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A brief overview of the Consumer Guarantees Act print Print

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As a business owner, you need to have an understanding of the Consumer Guarantees Act. We give you a brief overview of the Act and how it affects your business.

What the Consumer Guarantees Act covers

Consumer Guarantees Act

You don’t need to be afraid of the Consumer Guarantees Act if you’re honest, competent, and have a good understanding of it. If you know the rights of your customers, and you’re communicating clearly with them, most disputes can be avoided.

What products and services are covered by the Act?

Generally the Act covers goods and services that are normally bought by your customers for personal, domestic or household use. Goods used for a business purpose, such as farm machinery, are generally not covered by the Act. There are a few exceptions, and the Consumer Affairs site has more detail on what goods and services are covered.

To stay on the right side of the Act and your customers, you need to be aware that, in general, every time you sell a good or service that’s intended for personal, domestic or household use, you’re automatically making the following guarantees.


  • Acceptable quality – all goods have to do what they’re designed to do. They should be safe, durable, have no defects and look acceptable.
  • Fit for a particular purpose - for example, if your customer has told you they want a bike to use for mountain biking and you sell them a road bike; they’ve got a good reason to complain.
  • Match the description – if a customer sees a product in a catalogue, your window, on your website or other advertising material, and the one you sell them doesn’t match up, they can complain. For instance, if you’re advertising a barbeque that has a spit-roast function, and you sell a customer one that doesn’t have one and you haven’t clearly explained this before the customer buys the barbeque, they’ve got grounds for a complaint.
  • Clear title and repossession terms – if you’re a car dealer, you can’t sell a car if money is still owed on it by the previous owner and you haven’t informed your customer about this. If you claim the right to repossess something – such as payments not being made – the terms have to be clear and in writing at the time of purchase and your customer must have received those terms.
  • Parts and repairs – manufacturers need to be able to provide spare parts and repair facilities for a ‘reasonable’ period of time for new products and any second-hand ones imported to be sold in New Zealand for the first time.

    It’s up to you to deal with faulty goods you’ve sold. You can’t pass the buck to the manufacturer. If your customer has asked you to sort it out, then it’s your responsibility to do so by fixing it, replacing it, or refunding it. The only thing the customer is responsible for is to report a faulty good within a reasonable time.


If your business is service-based, then you’re also automatically providing guarantees. Your customer has the right to expect:

  • Reasonable care and skill – the work you do must be of the same standard of skill and care used by other competitors or people doing the same work.
  • That the work is fit for purpose – for example, if you hire an electrician to install a light fitting and once they’ve left it’s not working, the work is not fit for purpose.
  • Reasonable time – if completion times have not been agreed, you must complete the task within a reasonable time.

The customer’s rights

If any of the above guarantees are not met, then below are some of the things that customers can do, depending on the circumstances:

  • Ask the supplier to replace goods, refund payment for the goods, or fix the problem.
  • Get the problem fixed by someone else if the supplier refuses or hasn’t been able to fix it within a reasonable time. The customer could then recover the costs of fixing the problem.
  • Cancel their contract for services with the supplier.

It’s also important to be aware that, if a supplier has sold faulty goods which damage something as a consequence, the customer might be able to claim these costs. So if the faulty toaster sold causes a fire in the kitchen, the supplier could be facing costs for damages.


As you can see, the Consumer Guarantees Act is mainly about common sense. If you have confidence in your goods or services, and are focused on providing a great customer experience, there’s no reason for you to be on the wrong side of it. The Consumer Affairs site has more detail on the Act.

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