Consumer Guarantees Act vs Fair Trading Act: NZ eCommerce Rules

If you run an online store in New Zealand, you’re almost certainly dealing with consumer law every day - even if you don’t realise it.

Two of the big ones are the Consumer Guarantees Act 1993 (CGA) and the Fair Trading Act 1986 (FTA). They often get mentioned together, and they overlap in real-life scenarios, which is why so many business owners end up searching “consumer guarantees act vs fair trading act” when a complaint lands in their inbox.

The tricky part is that these laws do different jobs. If you treat them as the same thing, it’s easy to:

• promise the wrong remedy (and create a bigger dispute than needed);
• write website terms that don’t match what the law requires;
• make marketing claims that accidentally cross a legal line; or
• use “no refunds” language that can put you at risk.

Below, we’ll break down the Consumer Guarantees Act vs Fair Trading Act in plain English, with an eCommerce focus, so you can sell confidently and keep your customer experience (and compliance) on track.

What’s The Difference Between The Consumer Guarantees Act And The Fair Trading Act?

At a high level, the simplest way to understand the Consumer Guarantees Act vs Fair Trading Act is this:

• The Consumer Guarantees Act 1993 is mainly about product and service quality and what remedies customers have when something goes wrong.
• The Fair Trading Act 1986 is mainly about how you sell: advertising, product descriptions, pricing, claims, and avoiding misleading or deceptive conduct.

They can both apply to the same transaction. For example, if a customer buys a “100% genuine leather” bag from your website and it turns out to be synthetic:

• The FTA issues are about the claim (“100% genuine leather”) being misleading.
• The CGA issues are about the product not matching description and not being of acceptable quality for what was promised.

That overlap is why you should treat them as a package of obligations, not an either/or.

Do They Apply To All Customers?

This is where many disputes start.

• CGA: generally applies when you sell to a consumer. In NZ, that definition can include personal/domestic/household purchases, but it can also capture some higher-value purchases (for example, goods or services under a price threshold) even if they’re not strictly “household”. The CGA may also apply in some B2B situations unless you’ve properly contracted out (where allowed).
• FTA: applies much more broadly. It can apply in both B2C and B2B situations, because misleading conduct can happen regardless of who the buyer is.

So even if you’re mostly selling to business customers, you still need to take the FTA seriously.

How The Consumer Guarantees Act 1993 Applies To eCommerce Stores

The CGA gives consumers a set of automatic “guarantees” when they buy goods or services. You generally can’t contract out of these guarantees for consumer sales - and where contracting out is permitted (typically for certain business-to-business supplies), it needs to be done properly and in writing.

For online stores, the most relevant CGA guarantees for goods typically include that products must be:

• Of acceptable quality (safe, durable, free from defects, and acceptable given the type of product and price);
• Fit for purpose (including any purpose the customer made known to you);
• Matching description (including product page descriptions, specifications, and claims);
• Matching sample or demonstration model (where relevant); and
• Delivered within a reasonable time (where delivery is part of the supply and you’re responsible for arranging it).

If you provide services connected with your online store (for example, installation, customisation, or a paid subscription service), you also need to ensure the services are carried out:

• with reasonable care and skill;
• fit for purpose; and
• within a reasonable time (if no time is agreed).

What Remedies Do Customers Get Under The CGA?

The CGA remedies depend on whether a problem is considered “minor” or “serious”. In practical terms, this affects whether you get to choose a fix first (repair/replace) or whether the customer can reject the goods and demand a refund.

Common CGA remedy pathways in eCommerce include:

• Minor issue: you may be able to offer a repair, replacement, or remedy within a reasonable time.
• Serious issue: the customer may be able to reject the goods and choose a refund or replacement (and may also have other rights, including compensation for reasonably foreseeable loss in some cases).

This is why your customer support team (even if it’s just you) should have a consistent approach to assessing complaints, gathering evidence, and responding clearly.

It’s also why your Returns, Refunds And Exchanges approach needs to be aligned with the law - because the CGA sets a baseline you can’t go below.

Does The CGA Cover “Change Of Mind” Returns?

Not automatically.

A customer who simply changes their mind doesn’t necessarily have CGA rights to a refund. But there are two big “watch-outs” for online sellers:

• If your marketing or product page was unclear (size, colour, materials, compatibility, inclusions), a “change of mind” complaint can quickly turn into a misdescription issue.
• If you advertise an easy returns process, you need to honour what you’ve promised (and be careful you’re not misleading about what you offer).

This is where the Consumer Guarantees Act vs Fair Trading Act overlap in real life: you might think it’s just a refund policy question, but it can become a misleading representation issue if you advertised something else.

How The Fair Trading Act 1986 Applies To eCommerce Marketing And Sales

The FTA is often the bigger “day-to-day” risk for eCommerce businesses, because it governs what you say and how you present your products online.

In plain terms, the FTA is about ensuring you don’t mislead customers (even accidentally). It covers things like:

• Misleading or deceptive conduct (the overall impression matters, not just fine print);
• False or misleading representations (about price, quality, composition, origin, sponsorship/approval, performance, and more);
• Bait advertising (advertising something you can’t supply in reasonable quantities);
• Unsubstantiated representations (making claims you can’t back up); and
• Various unfair practices.

Common eCommerce FTA Risk Areas (Where Businesses Slip Up)

Here are some of the most common examples we see online:

• Pricing displays: incorrect “was/now” discounts, unclear currency, or hidden compulsory fees.
• Delivery promises: “next day shipping” claims when it’s actually an estimate or only applies in limited locations.
• Product descriptions: vague or exaggerated claims (“waterproof” when it’s only water-resistant).
• Stock availability: advertising products as available when you’re actually taking pre-orders or backorders.
• Customer reviews and testimonials: selectively editing, removing negative reviews, or posting reviews that aren’t genuine.
• “Made in NZ” or origin claims: getting country-of-origin wrong (this is a common compliance issue).

If you want a quick gut-check, ask: What overall impression would a reasonable customer take from my website? Under the FTA, the overall impression can matter as much as the technical detail.

Pricing is a big one. If you advertise a price, make sure you understand how the advertised price rules work, especially where there are add-ons, bundles, subscriptions, or shipping costs.

CGA vs FTA For Refunds, Returns And Warranties: Practical Scenarios

If you run an online store, customer complaints usually fall into a few predictable buckets. This is where understanding the Consumer Guarantees Act vs Fair Trading Act becomes genuinely useful, because you can identify what’s really being alleged - and respond in a way that’s lawful and commercially sensible.

Scenario 1: “The Item Isn’t What I Expected”

Likely legal angle: often FTA (misleading description) and CGA (not matching description / acceptable quality).

What to do:

• Compare the product received against your product page and any advertising.
• Check whether photos were representative (including colour variation disclaimers).
• Offer a remedy based on whether it’s a minor or serious failure under the CGA.
• If your product page caused confusion, fix it quickly (otherwise you risk repeat issues).

Scenario 2: “It Stopped Working After 3 Weeks”

Likely legal angle: primarily CGA (acceptable quality/durability), potentially also FTA if you made strong durability claims.

What to do: Don’t default to “manufacturer warranty only” language. Under the CGA, consumers may have rights against the retailer (you), regardless of what the manufacturer says.

This is also why it’s worth getting your warranty language and customer communications right. Having clear Warranties wording and a consistent process can prevent escalation.

Scenario 3: “Your Website Says No Refunds”

Likely legal angle: this can create a problem under both laws.

• Under the CGA, you generally can’t refuse CGA remedies for legitimate faults.
• Under the FTA, a blanket “no refunds” statement can be misleading if it suggests customers have no rights when the law says otherwise.

If you want to limit change-of-mind returns (which is common and often commercially necessary), you can still do that - you just need to word it carefully so customers understand the difference between:

• returns for faults (CGA rights apply), and
• returns for change of mind (your discretionary policy applies).

Scenario 4: “I Want A Refund For Late Delivery”

Likely legal angle: potentially CGA (delivery within a reasonable time, where delivery is part of the supply) and/or FTA if you advertised a delivery timeframe that wasn’t accurate.

What to do:

• Check what you promised at checkout, in your shipping page, and in confirmation emails.
• Look at whether delays were within your control (courier delays vs warehouse dispatch delays).
• Update your dispatch estimates and customer messaging if your business is scaling and timelines have changed.

This is where a properly drafted Shipping Policy can do a lot of heavy lifting - not by removing legal rights, but by setting accurate expectations (which helps reduce FTA risk and complaints).

What Should Your Online Store Do To Comply With Both Acts?

Most compliance is about getting your processes and your website content aligned, so customers aren’t confused and your team isn’t making ad-hoc decisions under pressure.

Here’s a practical checklist to help you manage CGA vs FTA compliance for eCommerce.

1) Make Product Pages Accurate (And Keep Evidence)

Product pages are not just marketing - they’re often the “description” customers rely on, and they can form the basis of both CGA and FTA complaints.

Check that your product pages are consistent across:

• the title and short description;
• specifications (materials, measurements, compatibility, inclusions);
• photos and videos (and any filters);
• country-of-origin claims; and
• performance claims (“kills 99.9% of bacteria”, “lasts 12 hours”, etc.).

If you make claims, make sure you can substantiate them. If you rely on supplier claims, consider whether you’ve independently verified them (or whether you need to adjust your wording).

2) Get Your Website Terms Right (Without Overpromising Or Overreaching)

Your website terms should support your operations, not create new problems.

For example, your terms shouldn’t:

• try to exclude CGA rights for consumers;
• suggest customers have fewer rights than they actually do; or
• contradict your refund policy, shipping policy, or checkout messaging.

Well-drafted eCommerce Terms And Conditions can help you set clear rules around things like orders, payment, dispatch, cancellations, pre-orders, liability allocation (where appropriate), and how disputes are handled - while still staying compliant.

3) Make Your Refunds/Returns Process Operationally Easy

Even if your legal position is strong, disputes often escalate when the process feels messy or slow.

Consider:

• having a simple returns request pathway (form or email template);
• training whoever handles support on the difference between “fault” and “change of mind”;
• keeping records of orders, batch numbers, and supplier invoices; and
• documenting how you assess whether an issue is minor or serious.

If you’re scaling, your internal process matters as much as your policy wording.

4) Don’t Forget Privacy (Because eCommerce Runs On Customer Data)

While the CGA vs FTA focus is consumer protection and marketing conduct, most online stores are also collecting personal information (names, addresses, emails, purchase history).

That means you’ll likely need a clear Privacy Policy that matches what you actually do with customer data (including marketing, analytics, and any third-party tools).

It’s not just a legal box-tick - privacy complaints can quickly become reputation issues, especially for online brands.

5) Be Careful With “Quick Fix” Disclaimers

A disclaimer can be useful for clarifying things like:

• colour variation between photos and real life;
• delivery time estimates (as estimates, not guarantees); or
• product suitability assumptions (for example, compatibility requirements).

But disclaimers aren’t a magic shield. If the overall impression of your site is misleading, or if a product is faulty, a disclaimer usually won’t cancel your obligations.

If you use disclaimers, keep them consistent with the rest of your site and avoid hiding important information in fine print.

Key Takeaways

• The “consumer guarantees act vs fair trading act” question comes down to this: CGA = product/service guarantees and remedies, while FTA = how you advertise and sell (no misleading conduct).
• In eCommerce, a single complaint can involve both laws - for example, a misleading product page (FTA) and a product that doesn’t match description or isn’t durable (CGA).
• You generally can’t contract out of CGA rights for consumer customers, so avoid “no refunds” wording that suggests customers have no legal rights when goods are faulty.
• The FTA often creates the biggest daily risk for online stores because it applies to pricing claims, sales promotions, delivery promises, stock availability, and product descriptions.
• Clear eCommerce Terms And Conditions, accurate product pages, and a realistic Shipping Policy help prevent disputes by setting the right expectations from the start.
• Having a consistent returns workflow and legally-aligned messaging (including Returns, Refunds And Exchanges wording) can reduce escalations and protect your brand reputation.
• If you’re unsure how the CGA or FTA applies to a specific scenario (especially where you sell both B2C and B2B), getting tailored advice early usually saves time and stress later.

If you’d like help getting your online store legally set up - including your terms, refund wording, and consumer law compliance - you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.