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Price of goods and services

How pricing works, what if the price tag doesn't match what the till says, rounding prices, unfair pricing.

Price of goods and services: the basics

Price is one of the things you think about when you are deciding what to buy. Traders can choose what price to sell their goods and services at but there are rules about how they display those prices.

Before you buy, look at the price

It sounds simple, but remember that before you buy, check the price. The sticker price on the item may not be the actual price. The price is agreed when you make a deal with the trader. So double check that the price on the till matches what you expect.

Bargaining

Most traders in New Zealand use fixed prices. It is not common to bargain on prices but it is legal.

Traders who run the shops that they own may be more open to negotiating a price. Service providers may also be flexible on prices. It is more common to ask a trader for a discount. You might ask for a discount on expensive items if you can pay cash or are buying a few big items from the same shop.

If you know that another shop is selling an item for a lower price you can ask the trader to lower the price. It is the trader’s decision whether they will lower the price.

Getting a quote or estimate

So you don't get a nasty surprise when it comes time to pay get a quote or an estimate for services. An estimate gives you an idea of how much services will cost. A quote is an offer to do the job for a specific price.

Find out more about getting a quote or an estimate.

Your rights with prices

Traders can choose the price at which they sell their goods and services. You can choose to buy the item at the price they are asking for, or you can choose to try somewhere else.

If you have agreed to pay for something (for example, you are getting something made especially for you), but you didn’t agree on a price before the work was started, then the final price should be reasonable.

Does a trader have to sell goods at the displayed price?

No, a trader doesn’t have to sell goods at the displayed price if the price is wrong. But if a trader displays or advertises goods at the wrong price, they may be breaking the Fair Trading Act by misleading consumers about the true price of goods.

Does a trader have to sell goods at the recommended retail price?

No, a trader doesn’t have to sell an item at the recommended retail price. This is the price that the manufacturer or distributor suggests.

Does the price have to include GST?

No, goods and services tax (GST) doesn’t have to be included in the price of items sold to the public. However if it is not included the price must clearly state that GST is excluded, for example, “$150 + GST”, or “$150 excl GST”. Traders who do not show that GST is excluded may be breaching the Fair Trading Act by misleading you about the true cost of the goods.

Rounding prices

Prices can include values of 1-9 cents, even though the lowest value New Zealand coin is 10 cents .

For example a can of tomatoes might cost $1.23 and your total supermarket bill might come to $41.58.

If you are paying by cash the trader should round up or down to the nearest 10 cents. So if the total price comes to $2.54 you should pay $2.50 cash, and if the total price comes to $31.67 you should pay $31.70 cash.

Can a shop round up if I am not paying by cash?

No, if you pay electronically or by cheque you should be charged the actual (unrounded) price.

Can they round up each item, or only the final total?

If a shop rounds up the price of each item they risk breaching the Fair Trading Act because they are not actually selling you the goods at the marked /advertised price.

Read more at the Commerce Commission website.

Fees for using cheques, eftpos, or credit cards

Traders can charge extra fees for using cheques, eftpos or a credit card if you are told about the fee before you buy the goods. They can tell you verbally or there might be a written sign.

Traders may charge you a fee for getting cash out with your eftpos, debit or credit card, but they need to tell you beforehand.

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.

Find out more information on goods sold by weight or measure.

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.

Got a problem with prices?

Can a trader ask for the money back if they sell the goods at the wrong price?

After the sale is completed a trader can’t ask a consumer to pay the extra amount, unless the consumer knew that there was a mistake about the price and the price was considerably less than it should have been.

For example if you bought a jumper for $30 when it was supposed to be $40, then the trader can’t ask for the extra money. But if you bought a new TV that was supposed to be $500 and the trader only charged your eftpos card $50 then the trader can ask you to pay the extra amount.

EAN barcode pricing code of practice

Most traders that use computerised check out and barcoding systems are members of EAN (NZ) Inc.

EAN barcodes are used worldwide for marking products that are sold by retailers. EAN has a code of practice that states that prices should be displayed so that they can be read and linked with the product easily. The code also says that the trader cannot charge more that the displayed price. You can make a complaint about a EAN member’s prices to:
EAN (NZ) Inc
PO Box 11-110
Wellington 6034.

I don't want to pay that much

You can choose to buy the item at the price they are asking for, or you can choose to try somewhere else. If you have agreed to pay for something (for example, you are getting something made especially for you), but you didn’t agree on a price before the work was started, then the final price should be reasonable.

The price isn't fair

Some ways of setting prices are illegal, like price fixing, or resale price maintenance. Price fixing is when which is when competing traders agree to control, fix or maintain the prices for the goods or services that they supply. Resale price maintenance is when a supplier sets a minimum price that a retailer can sell their goods for.
Other anti-competitive behaviour includes:

  • substantially lessening competition
  • excluding competitors
  • taking advantage of market power.

The Commerce Commission investigates anti-competitive behaviour. If you think a company is involved in any of these behaviours you can report it to the Commerce Commission and they may choose to investigate it.

For more information about anti-competitive behaviour and how to report it:

Visit the Commerce Commission website

 

Last updated 16 January 2013
[Internal link] Consumer law changes - Changes in consumer rights.

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