The Consumer Guarantees Act: Why Importers Carry the Manufacturer's Liability
Under the CGA, an importer is treated as the manufacturer when the maker has no NZ presence. What that means for your warranty maths and margins.
Here's a sentence that changes how you price every product you import: under the Consumer Guarantees Act, when the actual manufacturer has no presence in New Zealand, the importer is treated as the manufacturer. That factory in Dongguan with no NZ office? In the eyes of NZ consumer law, you stand in its shoes. The manufacturer's guarantees, the remedies, the liability — they sit with you.
Most new importers discover this the day a customer demands a refund on a failed product and quotes the Act back at them. Better to design your business around it from day one.
What the CGA actually guarantees
The Consumer Guarantees Act (CGA) applies automatically whenever you sell goods to NZ consumers. No contract wording is needed, and you cannot contract out of it for ordinary consumer sales. The core guarantees:
- Goods must be of acceptable quality — safe, durable, free from defects, acceptable in appearance, and fit for their normal purpose, judged by what a reasonable consumer would expect given the price and description.
- Goods must be fit for any particular purpose the customer told you about.
- Goods must match their description and any sample shown.
- Spare parts and repair facilities must be reasonably available.
Note what's not there: any fixed time limit. "Acceptable quality" includes durability for a reasonable period — and for many products, a reasonable consumer expects years, not the "12-month warranty" printed on your box. Your stated warranty sits alongside the CGA; it never replaces or caps it.
What customers can demand from you
When goods fail a guarantee, remedies scale with the failure. Minor faults: you can choose to repair, replace or refund. Serious faults — goods unsafe, substantially unfit for purpose, or ones a reasonable consumer wouldn't have bought knowing the fault — hand the choice to the customer, who can reject the goods for a full refund or replacement. Consumers can also claim reasonably foreseeable consequential losses.
And because you're deemed the manufacturer, there's no one behind you to pass the parcel to. A local retailer selling a Samsung product can lean on Samsung NZ. You cannot lean on a Chinese factory that NZ law can't reach — at least, not through the CGA. Which brings us to the real lesson.
Design your import business around the liability
This legal reality should shape four practical decisions:
1. Quality control is your warranty budget. Every defect that leaves the factory becomes your cost at NZ retail prices — refunds, replacements, return freight, and reputation. This reframes the ~US$300 pre-shipment inspection: it isn't a cost, it's the cheapest warranty-claim prevention you'll ever buy. Typical factory return rates run around 8–15%; disciplined supplier selection and inspection is how you get to the low end. Do the maths on a 10% failure rate across 1,000 units at your retail price and the inspection pays for itself many times over.
2. Price in a returns provision. Build a warranty reserve into your unit economics — a few percent of revenue, tuned by product category. Electronics and anything with batteries or moving parts deserve a fatter reserve than silicone kitchenware.
3. Push liability back up the chain contractually. The CGA governs you and your customer; your supplier relationship is governed by your purchase contract. So put quality obligations, defect thresholds and claim mechanisms in your purchase-order terms, hold the balance payment until inspection passes, and pursue supplier claims for defective batches with documentation. NZ law leaves you holding the customer-facing liability — commercial leverage is how you share the pain backwards.
4. Take product safety seriously. If your product injures someone or damages property, you face the exposure a manufacturer faces. This is where product liability insurance enters the conversation for importers building real volume, especially under a private label — we cover it in its own post.
The Fair Trading Act rides alongside
Two quick companions to keep in view. The Fair Trading Act bans misleading claims — including misdescribing customers' CGA rights. Telling a consumer "no refunds" or "you're outside the 12-month warranty" when the CGA applies is itself a breach, and the Commerce Commission does prosecute. And if you sell to businesses, the CGA can be excluded in writing for genuine business-to-business transactions — standard practice in trade terms, useless for consumer sales.
The mindset shift
Selling imported goods in NZ means being the manufacturer for legal purposes without any factory of your own. The importers who thrive treat that seriously: they pick products they can stand behind, vet factories hard, inspect before shipment, and handle the occasional failure generously and fast. Ironically, the CGA is a moat — it's exactly why customers can buy confidently from a small NZ importer, and why fly-by-night sellers who won't honour it don't last.
Key takeaways
- Under the CGA, an importer is treated as the manufacturer whenever the actual maker has no NZ presence — the liability is yours and can't be contracted away for consumer sales.
- Guarantees include durability for a reasonable period; a printed "12-month warranty" doesn't cap your CGA obligations.
- Treat QC as warranty-claim prevention: inspections, supplier selection and a priced-in returns reserve are how you manage the exposure.
- Push quality obligations back on your supplier through purchase-order terms and withheld balance payments — that's your only recourse upstream.
Related: Product Liability Insurance: The Cover NZ Importers Forget, Claims and Compensation: What to Do When a Shipment Arrives Defective
