In New Zealand traders are free to choose the price at which they wish to sell goods or services. This means the price for the same thing can be different from shop to shop. But this doesn't mean that there are no laws about prices. Check out the pricing pointers below.

Bargaining

Although bargaining is not common in New Zealand, it is legal.

It is more common to ask a trader for a discount. We often ask for a discount on expensive goods when we pay cash or buy more than one item at the same time, eg a TV and a video recorder.

If you ask, some traders will lower their price to match the price of another trader selling the same thing. Before you ask, find out the lowest price at which other traders are selling the goods.

This is useful if you want to buy from a certain trader because they offer a free service such as a service checkup eg, a free adjustment of brakes and gears six weeks after you buy a bicycle.

Rounding prices

One and two and five cent coins are no longer in circulation but their value still remains. These changes took place from July 2006. This means that a trader can still offer goods for sale at $1.99.

The price you actually have to pay for these goods depends on how you pay.

If paying in cash

If you are paying cash, the trader can set the rounding policy. This must be disclosed to you prior to making a purchase.

If paying by cheque, credit card, or EFTPOS

The trader can charge the exact price if the consumer is paying by cheque, credit card, or EFT-POS. This is because these methods of payment allow you to pay the exact price.

Fees for payment by cheque or EFTPOS

Cheque fees

Traders can charge you a "cheque fee" provided that you are told verbally or in writing (eg a sign) about the fee before you buy the goods.

EFTPOS

Traders can charge customers paying by EFTPOS a fee provided that you are told verbally or in writing (eg, a clear sign) about the fee before you buy the goods (eg, on the petrol pump by the EFTPOS sign).

Charging service fees for using EFTPOS for withdrawing cash is not common practice, but some traders do.

We recommend that traders place a prominent sign that customers can see before they make the decision to use EFTPOS - eg, at the counter, or on a petrol pump.

'Wholesale price' and 'retail price'

The wholesale price is the price the retailer pays the manufacturer or the distributor for the goods. The retailer usually adds a 'mark-up' or extra cost to cover their expenses and profit. The retail price includes the mark-up and is the price at which the retailer sells the goods to you.

'Recommended Retail Price'

This is a price suggested by the manufacturer or the distributor. The trader doesn't have to sell at the 'recommended retail price' or RRP. In a competitive market goods may never sell at RRP.

'Cash price'

The cash price is the lowest price offered by the trader when you pay cash or cheque for the goods.

A trader can't ask a higher price than the cash price for a hire purchase deal advertised as interest-free or credit-free.

eg, you see a credit-free hire purchase deal of $699 for a stereo. While you are in the shop you see that the stereo costs $649 if you pay cash. The credit-free hire purchase deal should cost no more than $649.

If you think a trader deliberately marks goods at the wrong price to get customers into the shop you can inform the Commerce Commission. If the matter is serious the Commerce Commission may take legal action against the trader.

Goods and Services Tax (GST)

GST does not have to be included in an advertised or displayed price. However, the advertised price or price tag must clearly state that GST is excluded

eg, $150 + GST

or

$150 excl. GST

Traders whose goods or services appear cheaper because they have not shown the GST may have committed an offence under the Fair Trading Act 1986. This is because they have misled you about the true cost of the goods.

Receipts

As a general rule, traders do not have to provide a receipt when selling goods or services. But most traders will provide a receipt if asked.

GST invoices

A trader must supply GST invoices to GST registered customers if asked. The Goods and Services Act says that a GST registered person is entitled to a GST invoice within 28 days of asking for one.

Goods sold by weight or measure

If goods are sold by weight or measure, you must be given information about quantity. The trader can do this by:

quantity label or marking on the goods or
weighing or measuring the goods in front of you, or
providing a receipt or invoice stating the quantity sold.

For more information on goods sold by weight or measure go to our Measurement Section.

Itemised accounts

If you do not receive a quote from a service provider, you can ask for an itemised account before paying for the service or work done.

Service providers do not have to provide itemised accounts but most will if asked.

An itemised account should include:

what materials were used and how much they cost
how many hours the trader worked and what their hourly rate was
any other charges related to the job eg, call out fee, travel charge, and GST.

Pricing Code of Practice

All major supermarket chains and most other traders using computerised check out or barcoding systems are members of GS1 New Zealand. GS1 NZ has a code of practice which states that prices should be displayed so that they can be easily read and easily linked to the product. The code also says that you cannot be charged any more than the price displayed.

If you have a complaint about pricing by an GS1 NZ member contact:

GS1 New Zealand
P O Box 11-110
Wellington
Tel: 0800 102 356

Pricing errors

Displayed price incorrect

Traders do not have to sell goods at the displayed price. If the price is a mistake, a trader can refuse a consumer's offer to buy goods at the price on the tag.

eg Mona sees a sweatshirt in her favourite shop. The price tag says $30. When Mona takes the sweatshirt up to the counter to buy it, the shop realises the price tag is a mistake. The correct price is $75. The shop refuses to sell Mona the sweatshirt for $30. The shop can refuse to accept Mona's offer to buy the sweatshirt for $30.

However, a trader who continues to display prices which are much lower than the actual price at which they are willing to sell may be committing an offence under the Fair Trading Act. This is because they are misleading consumers about the true cost of goods.

Trader charges the wrong price

Once you have bought and paid for goods and services, the contract of sale is completed. This means that if the trader has charged you the wrong price, the trader cannot ask you to pay the balance.

If you learn you have been charged more than the ticket price only when you read your docket, you can ask to be paid the difference between the checkout price and the shelf price.

eg, Jo buys a new shirt. The price tag says $49.95 and this is the price she is charged. When Jo gets home the shop rings to say they have made a mistake - the correct price for the shirt was $69.95. The shop cannot ask Jo to pay the extra $20. They agreed to sell Jo the shirt for $49.95 and the sale has been completed. Jo would not have been aware that the price charged was a mistake.

There is one important exception to this rule. A trader may be able to demand more money from you if they can show that:

you must have been aware that there was a mistake about the price and
there was an "unequal exchange of value" - you paid a small amount for highly priced goods.

This right to have the contract carried out at the correct price is available under the Contractual Mistakes Act 1977 (to view this Act online, visit the government Legislation website).

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