: Products must match their description. Consumer Protection uses almost this exact example (a jersey described as 100% wool that's 30% acrylic) to illustrate a serious problem. It's also likely a Fair Trading Act issue, because the listing was misleading.

What to do: Accept the return, refund in full including outbound shipping, and fix the listing today.

Scenario 4: "I just don't like it"

A customer wants to return a jacket because the colour isn't right on them.

What the law says: The CGA doesn't cover change of mind. The guidance lists it first among the situations where you don't owe a remedy.

What to do: Your own returns policy decides. Many stores offer change-of-mind returns as a sales feature. If you do, say so clearly and set the conditions (unworn, tags on, 30 days). Just never word it in a way that suggests faulty items are covered only within that window.

Scenario 5: "The delivery is three weeks late"

You promised dispatch "within 3 days" but the product was on backorder from overseas.

What the law says: Products must arrive at the agreed time, or within a reasonable time if none was agreed. The Commerce Commission also warns traders who don't hold stock not to promote goods unless they have a reasonable basis to believe they can fulfil the order as promoted.

What to do: Show real stock status and lead times on the product page. If you dropship, say "ships from overseas in 10 to 20 days," not "fast shipping."

Scenario 6: "We're a café, not a consumer"

A café buys a home-style coffee grinder from you for the business.

What the law says: The CGA typically still applies where the goods are of a kind usually bought for personal or household use. You can contract out only if all four conditions are met: you're dealing with another business or person in trade, both sides agree the CGA won't apply, the agreement is in writing, and it's fair and reasonable. A verbal agreement, or silence, means the CGA applies.

What to do: If you sell B2B through a trade account, put a clear contracting-out clause in the trade terms the buyer accepts at sign-up. Don't apply it to ordinary consumer checkouts.

Returns page wording that stays on the right side of the law

Avoid phrases like "no refunds," "all sales final," "faulty items must be reported within 7 days" or "warranty claims go to the manufacturer." They can mislead customers about their rights. A safer structure:

Faulty or not as described: "Your rights under the Consumer Guarantees Act aren't affected by this policy. If something is faulty, damaged in transit or not as described, contact us and we'll sort out a repair, replacement or refund as the law requires."
Change of mind (optional): your own conditions, clearly labelled as a goodwill policy.
How to contact you and what to send: order number, photos.
Who pays return shipping: for faulty items, you do.

This is general guidance based on public government advice, not legal advice for your business.

FAQ

Do I have to accept returns on sale items?

If a sale item is faulty, yes, the CGA still applies. If you pointed out a specific defect before the sale, that defect isn't covered. Change-of-mind returns on sale items are up to your policy.

Can I charge a restocking fee on a faulty return?

No. For a fault, the remedies in the guidance are a free repair, a replacement at no extra cost or a full refund. A restocking fee only belongs in a change-of-mind policy, and it should be stated clearly there.

Can overseas online stores ignore the CGA?

The Commerce Commission says the Fair Trading Act applies to businesses advertising or selling to NZ consumers online even if based overseas. Enforcement is harder, but NZ-based stores should assume full compliance.

How long do guarantees last?

There's no fixed period. Durability is judged by what's reasonable for that kind of product and price, so a premium washing machine should last much longer than a budget one.

If you'd like your product pages, delivery promises and returns page tightened up together, send a link to your store.