Change of Mind: Do You Have a Legal Right to a Refund?
In New Zealand, understanding consumer rights when a purchase is no longer desired, but is otherwise fault-free, is crucial. This article outlines the legal position under the Consumer Guarantees Act 1993 and the Fair Trading Act 1986 regarding 'change of mind' returns.
No General Right to Refund for Change of Mind
New Zealand law does not provide a general legal right for a consumer to return goods or cancel services simply because they have changed their mind, found the item cheaper elsewhere, or no longer want it, provided the goods or services met all legal requirements at the time of purchase.
The Consumer Guarantees Act 1993 (CGA)
The Consumer Guarantees Act 1993 (CGA) provides consumers with certain guarantees when they buy goods or services from a business operating in trade. These guarantees are statutory rights, meaning they are automatically included in transactions and cannot be contracted out of by a business. However, the CGA does not cover situations where a consumer simply changes their mind.
Under the CGA, consumers have rights to a remedy (which may include a repair, replacement, or refund) if goods or services fail to meet specific guarantees, such as:
- Acceptable Quality: Goods must be of acceptable quality, meaning they are fit for all the purposes for which goods of the type are commonly supplied, acceptable in appearance and finish, free from minor defects, safe, and durable [Source: Consumer Guarantees Act 1993, s 6].
- Fitness for a Particular Purpose: Goods must be fit for any particular purpose that the consumer made known to the supplier or manufacturer before purchasing [Source: Consumer Guarantees Act 1993, s 7].
- Match Description: Goods must match any description given by the supplier [Source: Consumer Guarantees Act 1993, s 8] or any sample or demonstration model shown to the consumer [Source: Consumer Guarantees Act 1993, s 9].
- Reasonable Care and Skill (Services): Services must be carried out with reasonable care and skill [Source: Consumer Guarantees Act 1993, s 28].
If a product or service fails to meet one of these guarantees, the consumer may be entitled to a remedy. The type of remedy (e.g., repair, replacement, or refund) depends on whether the failure is minor or substantial [Source: Consumer Guarantees Act 1993, s 18, s 23, s 24]. However, these remedies are specifically for faulty or non-compliant goods or services, not for a change of mind.
The Fair Trading Act 1986 (FTA)
The Fair Trading Act 1986 (FTA) prohibits businesses from engaging in misleading or deceptive conduct. Its primary purpose is to protect consumers from unfair trading practices [Source: Fair Trading Act 1986, s 9].
The FTA does not create a right for consumers to return goods for a change of mind. However, it can be relevant if a business has made false or misleading representations to a consumer that might have influenced their purchasing decision or their understanding of return rights. For example, if a business falsely claims that an item has certain features, or misrepresents a consumer's right to return an item, they may be breaching the FTA [Source: Fair Trading Act 1986, s 13]. If a consumer purchased an item based on a misleading representation, they might have grounds for a remedy, but this is distinct from simply changing their mind about an accurately represented, fault-free item.
Retailer's Own Policies
Many retailers in New Zealand offer their own 'change of mind' return policies. These policies are offered voluntarily by the business and go beyond the minimum requirements of the CGA and FTA. They are a contractual offer from the retailer and not a statutory right. These policies often come with specific conditions, such as:
- A limited timeframe for returns (e.g., 7, 14, or 30 days).
- The item must be in its original packaging and resalable condition.
- Proof of purchase (receipt) is required.
- The return might be for a store credit or exchange only, rather than a full refund.
Consumers should always check a retailer's specific return policy before making a purchase if they believe there is a chance they might want to return the item for a change of mind.
When to Seek Independent Legal Advice
If a person believes their consumer rights have been breached under the Consumer Guarantees Act 1993 or the Fair Trading Act 1986, or if they have a dispute with a retailer regarding a return policy, it is recommended to seek independent legal advice. Information can be obtained from official bodies like the Commerce Commission or through Community Law Centres which provide free legal assistance.