Consumer NZ probe busts retailers for displaying misleading signs on refund policy in stores

Sunday, 10 June 2018

First Retail Group managing director Chris Wilkinson says retailers need to be careful how they worded signs in their stores.

Retailers displaying signs claiming consumers are not entitled to refunds for faulty goods are misleading, Consumer NZ says.

An investigation by the consumer watchdog revealed signs displayed in some retail stores in New Zealand may breach the Consumer Guarantees Act.

Some of the worst signs included, 'no returns on sale items', 'no returns on goods outside of warranty' and 'faulty items must be returned within five days'.

Retail strategist Chris Wilkinson, of First Retail Group, said the more signs a retailer had, the more concerned shoppers should be.

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The signs were often an indication the retailer did not have good policies in place to deal with refunds, Wilkinson said.

Consumer NZ says there is no time limit under the Consumer Guarantees Act, so signs such as 'faulty items must be returned within five days' are misleading.

Small retailers were more likely to have signs, he said.

'The reason for that is, in any case, they just don't have those systems in place to be able to send something back to suppliers, and financially they are not as resourceful as some of the bigger ones.'

Retailers needed to be careful how they worded signs in their stores, he said.

'There are clearly signs out there that fall very far short [of the act].'

One of the signs Consumer NZ found said: 'No cash refunds, please choose carefully'.

Wilkinson said in the past, retailers had 'big problems' with staff theft from cash refunds.

In addition, shoppers were stealing products, then coming back to claim a refund on them, he said.

'So retailers have been working to strengthen their systems around this, but that's should not be withstanding their obligations under the act.'

SIGNS SPOTTED BY CONSUMER NZ

'No cash refunds, please choose carefully'

The act requires products to be of acceptable quality.

If the product has a minor fault, the store chooses whether it wants to repair the item, replace it or give the customer a refund. If there is a major fault, the customers chooses whether they want a repair, replacement or refund.

If the consumer changes their mind, retailers do not have to offer a refund, Consumer NZ says.

'No returns on sale items'

Shoppers are entitled to return the product, if it is 'not of acceptable quality', Consumer NZ says.

'Just because an item's on sale, doesn't mean the retailer can sell you a dud.

'The only exception is if the fault was pointed out to you at the time of sale.'

'Store credit only on returned items'

The act says a refund for a faulty product has to be a refund of the price you paid.

The customer does not have to accept a store credit, gift voucher, or discount off another product in the store, Consumer NZ says.

'No returns on goods outside of warranty'

This is one of the most common complaints it gets, Consumer NZ says.

'If you ever hear this, the retailer is misleading you about your rights.

'Regardless of any manufacturer's warranty that comes with a product, you've got additional rights under the [act]. When goods aren't of acceptable quality, the retailer must provide a remedy.'

'Faulty items must be returned within five days'

There is no time limit in the act and any retailer that tells you otherwise is misleading you about your rights, Consumer NZ says.

'Whether a good is of acceptable quality depends on what a reasonable consumer would think was acceptable based on the nature of the goods, the price paid, where they were bought, and any claims made.'

Consumers can expect a high-end product to meet a higher standard, than a budget buy, it says.

'No liability in any circumstances'

Statements like these are 'flat-out misleading', Consumer NZ says.

'Retailers must provide goods that are fit for purpose and last the distance.

'Our advice is to steer clear of any trader making claims it has no liability for its products or tries to limit its liability in some way.'