Consumer Guarantees Act

As Christmas is upon us I thought I would write about a topic appropriate to the season of excessive consumer expenditure.

It is not an uncommon experience to purchase an item and then regret the purchase soon after coming home. Sometimes that regret sets in, in respect of clothing items, when a less than enthusiastic response is received to the anxious query “Does it suit me?” Can you then immediately return that item and get your money back?

The short answer is no. The Consumer Guarantees Act of 1993 does provide wide-ranging protection for consumers but doesn’t provide protection against ill-considered purchases. However most large retail chains pride themselves on accepting goods back and giving refunds without question. With smaller shops often you can reach an arrangement whereby the shop owner will let you return the goods the next day if you change your mind. Some have a scheme called “cash appro” where you pay in full by credit card, but they rip up the transaction document if the goods are returned the next day. Many shops, particularly in the clothing line, will not give you a cash refund but rather a credit to be offset against further purchases. Providing there was nothing wrong or faulty with the goods it’s perfectly okay for the retailer to make that sort of condition.

If however you find out that the goods are faulty in some respect or don’t perform in the way that they are supposed to then you have an absolute right to return the goods and, your choice solely, either get a full cash refund or exchange the goods for some other item or a shop credit.

You occasionally find shops with signs displayed saying something to the extent of “no refunds - please choose carefully”. Strictly speaking such signs are illegal under the Fair Trading Act. Whilst you can’t simply ask for a refund if you’ve changed your mind, you can ask for a refund if there’s some fault in the product.

Many people at this time of year also find themselves in the position where they have put goods aside on “lay-by” for Christmas gifts or celebrations. If for economic or any other reason you cannot complete the purchase can you cancel it and get your money back? The answer is yes. You can cancel any item you put on lay-by which is valued at less than $1,000 at any time before the total amount is paid. You may find that the retailer asks for a small contribution towards “costs of sale” such as storage costs or staff time involved or loss of value of the product. Providing these are reasonable and not inflated the retailer can deduct the same from the money that you paid in.

Most retailers take a reasonable approach. They know that one dissatisfied customer tells twenty other potential customers about their dissatisfaction, and that is bad for business. Some retailers, particularly certain large nation-wide chains, are justifiably famous for the extent to which they will go to keep the customer happy.

I have to say that I have some sympathy for those in the “rag-trade”. It is a highly competitive and cut-throat business, with its own unique problems and difficulties. I recently purchased some clothing from a Queensgate retailer who, while ringing up the purchase, had his eye on about five changing rooms packed out with young teens trying on various items for the approval or otherwise of their friends. He despaired to me that this process (which reached a high peak just after 3 pm!) often seemed to be more of a fun or social occasion than a commercial exercise that would result in money in his till!

For those of you retailers and purchasers who are concerned about your respective rights and remedies can I recommend the excellent website Consumers Institute of New Zealand which can be found at

Finally, as all family lawyers know, Christmas can be a volatile and stressful time of year. I hope you all survive it well and that the new millennium ushers in a golden age for Lower Hutt and all its citizens.

Jamie Steele is a partner in Lower Hutt law firm Keesing McLeod.