Alex is Sprintlaw's co-founder and principal lawyer. Alex previously worked at a top-tier firm as a lawyer specialising in technology and media contracts, and founded a digital agency which he sold in 2015.
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Facebook Marketplace can be a great way to test products, reach local customers quickly, and build early momentum for your small business.
But once you start selling regularly (or you’re selling as a business rather than “having a clear-out”), the legal rules start to matter a lot more. Getting your compliance right from day one can help you avoid customer disputes, refunds drama, and regulatory headaches later.
This guide covers the key legal areas small businesses should think about when selling on Marketplace, with a focus on Facebook Marketplace legal compliance in New Zealand.
Are You Selling As A “Business” Or Just As A Private Seller?
This is the first (and most important) question, because many of your legal obligations depend on whether you’re selling “in trade”.
In simple terms, you’re more likely to be selling in trade if you:
- sell products regularly (even if it’s a side hustle),
- buy or make items specifically to resell,
- sell under a brand name, business name, or social media page,
- advertise your products/services to the public, or
- intend to make a profit.
Why does this matter? Because once you’re “in trade”, you generally need to comply with key New Zealand consumer and advertising laws (and customers are far more likely to have enforceable rights against you).
If you’re still in the early stages and not sure how you should set things up, it can help to choose a business structure early (sole trader, company, partnership, etc.) and get your basics in place, including Company Set Up if you’re incorporating.
Common Marketplace Scenarios
- One-off sale of your used furniture: usually private sale (but still avoid misleading claims).
- Selling handmade candles every week: likely “in trade” (consumer law applies).
- Drop-shipping or importing products to resell: in trade (consumer law and product compliance risks).
- Selling services (cleaning, repairs, beauty services): in trade (service descriptions and consumer guarantees matter).
Even if you’re small, the law doesn’t only apply to “big businesses”. If you’re operating like a business, you should treat compliance seriously.
What Consumer Laws Apply When You Sell On Facebook Marketplace?
If you’re selling as a business on Marketplace, the two big laws you need to be aware of are:
- Fair Trading Act 1986 (FTA) – about misleading conduct, advertising, and representations.
- Consumer Guarantees Act 1993 (CGA) – automatic guarantees for consumers who buy goods or services from a business.
These laws can apply regardless of where you sell - your website, a market stall, or a social platform like Marketplace.
Fair Trading Act: Don’t Mislead Customers
The FTA is essentially about making sure your advertising and communications are accurate and not misleading. This includes what you say in your listing, your messages in chat, and even what you imply through photos.
Practical examples for Marketplace listings:
- Don’t claim an item is “new” if it’s used or refurbished (unless you clearly explain that).
- Don’t exaggerate performance claims (for example, “guaranteed results in 7 days”) unless you can back it up.
- Be careful with “was $199 now $99” style pricing unless the “was” price is genuine.
- If there are defects, disclose them clearly (small businesses often get into disputes simply because customers feel surprised).
A good rule of thumb is: if a customer relies on your description and it’s wrong, you could be exposed.
Consumer Guarantees Act: Customers May Have Automatic Rights
If you’re selling to consumers in NZ, the CGA generally gives them guarantees that goods will be:
- of acceptable quality,
- fit for purpose (including any specific purpose they tell you about),
- match their description, and
- match any sample or demonstration.
For services, guarantees include that services will be carried out with reasonable care and skill, and completed within a reasonable time.
This matters because it affects how you handle returns, repairs, replacements, or refunds. You can’t simply write “no refunds” and think that overrides the CGA.
It’s worth having a clear approach to Returns, Refunds And Exchanges so your team knows what to do when something goes wrong.
Can You Contract Out Of The CGA?
Sometimes - but only in limited situations. In general, contracting out of the CGA is only possible for business-to-business sales (where the buyer is acquiring goods or services for business purposes), and it needs to be done properly in writing.
Importantly, you can’t contract out of the CGA for sales to everyday consumers. If you’re selling to the public on Marketplace, it’s safest to assume CGA protections apply.
What Should Your Marketplace Listings Include (And Avoid)?
On Marketplace, customers are often making fast decisions. That’s great for sales - but it also means misunderstandings happen easily.
To reduce disputes (and meet expectations around Facebook Marketplace legal compliance in New Zealand), aim to make your listing as clear as possible.
Include Clear Product Information
- Accurate item description (materials, size, model, condition).
- Price including GST (if you are GST-registered) or a clear note if not. (For tax-specific guidance, it’s best to speak to an accountant or Inland Revenue.)
- Shipping/delivery costs and timeframes (or pickup details).
- Any limitations (compatibility requirements, care instructions, what’s included/not included).
Avoid Overpromising
Overpromising is one of the fastest ways to create FTA risk. Be especially careful with:
- health or wellbeing claims,
- “guaranteed” outcomes,
- statements about origin (“made in NZ”) if that’s not accurate, and
- claims about warranties if you can’t honour them.
Be Careful With “No Refunds” And Similar Statements
It’s fine to have a change-of-mind policy (for example, “change of mind returns accepted within 7 days if unused”), but you can’t remove CGA rights where they apply.
Instead of “no refunds”, consider wording along the lines of:
- “Change of mind returns are not offered, but your rights under the Consumer Guarantees Act still apply.”
If you sell regularly online (including through social platforms), it can also help to have proper customer-facing terms in place, like Online Service Terms And Conditions or product terms that match what you actually do in practice.
Do You Need Terms, Policies, Or Disclaimers For Marketplace Sales?
Marketplace is built for informal buying and selling, but if you’re using it as a genuine sales channel, having your legal documents sorted can make your business look more professional - and reduce your risk when something goes wrong.
Some practical documents to consider include:
1) Terms And Conditions Of Sale
Terms help set expectations around:
- payment methods,
- delivery and risk (when the customer becomes responsible),
- returns and remedies (aligned with the CGA),
- faulty items and what happens next,
- limits around custom orders, and
- how disputes will be handled.
If you also sell through other channels (website, invoices, or direct messages), your terms should be consistent. Many businesses start with Business Terms and adapt them to their actual sales process.
2) Privacy Compliance (If You Collect Customer Information)
Even if you’re “just selling on Marketplace”, you might still collect personal information such as:
- names, phone numbers, email addresses,
- delivery addresses,
- proof of payment, and
- messages that contain personal details.
Under the Privacy Act 2020, you need to handle personal information responsibly - including keeping it secure, only collecting what you need, and not using it for unrelated purposes.
If you’re collecting customer information beyond the platform (for example, into a spreadsheet, mailing list, or accounting system), you may need a Privacy Policy that matches what you’re actually doing.
3) Disclaimers (Only Where Appropriate)
Disclaimers can be useful in some contexts (for example, where you’re providing general information, or where you need to clarify limits around advice-like content). But they’re not a magic shield - you still can’t mislead customers or contract out of consumer guarantees where the law doesn’t allow it.
If you’re unsure what you can and can’t say, a properly drafted Disclaimer can help (especially if your content includes guidance, instructions, or non-standard products/services).
Other Legal Risks Small Businesses Miss On Marketplace
Most Marketplace compliance issues aren’t about “big” legal problems - they come from day-to-day operational gaps. Here are a few commonly missed areas worth tightening up.
Product Safety And Quality Control
If you’re importing, manufacturing, or re-labelling products, you may be responsible for product safety and ensuring items are fit for sale in New Zealand.
Think about:
- basic safety (especially for children’s products),
- correct instructions and warnings,
- quality control checks (to reduce “faulty item” disputes), and
- record keeping (supplier invoices, batch details, customer order history).
This is also where having a consistent warranty/returns process becomes really important - not only for customer satisfaction, but also for compliance.
Intellectual Property (IP): Brand Names, Logos, And Photos
Marketplace is full of copied listings, reused product photos, and businesses accidentally picking names that clash with someone else.
Protecting your brand early can save you a lot of pain later, especially once you start building reviews and repeat customers.
Consider whether you should protect your name or logo with a Trade Mark. This can be especially valuable if your Marketplace sales are becoming a serious revenue stream.
Also make sure you:
- use your own photos (or have permission to use supplier images),
- don’t copy competitors’ descriptions, and
- don’t sell counterfeit or “lookalike” goods (this can create serious legal risk).
Payment, Delivery, And Record Keeping
A lot of Marketplace disputes are really “logistics disputes”. Customers may claim they didn’t receive goods, goods arrived damaged, or the wrong item was delivered.
From a risk-management perspective, it helps to:
- confirm key terms in writing in the chat (price, what’s included, delivery timeframe),
- use tracked shipping for higher-value items,
- keep proof of postage and delivery, and
- store invoices/receipts (and GST records, if registered). (For tax-specific guidance, it’s best to speak to an accountant or Inland Revenue.)
These steps won’t remove all disputes, but they’ll put you in a much stronger position if something escalates.
If You Hire Help To Run Your Marketplace Sales
Once your Marketplace side hustle starts growing, you might bring someone in to help with packing orders, replying to messages, or managing listings.
That’s a great sign your business is scaling - but it’s also a point where legal foundations matter.
If you’re hiring, make sure you use the right arrangement (employee vs contractor) and have the right paperwork in place. For employees, that usually starts with an Employment Contract tailored to what the person will actually do.
Key Takeaways
- If you’re selling regularly on Marketplace, you’re likely selling “in trade” and should treat your Marketplace activity like a proper business channel.
- For Facebook Marketplace legal compliance in New Zealand, the Fair Trading Act 1986 and Consumer Guarantees Act 1993 are key - your listings and messages must not mislead customers, and consumer guarantees may apply automatically.
- Clear listings reduce disputes: accurate descriptions, transparent pricing, disclosed defects, and realistic delivery timeframes make a big difference.
- “No refunds” statements can create risk if you’re selling to consumers - align your returns process with CGA requirements and be clear about change-of-mind policies.
- If you collect customer information (even just for delivery), you need to handle it safely and may need a Privacy Policy consistent with the Privacy Act 2020.
- As you grow, protect your brand (including trade marks), keep good records, and put proper terms and contracts in place so you’re protected from day one.
If you’d like help getting your Marketplace terms, privacy setup, or business structure right, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.
