Know your rights
You have the right to clear and accurate prices for products and services under the Fair Trading Act (FTA).
Most retailers that use computerised check-out and barcoding systems are members of GS1 New Zealand. Their code of practice (external link) states that prices should be displayed so that they can be read and linked with the product easily, and the retailer can’t charge more that the displayed price.
A trader or retailer who is not a member of GS1 New Zealand, doesn't have to advertise or display their prices. But any business who doesn't will be caught by the guarantee of a reasonable price under the Consumer Guarantees Act if none is set.
Products advertised or sold at the wrong price
Usually if a price is advertised or displayed incorrectly at a substantially lower price, a trader doesn’t have to sell you products at that price. The Contractual Mistakes Act may apply to fix any mistakes as to price made by you or both you and the seller if there is substantial inequality of value. But if they often advertise products at the wrong price or for a long time, they may be breaking the FTA by misleading you about the true price of products.
If you have been undercharged, after the sale is completed a trader can’t ask you to pay the extra amount, unless you knew that there was a genuine mistake about the price and it was much less than it should have been.
Advertised prices must be genuine and the total price including all extra costs must be easy to see.
No price agreed
If you have ordered a custom-made item or work to be done by a business, but you didn’t agree on a price before the work started, then the final price should be reasonable under the Consumer Guarantees Act (CGA). This means you pay the same price as other traders or tradespeople are charging for similar products and services. Generally, you should get a quote in advance of getting any work done such as repairs, renovations and other services.
Read Getting quotes and estimates to find out more.
Price promotions and illegal price fixing
Retailers often discount products and services and advertise the savings you can make by buying at the discounted price compared to the non-sale price. This may be misleading and breach the FTA if the claimed usual price:
- has never been charged
- is inflated
- is out of date.
If the discounted price is used a lot, it becomes the usual selling price. It would then be misleading for a business to continue to claim it was discounting this price.
Businesses may also mislead you about prices if they:
- promote a special price to get you to buy quickly when it is actually the usual price
- state that an advertised price is the total price that you will have to pay when it is not.
Some ways of setting prices are illegal, like price-fixing or resale price maintenance, as they increase the prices you pay. Resale price maintenance is when a supplier sets a minimum price that a retailer can sell their products for.
Read the Commerce Commission’s factsheet on Pricing (external link) to find out more.
Drip-feeding prices: The practice of adding extra fees to the advertised price of products and services, in the fine print or at the end of an online sales process is called drip-feeding prices. It is used in travel promotions, car sales, rental cars and telecommunication services. It is not illegal unless the advertising is deliberately misleading.
Rounding prices: If you pay with cash, the retailer should round the total price for all your items up or down to the nearest 10 cents, eg if the price is $2.54 then you should pay $2.50; if the price is $2.57 then you should pay $2.60. If retailers round the price of each item, this may breach the FTA as they are not selling the products at the marked or advertised price. If you pay by EFTPOS, credit card or cheque, you should be charged the actual price. If you know a shop is selling an item for a lower price you can ask the trader to lower their price. It is up to the trader whether they wish to match this price or not.
Receipts and itemised accounts: Most traders will provide a receipt if asked, but they are not required to by law. If you don’t get a quote for services, you can ask for an itemised account before paying for the work done. 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.
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.
Credit or debit card payments: You may pay an extra surcharge to cover the bank fees for credit or debit card transactions. This surcharge must be based on the reasonable costs of card acceptance. This fee is only chargeable by the trader if they verbally tell you about the surcharge or have a notice about it publicly displayed on their premises.
Radio Frequency Identification (RFID): is the latest technology that uses electromagnetic fields to automatically identify and track tags attached to objects. RFID using Electronic Product Codes (EPC) to identify products may take over from the GS1 barcode. RFID is currently used on trade items. There are benefits, but there are also legitimate privacy concerns from the inappropriate use of RFID. There is a Code of Practice (external link) (PDF) for the use of EPCs by members of GS1 New Zealand.