Providing a remedy to meet guarantee standards

The consumer guarantees (9 for goods and 3 for services) apply to almost everything you sell in your business.

The consumer has the right to seek a remedy if you sell something that doesn’t meet a consumer guarantee. If you sold the product or service, you must help the consumer resolve the problem. If you can’t do it all yourself, you must contact the manufacturer on the consumer’s behalf.

Failure can happen at any time in the reasonable life of a good or service. A reasonable life is how long you can realistically expect it to last. This will depend on the product or service. For example, the reasonable life of a new car would be longer than that pair of shoes.

The types of remedy you need to offer will depend on if the problem is a major or minor failure. We have a simple checklist to work out whether a failure is major or minor.

Major failures

A major failure is when goods or services fall significantly short of a consumer guarantee. The consumer has the right to choose which of the remedy options to take in the event of a major failure.

Goods

A good or product has a major failure if:

• the consumer would never have bought it if they knew about the problem
• it’s dangerous to use
• it’s very different from a description, sample or demonstration model
• it’s broken and can’t be repaired easily, which means they can’t fulfil their usual purpose
• the purpose that the consumer bought it to do (as long as they told you first).

If there is a major failure with goods, the consumer can choose to:

• get a refund
• swap them for an identical replacement (if you can reasonably get one)
• swap them for a replacement of similar value
• keep the goods and be compensated for any drop in value.

Services

A service has a major failure if:

• the consumer would not have bought the service if they had known the nature or extent of the problem
• it led to a dangerous situation
• it didn’t fulfil its purpose or the purpose the consumer wanted it for (as long as they told you first).

If there is a major failure with a service, the consumer can:

• cancel the contract and claim a refund
• keep the contract and be compensated for any drop in value.

Minor failures

A minor failure is anything not listed above. You still have to fix the problem, but you have the right to choose how to do so.

For a minor failure with goods, you may either:

• provide a refund
• replace the goods
• repair the goods
• fix the title to the goods (if this is the problem).

For a minor failure with a service, you must fix the problem for free and in a reasonable time.