Preorder Terms NZ: Checklist For Product Launches

Can you take payment for preorders before your stock has arrived? Yes, you usually can, but your customer terms need to be clear about what the customer is buying, when they can expect it, and what happens if things change.

Preorders can be a smart way to fund a product run, test demand and build excitement around a launch. The tricky part is that customers are paying before you can deliver, so confusion about dates, refunds or stock shortages can turn into unhappy emails very quickly.

The good news is that preorder terms don't have to be complicated. They just need to match how your launch actually works and sit neatly with your obligations under New Zealand consumer law.

Can You Take Payment For Preorders In New Zealand?

Yes, you can generally take payment for preorders in New Zealand, as long as you don't mislead customers and you can meet your consumer law obligations.

A preorder is still a sale. The customer pays now, and you promise to supply the product later. That means your checkout page, product page, ads, emails and terms of sale all need to tell the same story.

For most ecommerce brands, this means being clear about:

• What the customer is ordering: the product, size, colour, model, inclusions and any known limitations.
• When you expect to ship: an estimated dispatch window, not a vague promise that sounds certain if it isn't.
• When payment is taken: for example, full payment at checkout or a deposit now and balance later.
• What can change: production timing, packaging, minor design details or stock availability, if that's genuinely possible.
• What happens if you can't supply: whether the customer gets a refund, store credit option or alternative product choice.

The Fair Trading Act 1986 is a key law here. It stops businesses from misleading or deceiving customers, including through half-truths or claims you can't back up. If you say stock will ship in March, you should have a reasonable basis for that date.

The Consumer Guarantees Act 1993 also matters. If you sell to consumers, you can't contract out of basic guarantees such as products being of acceptable quality, matching their description and being delivered within the agreed time, or within a reasonable time if no time is agreed.

If you sell to business customers, you may be able to contract out of the Consumer Guarantees Act in a written agreement where the goods or services are supplied and acquired in trade, all parties are in trade, all parties agree to contract out, and it's fair and reasonable. That needs careful wording and won't apply to ordinary consumer sales.

Check Whether Layby Rules Apply

Some preorder payment structures can also be treated as layby sale agreements under Part 4A of the Fair Trading Act 1986. This can happen where the customer doesn't take possession until payment is complete and pays in 3 or more instalments, or in 2 or more instalments if the agreement says it's a layby.

If the layby rules apply, you'll need to think about extra requirements before using deposit or instalment preorders. These include written and plain-language disclosure, customer cancellation rights, disclosure of any cancellation charge, and rules about supplier risk before the customer takes possession.

What Should Your Preorder Terms Say About Delivery Dates?

Your preorder terms and conditions should say whether delivery dates are estimates or firm commitments, and what you'll do if a delay occurs.

This is one of the biggest pressure points in a launch. Your manufacturer may be waiting on materials, shipping may take longer than expected, or customs clearance may slow things down. Customers can be patient when they know what's happening. They tend to get frustrated when a brand goes quiet or keeps shifting dates without explanation.

Use Delivery Windows Carefully

If you're not completely sure of the date, avoid wording like guaranteed delivery by 10 June. A safer approach is often to use an estimated window, such as we expect to dispatch preorders between 10 June and 24 June.

Your terms should then explain:

• that dates are estimates unless you say they're confirmed;
• what factors could affect timing, such as manufacturing, supplier delays or freight delays;
• how you'll update customers if the date changes;
• whether the customer can cancel if the delay is significant; and
• whether delivery costs are included or charged separately.

Be careful not to use an estimate as a shield for unrealistic marketing. If your supplier has told you the goods won't leave the factory for eight weeks, advertising ships next month is risky even if your terms say dates may change.

A Worked Example

Say Maia runs an online activewear label in Auckland. She opens preorders on 1 April for a new jacket at $149 each. Her product page says estimated dispatch from 20 May, and her terms say customers will be emailed if dispatch is pushed back by more than 10 business days.

On 12 May, the factory tells Maia the zips are delayed and dispatch will likely move to 14 June. Maia emails all preorder customers with the new estimated date, explains the reason, and gives customers the option to keep the order or request a refund by 22 May.

That approach is much cleaner than staying silent until customers start asking. It also helps Maia show she had a process for dealing with delays fairly.

What Refund Rights Apply To Preorders?

Refund rights for preorders depend on why the customer wants a refund and what you promised at the time of purchase.

New Zealand law doesn't give customers a general right to change their mind for every purchase. So, if a customer preorders the wrong colour and simply doesn't want it anymore, you can decide whether your policy allows a change of mind refund, exchange or store credit.

That said, your refund policy can't take away rights customers have under the Consumer Guarantees Act. If you can't supply the product as promised, the product doesn't match the description, or the delay is more than the customer should reasonably have to accept, a refund may be required.

When You Should Be Ready To Refund

You should build your preorder process around refund scenarios like these:

• You can't supply the product: for example, the manufacturer cancels the line or you receive fewer units than ordered.
• The delay becomes substantial: especially where timing was a key reason customers bought, such as a seasonal item or event-related product.
• The product has materially changed: for example, the fabric, features or dimensions are materially different from what was advertised.
• The product is faulty: the usual Consumer Guarantees Act remedies apply once the customer receives it.
• Your marketing was inaccurate: if the customer was induced to buy by a misleading claim, a refund may be the practical way to fix it.

Your terms should explain how customers request a refund, what information they need to provide, and how refunds will be processed. If you offer store credit, make it optional in situations where the customer is legally entitled to money back.

Avoid saying all preorder payments are non-refundable without any carve-outs. That kind of blanket wording can mislead customers about their legal rights and may create risk under the Fair Trading Act.

Can You Change Or Cancel A Customer's Preorder?

Yes, you can usually reserve a right to change or cancel a preorder, but the clause needs to be fair, specific and consistent with consumer law.

Preorders can involve genuine uncertainty. You may not know the final stock count until your shipment arrives. You may also discover that a supplier has changed a component or that one colourway hasn't passed quality control.

Your terms can help by setting out what happens if something changes. For example, you might reserve the right to:

• cancel and refund orders if stock is unavailable;
• offer an alternative colour, size or model where the original item can't be supplied;
• make minor product changes that don't materially affect the item;
• limit quantities per customer; or
• cancel orders affected by obvious pricing or website errors.

The key is that the customer shouldn't be stuck with something materially different from what they agreed to buy. If the change is significant, give the customer a real choice: accept the change or receive a refund.

Watch The Unfair Contract Terms Rules

The Fair Trading Act also has unfair contract terms rules for standard form consumer contracts and standard form small trade contracts. These rules can apply to online terms that customers don't negotiate.

A term is more likely to be risky if it gives your business a broad right to change the product, delivery date or price without giving the customer a fair remedy. For example, a clause that says we can change anything at any time and you won't be entitled to a refund is likely to cause problems.

A more balanced clause would explain the specific types of changes that may happen, require you to notify the customer, and give refund rights where the change is material.

What Marketing Claims Can You Make During A Product Launch?

You can make strong marketing claims about your preorder launch, but only if they're accurate and you can back them up.

Launch marketing often moves quickly. You may be posting on Instagram, sending emails, updating product pages and working with influencers. All of those claims can matter under the Fair Trading Act, not just the fine print in your terms.

Be especially careful with claims about:

• Scarcity: if you say only 100 available, that should be true and tracked.
• Delivery timing: don't imply a product will arrive for a specific event unless you can support that.
• Product performance: claims like waterproof, organic, medical-grade, compostable or ethically made need evidence.
• Discounts: if you advertise a preorder price as a discount, the comparison price needs to be genuine.
• Reviews or endorsements: don't use testimonials that create a misleading impression about a product customers haven't received yet.

If you're collecting customer information for waitlists, launch alerts or preorder fulfilment, the Privacy Act 2020 may also apply. You should tell customers what information you're collecting, why you need it, who you may share it with, and how they can contact you about privacy matters.

Where you use influencers or affiliates, make sure the commercial relationship is clear. A paid post or gifted product arrangement can mislead customers if it looks like a purely independent recommendation.

A simple rule helps: your headline claim, product page and terms should all line up. If your ad says arrives in time for winter but your terms say dispatch may be any time in the next six months, that's a mismatch worth fixing.

Preorder Terms Template: What To Include

Your preorder terms should be tailored to your product, supply chain, payment process and refund policy. A template can be a useful starting point, but it often misses the details that matter most during a real launch.

Here is a practical outline you can use when preparing your preorder terms. A lawyer should tailor it before you use it with customers.

1. Preorder Description: describe the product, variants, inclusions and any features still being finalised.
2. Payment Terms: state whether customers pay in full, pay a deposit, or authorise a later balance payment. If payments are made in instalments and the customer doesn't take possession until payment is complete, check whether the layby sale rules apply.
3. Estimated Dispatch And Delivery: set out the expected timeframe and whether dates are estimates or confirmed commitments.
4. Delays: explain how you'll notify customers, what choices they have, and when refunds are available.
5. Product Changes: describe the types of minor changes you may make and what happens if a change is material.
6. Stock Shortages: explain how you'll allocate limited stock, offer alternatives, cancel orders or refund customers.
7. Customer Cancellations: say whether customers can cancel for change of mind and any cut-off points that apply.
8. Refunds And Remedies: include your policy while preserving rights under the Consumer Guarantees Act and Fair Trading Act.
9. Shipping Costs And Risk: explain delivery charges, address accuracy, split shipments and missed deliveries.
10. Promotions And Launch Offers: set out how preorder discounts, bundles, gift-with-purchase offers or limited runs work.
11. Privacy: explain how you'll use customer information for order updates, fulfilment and marketing where consent is needed.
12. Business Customer Terms: if you sell B2B, include any trade-only terms, credit terms, invoicing terms and any Consumer Guarantees Act contracting-out wording if appropriate.

Your preorder terms should also fit with your website terms of use, privacy policy, refund policy and email flows. If those documents contradict each other, customers will usually rely on the wording that helps them most.

If something goes wrong mid-launch, deal with it in this order: confirm the facts with your supplier, pause any misleading ads, update the product page, email affected customers, record what you've offered, and get tailored advice if refunds or cancellations could affect many orders.

Key Takeaways

• You can usually take payment for preorders in New Zealand, but your terms and marketing need to be clear and accurate.
• Delivery dates should say whether they're estimates or firm commitments, and customers should be updated quickly if dates move.
• Some deposit or instalment preorder structures may be layby sales, so check the Fair Trading Act layby rules before using them.
• A blanket no refunds policy is risky because it can't remove rights under the Consumer Guarantees Act or Fair Trading Act.
• If stock is short or the product changes materially, give customers a fair choice between accepting the change and receiving a refund.
• Your ads, product page, checkout wording, emails and terms should all tell the same story.

If you'd like help with preorder terms, refund wording, layby sale checks or ecommerce customer agreements, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.