CGA. Is it fair?

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#1112220 20-Aug-2014 16:42

JWR:
Talkiet:
Geektastic: [snip]
What amazes me more is that, unlike say the USA, very few NZ retailers ever use customer service/warranty to differentiate themselves from their competitors. It's rare to see a retailer offer MORE than the CGA requires them to offer. They will shout loudly about low prices (quite literally sometimes - Big Save, I am looking at you!) but rarely try to compete on service by saying in effect 'no we are not the cheapest - but we offer X,Y and Z benefits that our competitors do not'.

Because New Zealanders don't care about service, they want the lowest price. I am generalising, but on average, this is pretty damn close to spot on.

Oh, except that we expect top line service and support in addition to the lowest prices.

I know there are individuals that this doesn't apply to, but individuals do not a business case make.

Cheers - N

I think its is more complicated that that.

Historically, we have paid very high prices here. There still a few things that are much higher priced in NZ.

And we're a tiny market at the bottom of the world, with high overheads for shipping, taxes, support and having a presence here. Plus with things like the CGA, the cost of doing business here is high...

But you offer the typical New Zealander the choice of quality or price and they'll sometimes say "quality" but almost always actually choose "price"

Cheers - N

Please note all comments are from my own brain and don't necessarily represent the position or opinions of my employer, previous employers, colleagues, friends or pets.

Geektastic

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#1112221 20-Aug-2014 16:44

Talkiet:
Geektastic: [snip]
What amazes me more is that, unlike say the USA, very few NZ retailers ever use customer service/warranty to differentiate themselves from their competitors. It's rare to see a retailer offer MORE than the CGA requires them to offer. They will shout loudly about low prices (quite literally sometimes - Big Save, I am looking at you!) but rarely try to compete on service by saying in effect 'no we are not the cheapest - but we offer X,Y and Z benefits that our competitors do not'.

Because New Zealanders don't care about service, they want the lowest price. I am generalising, but on average, this is pretty damn close to spot on.

Oh, except that we expect top line service and support in addition to the lowest prices.

I know there are individuals that this doesn't apply to, but individuals do not a business case make.

Cheers - N

Americans somehow mostly manage to get both...!!

Personally, assuming I can't get both, I would rather pay more for better service and warranty. The old adage that you get what you pay for applies.

With regard to buying from overseas, I have had instances where US manufacturers warranty was cheerfully honoured even though I am not resident in the US. I had issues with a Spyderco knife - Spyderco just asked me to mail it back to them and replaced it by return no questions asked. So lack of CGA for overseas purchases is not always a problem.

mattwnz

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#1112231 20-Aug-2014 16:52

Talkiet:
Geektastic: [snip]
What amazes me more is that, unlike say the USA, very few NZ retailers ever use customer service/warranty to differentiate themselves from their competitors. It's rare to see a retailer offer MORE than the CGA requires them to offer. They will shout loudly about low prices (quite literally sometimes - Big Save, I am looking at you!) but rarely try to compete on service by saying in effect 'no we are not the cheapest - but we offer X,Y and Z benefits that our competitors do not'.

Because New Zealanders don't care about service, they want the lowest price. I am generalising, but on average, this is pretty damn close to spot on.

Cheers - N

To a degree yes. However with the CGA, the retailer builds that into the price, hence one reason we pay more in NZ. But due to the strong NZ dollar, and the fact that overseas purchased goods don't have CGA protection, kiwis already have that choice to pay less and buy overseas, and it has been like that for 20 odd years since we have had the internet and online stores. The thing that has changed over the last 5-8 years is the NZ dollar has gained a lot of buying power, which is causing problems for NZ local retailers.
But if we saw the CGA removed, are prices going to decrease? I think not in many cases, rather the retailer will just get a larger margin. So if people then want better warranty coverage, they will have to buy some form of insurance, like an extended warranty etc, and it becomes userpays, which will disadvantge low wage households. So I think the CGA is a great universal scheme, to protect kiwis from poor quality imports being sold in NZ.

Also in other countries which don't have the CGA, in many cases if you buy by credit card, you will often get free extended warranties anyway. Don't thik they do that so much in NZ, as the CGA probably provides better coverage than many extended warranties.

JWR

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#1112252 20-Aug-2014 17:18

Talkiet:
JWR:
Talkiet:
Geektastic: [snip]
What amazes me more is that, unlike say the USA, very few NZ retailers ever use customer service/warranty to differentiate themselves from their competitors. It's rare to see a retailer offer MORE than the CGA requires them to offer. They will shout loudly about low prices (quite literally sometimes - Big Save, I am looking at you!) but rarely try to compete on service by saying in effect 'no we are not the cheapest - but we offer X,Y and Z benefits that our competitors do not'.

Because New Zealanders don't care about service, they want the lowest price. I am generalising, but on average, this is pretty damn close to spot on.

Oh, except that we expect top line service and support in addition to the lowest prices.

I know there are individuals that this doesn't apply to, but individuals do not a business case make.

Cheers - N

I think its is more complicated that that.

Historically, we have paid very high prices here. There still a few things that are much higher priced in NZ.

And we're a tiny market at the bottom of the world, with high overheads for shipping, taxes, support and having a presence here. Plus with things like the CGA, the cost of doing business here is high...

But you offer the typical New Zealander the choice of quality or price and they'll sometimes say "quality" but almost always actually choose "price"

Cheers - N

I agree that all those things are factors.

But, I have also seen New Zealand produced goods selling cheaper overseas.

Further, some companies simply charge higher prices in New Zealand.

That happens in Australia too. They had a government hearing on why companies like Apple and Microsoft charged so much in Australia.

mattwnz

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#1112253 20-Aug-2014 17:24

JWR:

I agree that all those things are factors.

But, I have also seen New Zealand produced goods selling cheaper overseas.

Further, some companies simply charge higher prices in New Zealand.

That happens in Australia too. They had a government hearing on why companies like Apple and Microsoft charged so much in Australia.

I think they will argue that they are able to sell far larger volumes overseas, and that reduces the price in larger overseas markets. Milk and cheese are two that come to mind. A

Also when they sell those same products in NZ, they are adding on a small margin for CGA. There are costs associated with cga claims for both the retailer and the manufacturer.

Tzoi

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#1112393 20-Aug-2014 20:48

Geektastic:
dclegg:
shk292: The CGA is one of the few reasons to buy from a local retailer rather than amazon.com etc
So, loss or reduction of CGA would be very damaging to local retailers - be careful what you wish for

Indeed. Its a risk I took recently, and one where the cards did not fall in my favour (see my thread here).

And that incident hints at exactly why we need the CGA for locally purchased goods. Its just one instance in a growing trend I've noticed of goods being constructed with lessening levels of quality. Its the third incident in a year I've had with quality issues in what I'd expect to be reasonably constructed products, considering their price points. In addition to this issue on a turntable which I've only been using since the end of last year, I also have:-

A PS4 purchased in February which has a recurring 'auto disc eject' issue. Once the console is in this state, it no longer accepts discs. I'm waiting for it to recur again (it seems to happen every month or so) so I can take video footage as proof to get it repaired or replaced under warranty. Its a reasonably widely reported issue online, and can be resolved by powering down the console (which also makes it very difficult to demonstrate the issue).

A iPhone 5s purchased in March which has a Home button that feels to be of dubious quality. While it always works, it will occasionally click twice when I press it down. My wife purchased a 5s at the same time, and hers doesn't suffer from this. Her Home button also feels a lot more robust when you do click it. Its not something I feel I can do much about, as the button does still function. It just makes the button mechanism occasionally feel cheap and nasty when using it, and has me wondering if it will eventually fail. Although on this one my judgement may be clouded by the fact that it was replacing an iPhone 4 that suffered the widely reported failing Home button. So I'm a little bit paranoid about this one eventually failing too.

Manufacturers who offer international warranties are always at the top of my list when choosing products and all else being equal will get the business.

I don't give a hoot about retailers: customers are always paramount because they hold all the power. If a retailer decides it can't cope and folds, they will be replaced pretty fast in most markets. Retailers must respond to customer requirements overall or they will not trade - the customer will go elsewhere.

What amazes me more is that, unlike say the USA, very few NZ retailers ever use customer service/warranty to differentiate themselves from their competitors. It's rare to see a retailer offer MORE than the CGA requires them to offer. They will shout loudly about low prices (quite literally sometimes - Big Save, I am looking at you!) but rarely try to compete on service by saying in effect 'no we are not the cheapest - but we offer X,Y and Z benefits that our competitors do not'.

I wonder if this sort of practice is going to become more paramount now with the changes to the CGA regarding warranties, meaning that retailers have to compare what their extended warranty provides with what consumers get automatically under the CGA. They can't just offer an 'extended warranty' that for most purposes covers the same as what is under the CGA.

BTR

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#1112568 21-Aug-2014 08:09

KiwiNZ: If there is a premium I paid it as well. I paid for you as well.

Not really, what about the people who actually paid for the AppleCare extended warranty. They paid to extend their warranty and you didn't.....

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MikeB4

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#1112570 21-Aug-2014 08:14

BTR:
KiwiNZ: If there is a premium I paid it as well. I paid for you as well.

Not really, what about the people who actually paid for the AppleCare extended warranty. They paid to extend their warranty and you didn't.....

That was referring to the higher purchase price we have here, not the optional extended warranty.

BTR

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#1112572 21-Aug-2014 08:17

Jase2985: heres a good example of why the we need the CGA

there are 2 different house holds
the first is a married couple
the second is a married couple with 4 kids under 5

they both buy the same washing machine from the same shop. the first couple do 2 loads of washing a week, the second couple is doing a load a day and 2 ion a saturday. the second couple is using their machine 4x as much as the first couple yet the manufactures warranty only covers both couples for 2 years. the likely hood of the first couples machine failing in the warranty period is very very low. where as the second couple have a higher probability as they do 4x the amount of washing.

same deal with the laptop thing, some people use it every day others use it on the odd occasion. the more you use something the higher the chance it will fail.

notice its use that generally causes things to fail, not time :) hence why the CGA is good as it states the item should last a reasonable amount of time with reasonable use.

I like your example but shouldn't the family have bought a larger washing machine?

Example, Married couple buy 5KG machine and family buys 9KG machine.

Going by what you mentioned the families washing machine won't last as long if they are using it 4 x more than the couple BUT they are still getting an reasonable amount of use out of it albeit in a shorter length of time. The families washing machine isn't going to fail within a year and if it does its covered by the manufacturers warranty.

BTR

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#1112582 21-Aug-2014 08:20

KiwiNZ:
BTR:
KiwiNZ: If there is a premium I paid it as well. I paid for you as well.

Not really, what about the people who actually paid for the AppleCare extended warranty. They paid to extend their warranty and you didn't.....

That was referring to the higher purchase price we have here, not the optional extended warranty.

Our higher purchase price relates to the exchange rate and admin costs of Apple having a presence in NZ. It also has the cover the price of Apple shipping stock to their distribution centre in Australia.

Geektastic

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#1112660 21-Aug-2014 09:58

Talkiet:
JWR:
Talkiet:
Geektastic: [snip]
What amazes me more is that, unlike say the USA, very few NZ retailers ever use customer service/warranty to differentiate themselves from their competitors. It's rare to see a retailer offer MORE than the CGA requires them to offer. They will shout loudly about low prices (quite literally sometimes - Big Save, I am looking at you!) but rarely try to compete on service by saying in effect 'no we are not the cheapest - but we offer X,Y and Z benefits that our competitors do not'.

Because New Zealanders don't care about service, they want the lowest price. I am generalising, but on average, this is pretty damn close to spot on.

Oh, except that we expect top line service and support in addition to the lowest prices.

I know there are individuals that this doesn't apply to, but individuals do not a business case make.

Cheers - N

I think its is more complicated that that.

Historically, we have paid very high prices here. There still a few things that are much higher priced in NZ.

And we're a tiny market at the bottom of the world, with high overheads for shipping, taxes, support and having a presence here. Plus with things like the CGA, the cost of doing business here is high...

But you offer the typical New Zealander the choice of quality or price and they'll sometimes say "quality" but almost always actually choose "price"

Cheers - N

Shipping is a bit of a red herring.

Take trainers as an example. I have no idea how many pairs fit in a 40ft container, but it's a lot. The shipping costs for a container from say Vietnam (where many trainers are made now) is $2-$3,000. If you can get 1000 pairs in the container, shipping adds only ads at most $3 to the price per pair. Shoes also have to be shipped from the same factories to places like Europe, which are much further from Vietnam than we are. Ditto product from Taiwan, China, Japan, Singapore etc etc.

I bought some New Balance trainers in Jakarta (from a kosher store selling genuine product, not a dodgy market stall!) which I had coincidentally considered buying from Shoe Clinic a month before leaving NZ.

NZ price was $220 a pair. Jakarta price? NZ$65 equivalent.

There is more to the high prices we are charged than shipping or our location, that is for sure.

Personally I think a lot of the issue lies in the 'distributor' model we have here. Distributors are no longer required: retailers can get on the internet and order stock direct. Distributors just clip the ticket without adding any value whatsoever. They may have been appropriate in the past, but modern ICT systems render them obsolete IMV.

Xeon

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#1112663 21-Aug-2014 10:03

Personally I think the CGA is too far in the favor of the consumer, although in my experience it is a pain to actually get anything done with CGA. I often see friends devices and other goods fail at the 12-18 month mark where the warranty is 12 months so they presume they'll have to pay and chuck it. Personally I've had the best experience with RMAs dealing with international companies; I had to return my EVGA graphics card to Taiwan and EVGA paid for 2 day international shipping there and back compared to when my monitor failed it took a month to get back to me and it only went to Auckland.

jfanning

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#1112665 21-Aug-2014 10:04

BTR: Our higher purchase price relates to the exchange rate and admin costs of Apple having a presence in NZ. It also has the cover the price of Apple shipping stock to their distribution centre in Australia.

Why should the price be higher here because of Apple shipping to Aussie from China, when they have to ship to America from China?

trig42

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#1112673 21-Aug-2014 10:20

BTR:
Jase2985: heres a good example of why the we need the CGA

there are 2 different house holds
the first is a married couple
the second is a married couple with 4 kids under 5

they both buy the same washing machine from the same shop. the first couple do 2 loads of washing a week, the second couple is doing a load a day and 2 ion a saturday. the second couple is using their machine 4x as much as the first couple yet the manufactures warranty only covers both couples for 2 years. the likely hood of the first couples machine failing in the warranty period is very very low. where as the second couple have a higher probability as they do 4x the amount of washing.

same deal with the laptop thing, some people use it every day others use it on the odd occasion. the more you use something the higher the chance it will fail.

notice its use that generally causes things to fail, not time :) hence why the CGA is good as it states the item should last a reasonable amount of time with reasonable use.

I like your example but shouldn't the family have bought a larger washing machine?

Example, Married couple buy 5KG machine and family buys 9KG machine.

Going by what you mentioned the families washing machine won't last as long if they are using it 4 x more than the couple BUT they are still getting an reasonable amount of use out of it albeit in a shorter length of time. The families washing machine isn't going to fail within a year and if it does its covered by the manufacturers warranty.

Maybe the family with kids cannot afford the 9kg washer?

I think it is perfectly reasonable to expect a family washing machine to last 2+ years (in fact, I'd say 3-5 years).

F&P can query their machine to see how many loads have been done. When I was selling whiteware and did a course at East Tamaki they told us they had refused a warranty repair on a Smart Drive because when they did the diagnostics they found it had done the equivalent of 12 washes a day for the year and a half the customer had it. Turns out the customer had been running a laundry service from home. I'm sure all these modern machines must have some similar way for the manufacturer/service tech to tell how it has been used. That would be a lot fairer way of determining reasonable wear and tear.

MikeB4

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#1112730 21-Aug-2014 11:40

I picked up my iMac this morning and it's fixed thanks to the CGA.

I have always believed that the CGA is one of the best pieces of legislation passed in the Beehive. I can recall a few years back one of our washing machines packed up a few weeks out of warranty and there was nothing we could do. The retailer didn't want to know and only offered us a new one at retail price, the manufacturer said "not our problem"

So I guess all those who think the CGA is wrong I gather you want to return to those days where consumers were just told to sod off when things went wrong.

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