Refund Signs and Policies
Although some retailers choose to do so, there is no law
requiring you to provide customers with a refund if they change
their mind about a purchase. However, you may have to provide
remedies if the goods are faulty.
When you don’t have to give a refund
You are not, for example, required by law to give a refund in the
following situations:
- the customer finds goods cheaper elsewhere
- gifts that the receiver doesn’t like –
"do you have a gift exchange card
that you could make available?"
- clothes/shoes do not fit – "can
a customer try an item on before buying? If not you should
consider an exchange policy."
- clothes or other products don’t match –
"customers should bring in the item
to be matched, or you could choose to have a “cash appro” policy."
When you may have to give a refund
The Consumer Guarantees Act gives a consumer the right to seek a
refund if the goods substantially fail one or more of the guarantees
set out in the Act. You may choose to give a refund if the fault is
minor.
Goods must meet guarantees of acceptable quality, fitness for a
particular purpose, matching description given.
For more information about your obligations under the Act see the
Consumer Guarantees Act – Goods.
Refund Signs
“No Refunds”, “As is, where is”,
“No returns on sale goods”, “All care no responsibility”, “For a
refund goods must be returned in their original package within 30
days”.
These types of ‘blanket’ no refund signs are illegal as they do
not make it clear that customers may have rights under the Consumer
Guarantees Act.
Misleading people about their rights under the
Consumer Guarantees Act breaches the
Fair Trading Act. Breaching this Act may
result in fines up to $60,000 per offence for an individual and
$200,000 per offence for a company.
Ministry approved 'Refund Policy' sign
“We do not have to provide a
refund if you have changed your mind about a particular purchase, so
please choose carefully. If the goods are faulty, we will meet our
obligations under the Consumer Guarantees Act to provide a remedy.”
This is the text of a legally accurate
refund sign (pdf format (110KB) (instructions
for obtaining the viewer) produced by the Ministry of Consumer
Affairs, available free to retailers. If you wish to order copies of
the refund sign, please fill in an
online order form in
the Publications section.
Setting your refund/return policy
You are free to choose to have a “change of mind” return policy
which goes beyond the legal requirements.
eg, if “non-faulty” goods are returned within a certain period
with proof of purchase provided, a refund, exchange or credit note
will be given.
If you choose to have a policy of this type make sure it is
displayed in a sign of a size and style that can be clearly read and
understood by your customers. We suggest that you post it at each
counter in a place where the customer can see it without being
specifically directed to the sign by store employees.
Examples of change of mind terms
- Exchange or credit note for goods with a
- reasonable expiry date
- Time limit on returns – eg, one month, seven days
- Proof of purchase is required.
If you alter your policy, for example, during sales or special
promotions make sure that your customers are informed about it and
that the new policy does not mislead customers as to their rights if
the goods are faulty.
Cash approval policy
You may choose to offer cash approval to customers who are unsure
about their purchase. This will particularly apply to goods that the
customer wants to match with others – eg, bathroom tiles with the
wall colour, or a jacket with a pair of trousers. If you do offer
“cash appro” make sure the customer is aware of the terms for
returning the goods.
The law does not require you to warn the customer that the goods
must be returned in the same condition as when they left the store.
If the goods are returned damaged or broken then you can seek
compensation for this.
Exchange cards
Where you sell many items for gifts you may wish to consider
offering customers exchange cards. You may place an expiry date on
the return – but make sure it is written clearly on the exchange
card.
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