No Refund Policies In New Zealand: What Businesses Can And Can’t Do

“No refund policy” signs can feel like a simple way to protect your cashflow and avoid difficult customer conversations.

But in New Zealand, refund rules aren’t something you can opt out of just by putting a statement on your website, receipt, or shop counter.

If you’re running a small business (whether you sell products, services, or digital goods), getting your refund approach right from day one matters. A well-written refund policy can reduce disputes, set customer expectations, and protect your team. A poorly worded one can create customer complaints, reputational damage, and (in some cases) legal risk.

Below, we’ll break down what “no refunds” wording can legally do in NZ, what it can’t do, and how to put a compliant policy in place that still supports your business.

What Does A “No Refund Policy” Mean In New Zealand?

When business owners talk about a no refund policy, they usually mean one of these things:

• No refunds for change of mind (e.g. “I don’t like it anymore” or “I found it cheaper elsewhere”).
• No cash refunds, but exchanges or store credit might be offered.
• No refunds on sale items (or other limited categories like hygiene products).
• No refunds if the customer has used the product (for hygiene, safety, or practicality reasons).
• No refunds for cancellations (common for appointments and bookings).

Some of these approaches can be lawful in the right circumstances. The key is that your policy must sit underneath (and not contradict) New Zealand’s consumer protection laws.

Two laws matter the most here:

• Consumer Guarantees Act 1993 (CGA) – gives consumers automatic rights when they buy goods or services for personal, domestic, or household use (and can also apply in some business purchases depending on what the goods/services are “ordinarily acquired” for).
• Fair Trading Act 1986 (FTA) – prohibits misleading or deceptive conduct (including misleading refund statements).

As a practical rule: your refund policy can set expectations for “change of mind” situations, but it generally can’t remove rights customers get under the CGA (unless you’re genuinely selling business-to-business and you’ve validly contracted out in writing in a way that’s fair and reasonable).

When A No Refund Policy Won’t Work (Consumer Guarantees Act Basics)

If you sell to consumers, the CGA guarantees apply automatically in most everyday sales. That means “no refunds” wording can’t be used to avoid fixing real problems with what you sold.

Here are the most common situations where a no refund policy won’t hold up.

1) Faulty Goods (Or Goods That Don’t Match The Description)

Goods must generally be of acceptable quality, fit for purpose, and match their description (including what you said online or in-store).

If a product is faulty, unsafe, doesn’t do what it’s meant to do, or doesn’t match what you advertised, the CGA may require you to provide a remedy.

Depending on the issue, that remedy may be:

• a repair; and/or
• a replacement; and/or
• a refund (particularly where the failure is “substantial”, or where you can’t fix it within a reasonable time).

This is where many businesses get caught out: a sign that says “No refunds” does not override these rights.

If you want to tighten up what you say in marketing and product listings (so you don’t accidentally promise something you can’t deliver), it’s worth checking your advertising practices align with the advertised price rules and broader Fair Trading Act obligations.

2) Services That Aren’t Carried Out With Reasonable Care And Skill

The CGA also applies to many services provided to consumers (including trade services, beauty services, repairs, professional services, and many digital services).

If your service isn’t carried out with reasonable care and skill, isn’t fit for its particular purpose, or isn’t completed within a reasonable time (where no timeframe was agreed), your customer may have CGA rights.

In practice, this can mean you need to:

• fix the work; or
• arrange for it to be fixed; or
• in some cases, provide a refund (for example, for services not carried out, or where the failure is substantial) and/or compensation.

“No refunds” wording won’t protect you if the real issue is poor performance or a failure to deliver the service properly.

3) Your Refund Statement Is Misleading (Fair Trading Act Risk)

Even if you’re trying to say “no refunds for change of mind”, you can still get into trouble if the wording implies customers never have refund rights.

Examples that are often risky include statements like:

• “No refunds under any circumstances.”
• “All sales are final. No returns.”
• “Sale items cannot be returned, even if faulty.”

If the statement would lead an ordinary customer to think they have fewer rights than they actually do, it may be misleading under the FTA.

4) You Try To Replace Refund Rights With “Store Credit Only”

Offering store credit can be a great customer service tool for change-of-mind returns.

But you generally can’t insist on store credit where the law requires a refund (for example, where there’s a substantial failure under the CGA, or where a repair/replacement isn’t available or can’t be provided within a reasonable time). Your policy should make it clear that store credit is an option for certain returns, not a blanket replacement for legal rights.

When You Can Say “No” To Refunds (And Still Be Customer-Friendly)

Now for the good news: in many common scenarios, refusing refunds (or refusing change-of-mind refunds) is allowed.

The trick is being clear about what you’re refusing and why, and making sure you’re not contradicting the CGA.

1) Change-Of-Mind Returns (Often Optional)

In many everyday retail situations, if a customer simply changes their mind, you’re not automatically required to provide a refund.

Common examples include:

• They picked the wrong size and it wasn’t your mistake.
• They no longer like the colour/style.
• They found a better price elsewhere.
• They bought it impulsively and regret it.

In these cases, you can choose your approach, such as:

• no refunds at all;
• exchange only (within a timeframe);
• store credit only; or
• refunds only if the product is unopened and returned within X days.

Whatever you choose, make it consistent and written down.

If you want your terms to do the heavy lifting here, it helps to build your refund approach into your broader Terms & Conditions (especially if you sell online or take bookings).

2) Hygiene, Safety, And Perishable Items (With Clear Categories)

Many businesses want a no refund policy for items that can’t realistically be resold once opened, such as:

• earrings and piercings;
• cosmetics and skincare;
• swimwear/underwear (depending on how it’s handled);
• food and perishable items.

This can be reasonable for change-of-mind returns. But the wording matters. If the item is faulty, unsafe, or not as described, CGA rights may still apply.

A safer phrasing is usually along the lines of: “No change-of-mind returns on [category] for hygiene reasons. This does not limit your rights under the Consumer Guarantees Act.”

3) Custom-Made Or Personalised Products

Custom products (like engraved items, made-to-measure goods, or bespoke orders) are a classic scenario where you may want to refuse change-of-mind refunds, because the item can’t be resold.

You can usually set firm rules such as:

• no change-of-mind cancellations once production has started;
• no refunds for errors caused by the customer’s supplied details (e.g. misspelt name);
• approval steps before final production.

Again, you still need to stand behind your workmanship and what you promised (CGA can still apply if the product is faulty or not as agreed).

4) “Final Sale” Or Clearance Items (But Not If Faulty)

You can often refuse change-of-mind refunds for clearance or final sale items, if that’s clearly communicated upfront.

But you can’t use “sale item” as a way to avoid responsibility for defects or misleading descriptions. If the item is faulty, customers may still have remedies under the CGA.

5) Booking Cancellations (Services And Appointments)

For service-based businesses, “refunds” often show up as cancellation disputes. For example: late cancellations for appointments, no-shows, event bookings, or deposits.

You can often charge cancellation fees if they are reasonable and clearly disclosed before the customer books (and if they reflect genuine costs or lost time, not a penalty). Also keep in mind that some consumer transactions (like certain unsolicited/direct sales) can come with specific cancellation rights under NZ law, which your cancellation policy can’t override.

If you provide services, it’s worth getting your cancellation approach sorted early (including deposits, rescheduling, and late cancellation fees). This is closely connected to cancellation fees rules and how you disclose them at the point of sale.

How To Write And Display A No Refund Policy That Complies

A legally safer refund policy is usually less about being “strict” and more about being clear.

Here’s a practical structure many NZ small businesses use to set expectations without overreaching.

1) Separate “Change Of Mind” From “Faulty Or Not As Described”

This is the biggest drafting tip. Many disputes happen because customers don’t know which category they fall into, or your staff aren’t sure what the policy is trying to say.

Consider headings like:

• Change Of Mind Returns
• Faulty Items / Consumer Guarantees
• Exchanges And Store Credit
• Sale Items
• Online Orders And Shipping

If you want a helpful baseline for how NZ businesses typically approach this, the concepts in Returns, Refunds and Exchanges are a good guide to what customers expect versus what the law requires.

2) Be Precise About Timeframes And Condition Requirements

If you do allow returns (even just exchanges), set practical conditions like:

• Returns must be requested within X days.
• Item must be unused, with tags/packaging intact.
• Proof of purchase is required (receipt, order confirmation, etc.).
• Return shipping is paid by the customer unless the item is faulty.

This helps your team apply the policy consistently and reduces ad-hoc decisions that can lead to complaints.

3) Avoid Blanket Statements Like “No Refunds Under Any Circumstances”

If your goal is “no refunds for change of mind,” say exactly that.

In other words, it’s often better to use:

• “We don’t offer refunds for change of mind.”

…rather than:

• “No refunds.”

The shorter version might feel simpler, but it can create confusion and can look like you’re trying to contract out of consumer rights.

4) Make Sure The Policy Is Visible Before Purchase

Where businesses get into trouble is when the “no refund policy” only appears after the sale (like on a receipt inside the bag), or it’s buried on a hard-to-find page.

Best practice is to show your refund settings:

• at the checkout counter;
• on your website footer (linked from product pages);
• during online checkout (checkbox or clear link);
• in booking confirmations for services.

If you sell online, make sure your refund position matches your broader website terms, including fulfilment and delivery rules. Many businesses pair refund wording with a clear Shipping Policy so customers understand delivery timeframes, failed deliveries, and return shipping responsibilities.

5) Align Your Refund Policy With Your Wider Sales Documents

Your refund policy shouldn’t live in isolation. It should match what you say in:

• quotes and invoices;
• your website terms;
• booking terms;
• promotional campaigns and “sale” advertising.

If your documents contradict each other (for example, your Instagram says “refunds available” but your website says “no refunds”), you’ll create disputes and potentially increase your Fair Trading Act risk.

For online stores and service providers, having clear eCommerce Terms & Conditions can help keep these rules in one place so customers (and your team) know where they stand.

6) Don’t Overpromise With “Lifetime Warranty” Or “Guaranteed Results” Claims

Refund disputes often start with marketing language.

Be careful with:

• “guaranteed results” claims (especially for services);
• “works with all devices” (for tech accessories);
• “waterproof” claims;
• before-and-after claims.

If you’re offering warranties, you’ll want them to be consistent with NZ rules around warranties and CGA guarantees. It’s also worth understanding how Warranties work in practice, because customers often confuse “warranty” with “refund entitlement”.

Common No Refund Policy Mistakes We See Small Businesses Make

When you’re busy running the day-to-day of your business, it’s easy to copy and paste refund wording from somewhere else and hope for the best.

Here are common mistakes that can lead to disputes or legal headaches.

Using A “No Refund Policy” To Pressure Customers Out Of Their CGA Rights

If your staff are trained to repeat “we have a no refund policy” as a blanket response, you’ll likely run into trouble when the issue is actually a defect or a failure to deliver what was promised.

A better approach is to train staff to ask one quick question first: “Is there something wrong with the item, or is this a change-of-mind return?”

Calling Something “Final Sale” Without Explaining What That Means

If “final sale” really means “no change-of-mind returns,” say that. If it means “no exchanges either,” spell that out too.

The clearer you are, the fewer arguments you’ll have at the counter.

Not Having A Process For Assessing Faulty Claims

You don’t have to accept every customer complaint at face value.

But you do need a consistent process, such as:

• ask for proof of purchase;
• inspect the goods (or request photos/videos for online sales);
• assess whether the issue is wear and tear, misuse, or a genuine fault;
• document the outcome and remedy offered.

Refund Policy Terms That Could Be Unfair Or One-Sided

If you use standard terms with consumers (especially online), overly one-sided clauses can create compliance risk. This is particularly relevant if your terms try to give you broad discretion (for example, “we can refuse any refund at any time for any reason”).

It’s worth being aware of how Unfair Contract Terms can apply to standard form consumer contracts.

Key Takeaways

• In New Zealand, “no refunds” wording can usually apply to change-of-mind returns, but it generally can’t remove consumer rights under the Consumer Guarantees Act 1993 (and it may only be possible to contract out in genuine business-to-business deals, in writing, where it’s fair and reasonable).
• If goods are faulty, unsafe, or not as described, customers may be entitled to a remedy (and in some cases, a refund), regardless of any “no refunds” sign.
• Your refund wording must not be misleading. Overly broad statements like “no refunds under any circumstances” can create risk under the Fair Trading Act 1986.
• For services and appointments, you can often charge reasonable cancellation fees if they’re disclosed upfront and aren’t punitive (but your policy can’t override any specific statutory cancellation rights that apply to particular types of sales).
• A strong refund policy separates change-of-mind returns from faulty claims, sets clear timeframes and conditions, and is visible before purchase (especially online).
• Refund rules should align with your wider terms (website terms, quotes/invoices, shipping, and promotions) so your business stays consistent and your team can apply the policy confidently.

If you’d like help putting a compliant no refund policy in place (or reviewing your customer terms so they protect your business without breaching NZ consumer law), you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.