Selling Online in New Zealand

Selling online can be one of the fastest ways to grow a small business in New Zealand. You can reach customers nationwide (and sometimes overseas), test products quickly, and keep overheads lower than a traditional bricks-and-mortar setup.

But once you’re selling online, you’re also operating in a space where the rules around advertising, refunds, privacy, and website terms matter a lot. The tricky part is that many of these legal issues don’t show up until something goes wrong: a customer dispute, a data breach, a chargeback, a supplier delay, or a negative review spiral.

The good news is that if you get your legal foundations right from day one, selling online becomes much less stressful (and much easier to scale).

What Does “Selling Online” Mean From A Legal Perspective?

When people talk about selling online, they usually mean any business that takes orders through the internet, such as:

an online store selling physical products (shipped or click-and-collect)
a service business taking bookings and payments online
a subscription business
a digital product business (courses, downloads, memberships)
a marketplace-style platform that connects buyers and sellers

Legally, the key point is this: once you’re taking payment or accepting orders online, you’re forming a contract with your customer (even if you never “sign” anything). Your marketing claims and product descriptions can also create legal obligations.

That’s why your website wording, checkout flow, refund policy, delivery terms, and privacy practices aren’t just “nice to have” - they’re part of how you manage risk and protect your business.

What Laws Do You Need To Follow When Selling Online In NZ?

If you’re selling online in New Zealand, there are a few core laws that commonly apply across most industries. You don’t need to memorise them, but you do need to build your processes (and your website legal documents) around them.

Fair Trading Act 1986 (Advertising And Misleading Claims)

The Fair Trading Act 1986 is a big one for online businesses because your entire storefront is made up of “representations” - product pages, social media posts, pricing displays, testimonials, and shipping promises.

Practically, this means you need to be careful about:

claims about what your product can do (especially health, performance, or “before and after” claims)
pricing statements (including “was/now” pricing and discounts)
images that could mislead customers about size, colour, or what’s included
“limited time” offers that aren’t really limited
country-of-origin claims (e.g. “Made in NZ”)

If your advertising is misleading (even unintentionally), you can end up dealing with disputes, complaints, or enforcement action.

Consumer Guarantees Act 1993 (Refunds, Faults, And Remedies)

If you sell to consumers (not businesses), the Consumer Guarantees Act 1993 will often apply automatically. You generally can’t contract out of it for consumer sales.

In plain terms, your goods and services must meet certain guarantees, such as being of acceptable quality and matching their description.

This affects how you handle:

faulty items and returns
repair/replacement/refund decisions
disputes about product performance versus what you advertised

A common misconception with selling online is: “I’ll just put ‘no refunds’ on my website.” In many cases, that won’t be enforceable against consumers, and it can create bigger problems if it conflicts with your legal obligations.

If you sell to other businesses, it may be possible to contract out of the Consumer Guarantees Act in some circumstances - but only if it’s done properly (for example, the contracting-out clause needs to be in writing and it must be fair and reasonable for the parties). Getting this wording right is important if you want it to be enforceable.

Privacy Act 2020 (Customer Data, Email Lists, Tracking)

If you’re selling online, you’re almost certainly collecting personal information - names, emails, phone numbers, delivery addresses, and payment-related data (even if payments are processed by a third party).

The Privacy Act 2020 means you need to be transparent about what you collect and why, and you need to protect that information with reasonable security safeguards.

Most online businesses will need a properly drafted Privacy Policy that matches how the business actually operates.

If you’re running email marketing campaigns, it’s also smart to make sure your opt-in processes and communications are compliant and consistent with what you tell customers you’ll do.

Unsolicited Electronic Messages Act 2007 (Email And SMS Marketing)

If you market by email, SMS, or other electronic messages, the Unsolicited Electronic Messages Act 2007 (often referred to as NZ’s anti-spam law) is also relevant. In practice, you’ll generally want to make sure you:

only send marketing messages to people who have consented (or where another lawful basis applies)
clearly identify your business as the sender
include a functional unsubscribe option and honour opt-outs

This is especially important for list-building, lead magnets, abandoned cart emails, and ongoing promotional campaigns.

Contract Law (Your Website Terms And Customer Agreements)

Every time a customer clicks “Buy” (or “Book Now”), a contract is formed. If you haven’t set the rules clearly, you can end up stuck with:

disputes about delivery timeframes
chargebacks where you can’t prove the agreed terms
confusion about cancellation rights or subscription renewal
customers claiming they didn’t agree to something

This is why having strong Website Terms And Conditions matters - they’re a key part of protecting your business when selling online.

How Should You Set Up Your Business Before You Start Selling Online?

If you’re already selling online, you can still fix the legal foundations now. But ideally, you want to set things up properly before you start scaling your marketing and sales.

Choose The Right Structure (Sole Trader vs Company)

How you structure the business can affect tax, liability, decision-making, and how easy it is to bring on investors or business partners later. (This article is general information only and isn’t tax advice - it’s a good idea to speak to an accountant about what structure is best for your situation.)

For example:

Sole trader: simpler to start, but you’re generally personally responsible for the business’s debts and liabilities.
Company: more admin, but can help separate personal assets from business liabilities (although directors can still have personal responsibilities in some cases).

If you’re operating through a company, having a Company Constitution can be a practical way to set clear rules about governance and decision-making (especially if you have more than one shareholder).

Protect The Brand You’re Building

When you’re selling online, your brand is often one of your most valuable assets - because customers can’t touch the product before buying. Your name, logo, packaging look-and-feel, and domain name all play a role in trust.

One of the most common (and expensive) mistakes we see is businesses investing in marketing first, then finding out later that the name is too close to someone else’s trade mark. Getting a trade mark strategy sorted early can save a lot of headaches.

Know What You’re Actually Selling (And Any Extra Rules That Apply)

Some products and industries have extra compliance obligations, such as:

food and beverage labelling requirements
regulated health claims
age-restricted products
importing compliance (customs, product safety standards)

If you’re not sure whether your product category has additional legal obligations, it’s worth checking before you scale advertising - because online marketing can put you in front of regulators as quickly as it puts you in front of customers.

What Key Contracts And Website Policies Do You Need For Selling Online?

This is where online businesses can really strengthen their legal position. The right documents don’t just help “tick a box” - they help prevent disputes, set expectations, and give you a clear playbook when something goes wrong.

Website Terms And Conditions (Your Customer Contract)

Your website terms (sometimes called online store terms or terms of sale) are where you set the rules of the purchase. A properly drafted set of Website Terms And Conditions can cover things like:

how orders are placed and when an order is accepted
pricing errors (and what happens if something is accidentally listed at the wrong price)
delivery timeframes and what counts as a delay outside your control
returns process (aligned with consumer law)
limitations of liability (to the extent permitted by law)
intellectual property ownership (your photos, copy, brand assets)
acceptable use rules (especially if customers can post reviews or content)

For many businesses, the terms also need to match the checkout flow. If your terms say one thing but your checkout emails say another, that mismatch can create disputes later.

Privacy Policy (And Your Customer Data Practices)

If you’re collecting personal information, you should have a clear Privacy Policy that explains (in plain language):

what information you collect and why
how you store and protect it
who you share it with (e.g. delivery providers, IT service providers, payment processors)
whether information is stored or processed offshore
how customers can request access or correction

Privacy compliance is also a “trust” issue. Customers are more cautious than ever about scams and misuse of data. A well-written privacy policy can help reduce friction at checkout and improve customer confidence.

Shipping, Returns, And Refunds Policy (Consistency Matters)

Many online stores publish separate policies for shipping and returns. These can work well - but they must be consistent with your website terms and consistent with your legal obligations (especially under the Consumer Guarantees Act 1993 and Fair Trading Act 1986).

A practical approach is to make sure your published policy clearly answers the questions customers always ask:

How long will delivery take?
How much does shipping cost?
Do you ship to PO Boxes or rural addresses?
What happens if the parcel is lost or damaged?
What if a customer changes their mind?
What if the product is faulty?

Getting this right reduces support time, negative reviews, and chargeback risk.

Supplier, Manufacturing, And Wholesale Agreements

If you’re selling online, your reputation is tied to your supply chain. A supplier delay or quality issue quickly becomes your customer complaint.

Depending on your model, you might need agreements covering:

product specifications and quality standards
lead times and delivery responsibilities
who is responsible for defective stock
intellectual property (who owns designs, branding, packaging layouts)
exclusivity or territory arrangements (if any)

If you’re selling someone else’s products, or distributing goods, a proper distribution agreement can also help clarify your rights and responsibilities long-term.

Contracting Your Team (Designers, Developers, Contractors)

Online businesses often rely on contractors: web developers, photographers, marketing specialists, copywriters, and virtual assistants.

It’s important to document:

the scope of work and deliverables
payment terms and what happens if things run late
confidentiality
who owns the intellectual property created (this is a big one)

If you’re engaging contractors, a tailored Contractors Agreement can help avoid disputes about ownership of work product, reuse of materials, and whether the contractor can work for competitors.

If you’re hiring employees (even part-time), you’ll also want a proper Employment Contract to set expectations around duties, pay, confidentiality, and termination processes.

Common Risks When Selling Online (And How To Avoid Them)

When you’re busy running a business, it’s easy to treat legal documents as “later”. But online businesses tend to face the same issues again and again - and the businesses with clear processes and contracts are the ones that can respond quickly and confidently.

Risk 1: Customer Disputes And Chargebacks

Chargebacks and payment disputes can happen even if you’ve done everything right. The difference is whether you can prove what the customer agreed to.

To reduce risk:

make sure your checkout flow clearly links to your terms
send order confirmations that repeat key details (what was purchased, delivery method, address)
keep evidence of delivery where possible
ensure your refund/returns process is consistent and fair

Risk 2: Misleading Advertising Without Realising It

Online marketing moves fast. A single line in an ad can create legal risk if it implies a guarantee you can’t support, or if it misleads customers about price or availability.

To stay on the safe side:

avoid absolute claims unless you can back them up
be careful with “best”, “guaranteed”, and “cures” style wording
make sure your photos accurately represent the product
ensure “sale” pricing is genuine

Risk 3: Data Breaches And Privacy Complaints

If you collect personal information, you need to take reasonable steps to keep it safe. Even small businesses can be targets for phishing attacks or credential stuffing.

Practical steps include:

using strong passwords and multi-factor authentication
restricting staff access to customer data
choosing reputable service providers
training your team on phishing awareness

Just as importantly, your privacy documentation should reflect what you actually do. If you say you never share data, but you use third-party delivery and email tools, that inconsistency can cause problems if a customer complains.

Risk 4: You Don’t Own The IP You Paid For

This surprises a lot of first-time founders. Paying a contractor doesn’t automatically mean you own the intellectual property in what they create (for example, a logo design, website code, product photography, or packaging artwork).

Clear written agreements are how you avoid disputes later, especially if you scale, sell the business, or bring on investors.

Key Takeaways

Selling online creates legal obligations through your advertising, product descriptions, and the contract formed at checkout - even without a “signed” document.
Most online businesses in NZ need to comply with the Fair Trading Act 1986 (misleading conduct and advertising) and the Consumer Guarantees Act 1993 (consumer remedies for faulty goods/services). If you’re selling B2B, it may be possible to contract out of the CGA in some situations, but it needs to be done correctly.
If you collect customer information (which most online businesses do), the Privacy Act 2020 applies and a clear Privacy Policy helps you stay compliant and build trust.
If you use email or SMS marketing, the Unsolicited Electronic Messages Act 2007 is also relevant - particularly around consent and unsubscribe requirements.
Strong Website Terms And Conditions help you set the rules around orders, delivery, returns, liability, and dispute management - which is crucial for reducing chargebacks and complaints.
Don’t forget the contracts behind the scenes: supplier agreements and contractor agreements are often what protects your business when something goes wrong operationally.
Legal foundations are easiest to set up early - but if you’re already selling online, it’s still worth tightening up your documents now before you scale further.

If you’d like help getting your online business legally set up (or reviewing what you already have in place), you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.

Selling Online In New Zealand: Legal Requirements And Key Contracts