17 December 2018
It can ruin the pleasure of a good purchase – the pushy salesperson who hones in for the extended warranty sale which can add a significant amount to the purchase price. Truth is, when you take out an extended warranty you are probably paying for protection that you already have under NZ consumer law (the Consumer Guarantees Act) and/or your house and contents insurance.
The Consumer Guarantees Act (CGA) says manufacturers and retailers are obliged to guarantee products they sell are of an acceptable quality and fit for the purpose for which they are intended. It is worth having a detailed discussion when buying items so the salesperson can provide the best advice as to what is suitable for your needs. If a product fails the retailer should offer to have it repaired and if this isn’t possible they should replace the item or give you a refund.
Noel Leeming recently ran foul of the Commerce Commission for misrepresenting consumer rights and last week was fined for breaches of the CGA. This was a good reminder to consumers in the Christmas shopping period of their rights under NZ consumer law. A good indicator of stores that understand their obligations are those that display this sign:
As Minister of Consumer Affairs I some interesting discussions with enthusiastic extended warranty salespeople. Even when I explained that I was well familiar with the law some were adamant I was wrong about the protections it offered!
There are of course some exceptions. Goods bought at auction are often not subject to the same protections and some motor vehicle sales fall into the same category, so additional homework is necessary then.
For most purchases however, quoting the CGA and a firm but polite “No thanks” when the extended warranty is raised works pretty well. New Zealand’s Fair Trading Act and Consumer Guarantees Act are examples of sound, principle based laws that serve consumers well.