Consumer Guarantees Act 1993 in NZ: Business Compliance Guide (2026)

If you sell products or services in New Zealand, the Consumer Guarantees Act 1993 (often shortened to the “CGA”) is one of those laws you can’t afford to ignore.

It’s easy to think of consumer law as something that only affects big retailers, but the reality is that the CGA applies to everyday small business situations - from online orders and in-store sales, to quoting for services, repairs, and ongoing support.

Getting your CGA approach right isn’t just about avoiding disputes. It’s also about building trust, reducing refunds and chargebacks, and making sure your staff know what to say (and what not to say) when a customer complaint comes in.

What Is The Consumer Guarantees Act 1993 (And Why Does It Matter For Your Business)?

The Consumer Guarantees Act 1993 is a New Zealand law that gives consumers certain automatic legal rights (called “guarantees”) when they buy goods or services from a business.

These guarantees are not optional. They apply automatically, even if:

• you didn’t mention them in your policies;
• your receipt says “no refunds”;
• your terms try to limit liability (unless contracting out applies - we’ll cover that below); or
• the customer didn’t buy a warranty.

In simple terms, the CGA sets a baseline standard for what customers can expect when buying from you - and what you have to do if something goes wrong.

It also works alongside other laws you’ll likely deal with, including the Fair Trading Act 1986 (which focuses more on misleading claims and advertising). So even if an issue doesn’t neatly fit into the CGA, it may still create risk under other consumer laws.

When Does The Consumer Guarantees Act 1993 Apply To Your Sales?

The CGA generally applies when:

• a consumer buys goods or services; and
• they buy from someone “in trade” (i.e. your business).

Who Counts As A “Consumer”?

A consumer is typically an individual buying goods or services for personal, domestic, or household use.

Importantly, the CGA generally does not apply where the buyer acquires the goods or services for business purposes (for example, to use “in trade”, for a commercial project, or to on-supply). So even if the item looks like a “consumer-type” product, if it’s being bought for business use, the CGA may not apply.

In practice, this can get tricky where a buyer has both personal and business connections (for example, sole traders or contractors). The safest approach is to clarify (and document) what the purchase is for, and get advice if you’re regularly dealing with mixed-use situations.

Does The CGA Apply To Business-To-Business (B2B) Transactions?

Often, B2B transactions fall outside the CGA because the buyer is acquiring the goods or services for business purposes - but that isn’t something you should assume without checking the circumstances.

• If you’re selling to another business, you should consider whether you can (and should) contract out of the CGA.
• If you’re selling to a consumer, you generally can’t contract out of the CGA.

We cover contracting out in more detail below, because it’s one of the most practical CGA tools for businesses selling to commercial customers.

What If The Customer Changes Their Mind?

This is a big one for small businesses: the CGA is mainly about goods/services that are faulty or not as promised. It does not automatically create a general “change of mind” right.

However, you still need to be careful about how you describe your returns and refunds approach, because if your marketing or store policy suggests customers can return for any reason, that can become an expectation you’ll need to honour (and it can also trigger issues under the Fair Trading Act if your policy is misleading).

What Guarantees Do You Owe Under The Consumer Guarantees Act 1993?

The CGA includes a set of automatic guarantees for goods and services. You don’t need to list them in your contract - they apply by law.

Guarantees For Goods

If you sell products, some of the key CGA guarantees include that goods will be:

• Of acceptable quality (safe, durable, free from defects, acceptable in appearance/finish, and doing what they’re normally expected to do);
• Fit for purpose (including any specific purpose the customer tells you about and relies on you for);
• Match their description (including online listings, packaging, and sales discussions);
• Match a sample or demonstration model (if the sale was based on one);
• Have spare parts and repair facilities available for a reasonable time (where relevant);
• Have clear title (the buyer should own it, and it shouldn’t be subject to undisclosed security interests).

“Acceptable quality” is one of the most argued-about concepts in practice, because it depends on context - such as what the goods are, what a reasonable consumer would expect, any statements made about the goods, and the price paid.

If you sell goods where failures can create real harm or loss, it’s also worth understanding how consumer guarantees can overlap with product liability risk, especially if defects cause property damage or injury.

Guarantees For Services

If you provide services (including professional services, trades, repairs, digital services, memberships, and ongoing support), key CGA guarantees include that services will be:

• Provided with reasonable care and skill;
• Fit for the particular purpose (where the customer relies on your skill/judgment);
• Completed within a reasonable time (if no timeframe is agreed);
• Provided for a reasonable price (if the price is not agreed beforehand).

For service businesses, disputes often arise because expectations weren’t clearly set at the start - for example: what is included, what is excluded, what assumptions you relied on, and what happens if the scope changes.

This is why having well-written business terms and conditions can make a huge difference. They won’t remove CGA obligations to consumers, but they can reduce misunderstandings and help you manage scope, timelines, and customer behaviour.

What Do You Have To Do If Something Goes Wrong (Repairs, Replacements, Refunds)?

The CGA sets out remedies when goods or services don’t meet the guarantees. What you must do can depend on whether the problem is considered minor or serious.

Minor Failures (Usually You Get The First Chance To Fix It)

If a failure is minor, you typically have the right to choose how to fix it - usually by:

• repairing the goods; or
• replacing the goods.

A refund isn’t usually the starting point for a minor failure. However, if you can’t (or don’t) remedy the problem within a reasonable time, the consumer may be able to have the issue fixed elsewhere at your cost, or reject the goods and seek a refund (depending on the circumstances).

For services, fixing it may involve re-performing the service within a reasonable time. If you don’t fix the problem within a reasonable time (or can’t fix it), the customer may be able to get someone else to fix it and recover the reasonable cost from you, or cancel the service contract (where appropriate).

The key practical point is this: if it’s a minor issue, the consumer usually needs to give you a reasonable opportunity to put it right.

Serious Failures (The Customer Often Gets More Choice)

If the failure is serious, consumers may be entitled to:

• reject the goods and choose a replacement or refund; and/or
• claim compensation for reasonably foreseeable loss resulting from the failure.

“Serious” can mean different things, but it generally includes issues where:

• the goods are unsafe;
• the goods are substantially unfit for purpose and can’t easily be fixed within a reasonable time;
• a reasonable consumer wouldn’t have bought the item if they’d known about the problem; or
• the goods are significantly different from their description/sample.

For services, a serious failure can include where the problem can’t be remedied, or can’t be fixed within a reasonable time, or where the service creates a significant risk of harm.

Can You Send The Customer To The Manufacturer?

Many businesses get caught here. Even if the manufacturer offers a warranty, the consumer’s rights under the CGA are typically against the supplier (you) - not just the manufacturer.

You may have rights against your supplier or manufacturer behind the scenes, but from the customer’s perspective, you’re usually the first point of responsibility. This is why good supplier agreements and clear internal processes matter.

If your business provides (or promotes) additional warranties, you’ll also want to make sure those warranty terms don’t misstate or undermine CGA rights - because that can create extra compliance issues.

Can You Contract Out Of The Consumer Guarantees Act 1993 In New Zealand?

Yes - but only in specific situations, and only if you do it properly.

If you sell goods or services to another business for business purposes, you may be able to contract out of the CGA. In practice, this is common for wholesalers, B2B suppliers, professional services firms, and companies selling high-value equipment to commercial customers.

When Contracting Out Is Usually Available

Contracting out is generally available when the goods or services are supplied:

• between businesses (not a consumer sale); and
• for business purposes; and
• the contracting out clause is in writing; and
• the contracting out clause is fair and reasonable in the circumstances.

That “fair and reasonable” test matters. It’s not enough to hide a clause in tiny text and hope for the best. The fairness can depend on things like bargaining power, whether the customer knew about the clause, whether you gave them a real opportunity to review it, and the nature/value of the transaction.

How Businesses Commonly Get This Wrong

Contracting out failures usually happen when:

• the clause isn’t clearly brought to the other party’s attention before the deal is made;
• the sale is made on informal terms (like “just pay the invoice”) with no proper agreement;
• the clause is overly broad or harsh (making it harder to argue it’s fair and reasonable); or
• the buyer is actually a consumer, even if they have a business name on the invoice.

If contracting out is important to your business model, it’s worth getting your contracts professionally drafted or reviewed, rather than relying on generic templates that may not reflect how you actually sell.

How Do You Stay Compliant In Practice (Without Killing The Customer Experience)?

Most CGA issues aren’t caused by “bad businesses”. They happen because expectations aren’t aligned, staff aren’t sure what to say, or refund processes are inconsistent.

Here are practical steps you can take to stay CGA-compliant while keeping your customer experience strong.

1. Get Your Customer-Facing Terms And Policies Right

Your website, receipts, invoices, and in-store signage should support (not fight) your CGA obligations.

Focus on:

• Clear returns/refunds wording that doesn’t wrongly say “no refunds” for faulty goods;
• Practical process steps (e.g. proof of purchase options, expected assessment timeframes, how to lodge a claim);
• Accurate exclusions (for example, damage caused by misuse is different from a manufacturing fault);
• Service scope clarity for service providers (what’s included, what’s an extra, and what you need from the customer).

It often helps to house these rules in your core customer documents - like your online store terms. For eCommerce businesses, having fit-for-purpose Online Shop Terms can make your refund process clearer and reduce “he said / she said” disputes about what the customer agreed to.

2. Train Staff On The Difference Between CGA Rights And “Change Of Mind” Returns

Your team should be confident explaining that:

• if a product is faulty or not as described, CGA remedies may apply; but
• if a customer simply changes their mind, your store policy applies (as long as it’s not misleading).

This small script-level clarity can prevent escalations and negative reviews.

3. Be Careful With Fees And Deductions

If you charge cancellation fees, restocking fees, or deductions from refunds, you need to ensure your approach is lawful and clearly disclosed upfront.

This is especially important for service businesses (appointments, bookings, projects, subscriptions). If you rely on cancellation fees to protect your time, make sure the terms are written in a way that’s realistic and defensible - including when the CGA applies and when it doesn’t. Many businesses formalise this in their cancellation fees terms, so customers can’t say they were never told.

4. Manage Advertising And Sales Claims (Because CGA Disputes Often Start There)

CGA complaints frequently start with a marketing claim like:

• “lasts 10 years”
• “waterproof”
• “safe for children”
• “same day service”
• “won’t fade”

If you make product or performance claims, be ready to support them. Even if the CGA issue is about “acceptable quality” or “fit for purpose”, the customer will often rely on what your business promised (explicitly or implicitly) when they purchased.

5. Keep A Simple “CGA Triage” Process For Complaints

When a complaint comes in, you’ll save time (and stress) if you triage consistently. For example:

• Step 1: Confirm proof of purchase and date of purchase.
• Step 2: Identify whether it’s goods or services.
• Step 3: Ask: what’s the issue, and what outcome is the customer asking for?
• Step 4: Assess: is it likely a minor failure or serious failure?
• Step 5: Offer the appropriate remedy (and document what you agreed).

If a dispute escalates, having written notes of what was provided, what the customer reported, and what remedy you offered can be invaluable.

6. Don’t Forget Your Website Disclaimers (But Use Them Properly)

A disclaimer won’t magically remove CGA obligations to consumers. But disclaimers can still be useful for managing expectations around:

• general information (especially in advice-based industries);
• availability or lead times;
• third-party products/services; and
• limitations in what you’ve assessed or relied on.

If your business uses disclaimers, it’s worth ensuring they’re actually aligned with NZ law and your real-world customer journey, rather than copied from overseas websites. Many businesses build this into a properly drafted Disclaimer.

Key Takeaways

• The Consumer Guarantees Act 1993 applies automatically to many NZ sales of goods and services to consumers, and it sets minimum guarantees you can’t simply opt out of.
• For goods, key CGA guarantees include acceptable quality, fitness for purpose, and being consistent with descriptions or samples.
• For services, key CGA guarantees include being carried out with reasonable care and skill, being fit for purpose, and being completed within a reasonable time (if no time is agreed).
• If something goes wrong, remedies depend on whether the failure is minor or serious - and you should have a consistent internal process for handling complaints.
• You may be able to contract out of the CGA for genuine B2B transactions, but the clause must be in writing and fair and reasonable, so it’s worth getting proper legal drafting.
• Clear policies and well-drafted customer terms can reduce CGA disputes by aligning expectations from day one - especially for online stores and service businesses.

If you’d like help reviewing your customer terms, returns/refunds approach, or whether you can contract out of the Consumer Guarantees Act 1993 for B2B deals, reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.