Return Policy (New Zealand)

A Return Policy in New Zealand sets the organisation's rules and expectations on returns and the responsibilities of staff and users, supporting compliance with the Companies Act 1993.

The Consumer Guarantees Act 1993 is the primary legislation governing returns and remedies for defective goods and services in New Zealand. The CGA implies mandatory guarantees into every supply of goods or services to a consumer (defined as a person who acquires goods or services of a kind ordinarily acquired for personal, domestic, or household use). For goods, the CGA guarantees include acceptable quality (s 6), fitness for particular purpose (s 8), correspondence with description (s 9), and title (s 12). For services, the CGA guarantees include reasonable care and skill (s 28), fitness for purpose (s 29), completion within a reasonable time (s 30), and reasonable price where no price is agreed (s 31).

The CGA creates a distinction between a failure of substantial character (s 21) and a minor failure. For a failure of substantial character, the consumer has the right to choose the remedy — they may reject the goods and receive a refund or replacement, or keep the goods and receive compensation for the reduction in value. For a minor failure, the supplier has the right to choose the remedy (repair, replace, or refund), provided they do so within a reasonable time. This is the core of the CGA's return and remedy framework, and any New Zealand Return Policy must accurately reflect it.

Unlike the United Kingdom and the European Union, New Zealand does not have a statutory cooling-off period for online or distance sales. There is no automatic right to cancel an online purchase within 14 days simply because the purchase was made online. Change-of-mind returns are entirely discretionary for New Zealand businesses — you may offer them as a customer service benefit, but you are not legally required to do so. Your Return Policy should clearly distinguish between change-of-mind returns (discretionary) and CGA returns (mandatory).

Every New Zealand business that sells goods or services to consumers needs a Return Policy. This applies whether you are a bricks-and-mortar retailer, an online store, a service provider, or a B2B supplier that also deals with consumers.

For online retailers, a Return Policy is particularly important because customers cannot physically inspect goods before purchasing. Consumer Protection NZ (part of the Ministry of Business, Innovation and Employment) expects online retailers to clearly communicate their return and refund policies before a customer completes a purchase. Your Return Policy should be accessible before checkout — typically linked in your website footer and Terms of Sale — so that customers can make an informed decision.

For bricks-and-mortar retailers, signs and policies that falsely suggest 'no refunds' or 'no exchanges' are unlawful if they imply that consumers have no rights under the Consumer Guarantees Act 1993. The Commerce Commission, which enforces the Fair Trading Act 1986, investigates and takes action against businesses that misrepresent consumer rights.

For service businesses, the CGA consumer guarantees for services (ss 28-31) are often overlooked. A Return Policy for services should explain what happens when a service fails to meet a consumer guarantee — including the consumer's right to cancel a service contract and receive a refund where there is a failure of substantial character under section 37 of the CGA.

For B2B businesses, the CGA applies only to 'consumer' transactions. Section 43 of the CGA permits B2B parties to contract out of the consumer guarantees in writing where both parties are 'in trade' and it is fair and reasonable to do so. A B2B Return Policy may include a contracting-out clause under s 43, but a consumer-facing Return Policy must not attempt to exclude CGA rights.

A well-drafted Return Policy also reduces the risk of disputes and complaints to the Disputes Tribunal, Consumer Protection NZ, and the Commerce Commission — all of which are accessible to consumers at low or no cost.

A compliant New Zealand Return Policy should include the following key elements.

The Consumer Guarantees Act 1993 statement sets out the consumer's statutory rights for goods (ss 6-12) and services (ss 28-31) and must not misrepresent or limit those rights. This is the most critical element — any policy that purports to deny or limit CGA rights in consumer transactions breaches the Fair Trading Act 1986.

The failure of substantial character and minor failure distinction explains the CGA's remedy hierarchy. Where a failure is of substantial character (s 21 CGA), the consumer chooses the remedy. Where a failure is minor, the supplier may choose the remedy, provided it is done within a reasonable time. A clear explanation of this distinction reduces disputes and demonstrates good-faith compliance with the CGA.

The change-of-mind returns clause clearly distinguishes your discretionary policy from your mandatory CGA obligations. It specifies the conditions for discretionary returns (time limit, condition of goods, proof of purchase) and makes clear that these conditions do not limit the consumer's statutory CGA rights for faulty goods or services.

The non-returnable items clause lists categories of goods excluded from your change-of-mind returns policy (e.g. perishables, personalised items, opened hygiene goods). This must include a clear statement that CGA rights apply to all goods regardless of these exclusions.

The return shipping clause states who bears the cost of return postage. For CGA consumer guarantee returns, the supplier bears the cost. For change-of-mind returns, the customer may be required to pay.

The refund method and timing clause specifies how and when refunds are processed — all amounts in NZD and within a reasonable time.

The complaints and dispute resolution clause refers consumers to the Disputes Tribunal (for claims up to NZD $30,000 under the Disputes Tribunal Act 1988), Consumer Protection NZ (www.consumerprotection.govt.nz), and the Commerce Commission (www.comcom.govt.nz) for Fair Trading Act 1986 complaints. This demonstrates transparency and compliance with New Zealand consumer law.

The digital goods clause should address the treatment of digital downloads, software, and streaming services. Under the Consumer Guarantees Act 1993, digital services supplied to consumers must meet the guarantees of reasonable care and skill (Section 28) and fitness for purpose (Section 29). A Return Policy for digital goods should clearly explain that where a digital product fails to meet a consumer guarantee, the consumer is entitled to a remedy under the CGA regardless of whether the product has been accessed or downloaded.

The policy review clause should note that the Return Policy is reviewed periodically to ensure continued compliance with the Consumer Guarantees Act 1993, the Fair Trading Act 1986, and any enforcement guidance issued by the Commerce Commission. Businesses in New Zealand are encouraged to monitor Commerce Commission guidance on consumer rights, particularly in the areas of online retail and digital goods.

Under New Zealand law, Section 6 of the Consumer Guarantees Act 1993 guarantees acceptable quality, Section 21 defines a failure of substantial character, and Section 43 permits B2B contracting-out where fair and reasonable. Regulatory oversight falls under the Commerce Commission (Fair Trading Act 1986 enforcement), Consumer Protection NZ (part of the Ministry of Business, Innovation and Employment), and the Disputes Tribunal for individual consumer disputes. Appeals lie to the District Court of New Zealand. The forms-legal.com Return Policy (New Zealand) provides a ready-to-use template covering all these key elements and meeting all New Zealand legal requirements under the Consumer Guarantees Act 1993 and the Fair Trading Act 1986.