CGA. Is it fair?

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#1112851 21-Aug-2014 14:46

What the CGA essentially does is remove the opportunity for people to purchase low quality goods in order to save on the upfront cost.

Whether this is good or bad depends on your philosophy around the 'nanny state'. Some people would believe that retailers and consumers should be free to purchase whatever goods they like under whatever contract of sale is agreeable to both parties. Others would argue that the average consumer is not empowered to fully assess product quality and value and should therefore be protected from making bad judgements.

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#1112880 21-Aug-2014 15:02

alasta: What the CGA essentially does is remove the opportunity for people to purchase low quality goods in order to save on the upfront cost.

Whether this is good or bad depends on your philosophy around the 'nanny state'. Some people would believe that retailers and consumers should be free to purchase whatever goods they like under whatever contract of sale is agreeable to both parties. Others would argue that the average consumer is not empowered to fully assess product quality and value and should therefore be protected from making bad judgements.

It isn't just a 'nanny state' thing, but it also has the benefit of reducing the overall cost for consumers, as it is universal. I mean for many products you may pay $100 as an addon cost for an extended warranty, which could be thousands a year if you had to pay for some form of extended warranty on every product and service you purchased.
It also keeps people who provide services in line. Otherwise if you get a dodgy trademan, you don't really have any avenues for recourse if they perform a bad service for you. So it would make the disputes tribunal pretty redundant, and if you had to take a tradesman to actual court without the disputes tribunal , it would cost thousands.

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#1112882 21-Aug-2014 15:06

mattwnz:
alasta: What the CGA essentially does is remove the opportunity for people to purchase low quality goods in order to save on the upfront cost.

Whether this is good or bad depends on your philosophy around the 'nanny state'. Some people would believe that retailers and consumers should be free to purchase whatever goods they like under whatever contract of sale is agreeable to both parties. Others would argue that the average consumer is not empowered to fully assess product quality and value and should therefore be protected from making bad judgements.

It isn't just a 'nanny state' thing, but it also has the benefit of reducing the overall cost for consumers, as it is universal. I mean for many products you may pay $100 as an addon cost for an extended warranty, which could be thousands a year if you had to pay for some form of extended warranty on every product and service you purchased.
It also keeps people who provide services in line. Otherwise if you get a dodgy trademan, you don't really have any avenues for recourse if they perform a bad service for you. So it would make the disputes tribunal pretty redundant, and if you had to take a tradesman to actual court without the disputes tribunal , it would cost thousands.

One thing about extended warranties is that they are (Usually) more comprehensive and may include additonal benefits, like guaranteed response times, loan equipment, and guaranteed full replacement value replacement item if repair can't be made under a specific timeframe etc.

To some people those additional warranties have some value.

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#1112888 21-Aug-2014 15:13

networkn:
mattwnz:
alasta: What the CGA essentially does is remove the opportunity for people to purchase low quality goods in order to save on the upfront cost.

Whether this is good or bad depends on your philosophy around the 'nanny state'. Some people would believe that retailers and consumers should be free to purchase whatever goods they like under whatever contract of sale is agreeable to both parties. Others would argue that the average consumer is not empowered to fully assess product quality and value and should therefore be protected from making bad judgements.

It isn't just a 'nanny state' thing, but it also has the benefit of reducing the overall cost for consumers, as it is universal. I mean for many products you may pay $100 as an addon cost for an extended warranty, which could be thousands a year if you had to pay for some form of extended warranty on every product and service you purchased.
It also keeps people who provide services in line. Otherwise if you get a dodgy trademan, you don't really have any avenues for recourse if they perform a bad service for you. So it would make the disputes tribunal pretty redundant, and if you had to take a tradesman to actual court without the disputes tribunal , it would cost thousands.

One thing about extended warranties is that they are (Usually) more comprehensive and may include additonal benefits, like guaranteed response times, loan equipment, and guaranteed full replacement value replacement item if repair can't be made under a specific timeframe etc.

To some people those additional warranties have some value.

Yes they do, which is why many people buy them, and also as businesses aren't covered by the CGA, they buy them too. I think after recent CGA updates the have improved the extended warranties, as previously many didn't have any benefit over the CGA, infact one I purchased was worse than CGA coverage as it only provided a refund for the current market value of the goods.
In a way you could say that businesses are also subsidising the general consumer with the CGA, although businesses can claim back 15% GST.

networkn

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#1112906 21-Aug-2014 15:38

mattwnz:
networkn:
mattwnz:
alasta: What the CGA essentially does is remove the opportunity for people to purchase low quality goods in order to save on the upfront cost.

Whether this is good or bad depends on your philosophy around the 'nanny state'. Some people would believe that retailers and consumers should be free to purchase whatever goods they like under whatever contract of sale is agreeable to both parties. Others would argue that the average consumer is not empowered to fully assess product quality and value and should therefore be protected from making bad judgements.

It isn't just a 'nanny state' thing, but it also has the benefit of reducing the overall cost for consumers, as it is universal. I mean for many products you may pay $100 as an addon cost for an extended warranty, which could be thousands a year if you had to pay for some form of extended warranty on every product and service you purchased.
It also keeps people who provide services in line. Otherwise if you get a dodgy trademan, you don't really have any avenues for recourse if they perform a bad service for you. So it would make the disputes tribunal pretty redundant, and if you had to take a tradesman to actual court without the disputes tribunal , it would cost thousands.

One thing about extended warranties is that they are (Usually) more comprehensive and may include additonal benefits, like guaranteed response times, loan equipment, and guaranteed full replacement value replacement item if repair can't be made under a specific timeframe etc.

To some people those additional warranties have some value.

Yes they do, which is why many people buy them, and also as businesses aren't covered by the CGA, they buy them too. I think after recent CGA updates the have improved the extended warranties, as previously many didn't have any benefit over the CGA, infact one I purchased was worse than CGA coverage as it only provided a refund for the current market value of the goods.
In a way you could say that businesses are also subsidising the general consumer with the CGA, although businesses can claim back 15% GST.

And give it to the government ...

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#1112968 21-Aug-2014 16:59

bazzer:
Geektastic: Well you appear to be suggesting our statutory warranty policies should be less good than is relatively common elsewhere.

Really? Where?

Inferred from this statement:

"Not at all, but just don't fool yourself that you got these rights for free. Surely it could be up to the individual to decide if they want to pay for an extended warranty or not?"

bazzer

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#1112981 21-Aug-2014 17:18

Geektastic:
bazzer:
Geektastic: Well you appear to be suggesting our statutory warranty policies should be less good than is relatively common elsewhere.

Really? Where?

Incorrectly inferred from this statement:
"Not at all, but just don't fool yourself that you got these rights for free. Surely it could be up to the individual to decide if they want to pay for an extended warranty or not?"

Corrected for you (see here

). I thought we were discussing the merits of the CGA, and I offered up an alternative for discussion. I didn't say that I supported that alternative, in fact earlier I said "I am generally in favour of the CGA". Make of that what you will but I'll try again.

Whatever one's thoughts on the CGA, I don't think one can argue that there aren't compliance costs associated with it ("don't fool yourself that you got these rights for free"). Whether this cost is shared equally between manufacturer, distributor, retailer and consumer or weighted more heavily towards one of them I do not know, but I suspect the consumer ends up bearing the brunt of it.

Is that "fair" (as the OP wrote)? I don't know, but one alternative would be removing the CGA, removing those compliance costs and letting consumers fend for themselves. Presumably the overall cost to the system would be less since, for example, there wouldn't be the admin costs or any consumers exploiting it. The problem is that the costs would be "lumpier", i.e. concentrated in the consumers (like KiwiNZ) that get stuck with a faulty product rather than spread evenly over the entire consumer base. In this market, some people would pay higher prices (i.e. the "extended warranty" I alluded to) in order to get better quality products/service. Some people would rather buy the cheap stuff and deal with the possibility of failure. Couldn't (n.b. not shouldn't) that be an alternative? If not, why not?

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mattwnz

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#1113050 21-Aug-2014 18:42

bazzer:
Geektastic:
bazzer:
Geektastic: Well you appear to be suggesting our statutory warranty policies should be less good than is relatively common elsewhere.

Really? Where?

Incorrectly inferred from this statement:
"Not at all, but just don't fool yourself that you got these rights for free. Surely it could be up to the individual to decide if they want to pay for an extended warranty or not?"

Corrected for you (see here ). I thought we were discussing the merits of the CGA, and I offered up an alternative for discussion. I didn't say that I supported that alternative, in fact earlier I said "I am generally in favour of the CGA". Make of that what you will but I'll try again.

Whatever one's thoughts on the CGA, I don't think one can argue that there aren't compliance costs associated with it ("don't fool yourself that you got these rights for free"). Whether this cost is shared equally between manufacturer, distributor, retailer and consumer or weighted more heavily towards one of them I do not know, but I suspect the consumer ends up bearing the brunt of it.

Is that "fair" (as the OP wrote)? I don't know, but one alternative would be removing the CGA, removing those compliance costs and letting consumers fend for themselves. Presumably the overall cost to the system would be less since, for example, there wouldn't be the admin costs or any consumers exploiting it. The problem is that the costs would be "lumpier", i.e. concentrated in the consumers (like KiwiNZ) that get stuck with a faulty product rather than spread evenly over the entire consumer base. In this market, some people would pay higher prices (i.e. the "extended warranty" I alluded to) in order to get better quality products/service. Some people would rather buy the cheap stuff and deal with the possibility of failure. Couldn't (n.b. not shouldn't) that be an alternative? If not, why not?

You say costs would be lower, but I doubt it would result in lower prices. Also how many retailers actually say that their prices are higher because of the CGA. They often say it is because they don't have the buying power due to quantity and shipping costs. People do already have a choice though not to be covered by the CGA for many products, and that is buying online from overseas. I believe the CGA is more benefical for protection for services.
If it ain't broke...

MikeB4

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#1113063 21-Aug-2014 18:49

bazzer:
Geektastic:
bazzer:
Geektastic: Well you appear to be suggesting our statutory warranty policies should be less good than is relatively common elsewhere.

Really? Where?

Incorrectly inferred from this statement:
"Not at all, but just don't fool yourself that you got these rights for free. Surely it could be up to the individual to decide if they want to pay for an extended warranty or not?"

Corrected for you (see here ). I thought we were discussing the merits of the CGA, and I offered up an alternative for discussion. I didn't say that I supported that alternative, in fact earlier I said "I am generally in favour of the CGA". Make of that what you will but I'll try again.

Whatever one's thoughts on the CGA, I don't think one can argue that there aren't compliance costs associated with it ("don't fool yourself that you got these rights for free"). Whether this cost is shared equally between manufacturer, distributor, retailer and consumer or weighted more heavily towards one of them I do not know, but I suspect the consumer ends up bearing the brunt of it.

Is that "fair" (as the OP wrote)? I don't know, but one alternative would be removing the CGA, removing those compliance costs and letting consumers fend for themselves. Presumably the overall cost to the system would be less since, for example, there wouldn't be the admin costs or any consumers exploiting it. The problem is that the costs would be "lumpier", i.e. concentrated in the consumers (like KiwiNZ) that get stuck with a faulty product rather than spread evenly over the entire consumer base. In this market, some people would pay higher prices (i.e. the "extended warranty" I alluded to) in order to get better quality products/service. Some people would rather buy the cheap stuff and deal with the possibility of failure. Couldn't (n.b. not shouldn't) that be an alternative? If not, why not?

If the retailers and manufacturers want to avoid the costs of the CGA the onus is on them not the consumer, produce and sell products that are durable and of acceptable quality. It is not the consumers fault they produce or sell products that are not durable and of good quality. quite simple they cannot do that get out of business.

Talkiet

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#1113082 21-Aug-2014 19:06

KiwiNZ: [snip]
If the retailers and manufacturers want to avoid the costs of the CGA the onus is on them not the consumer, produce and sell products that are durable and of acceptable quality. It is not the consumers fault they produce or sell products that are not durable and of good quality. quite simple they cannot do that get out of business.

What rubbish... There SHOULD be a market for cheap, near disposable items - as well as well made durable versions of the same....

I recently bought a Jigsaw (tool) that I knew I was going to use once. I am very grateful that I could spend $19 and get a rubbish one from Bunnings, instead of having to spend $100-$200-whatever on a durable, long lasting model.

The cheap one I got did the job I wanted it for and I'm not sure it would have lasted much longer.

But as a consumer, I think it's GREAT I get to choose from cheap and rubbish, or expensive and good.

I would hate to live in an environment where my only choice was one or the other.

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.

dejadeadnz

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#1113084 21-Aug-2014 19:09

KiwiNZ:
bazzer:
KiwiNZ: 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.

Not at all, but just don't fool yourself that you got these rights for free. Surely it could be up to the individual to decide if they want to pay for an extended warranty or not?

That is just pure nonsense, you opt out if you like and whenever a product prematurely packs up on you buy a new one or pay for the repair, I will use the very good legislation that those before you lobbied for.

There's actually another entirely separate matter that most of the ranters/ravers about how the CGA adds a premium to prices that everyone is forced to pay are missing: the unspoken but completely obvious assumption is that if somehow the unreasonable (in their opinion) CGA coverage were gone, retailers/manufacturers would pass on some or all of the savings to the end customer. What complete and utter economic illiteracy. Prices are set by supply and demand, not merely costs of inputs or general business costs. Then there's the issue of a massive information asymmetry -- few people truly know the extent to which retailers/manufacturers "suffer" as a result of the CGA. In such a case, how are customers to pressure for lower prices were the so called unreasonable CGA rights gone?

Then there are also comparable historical precedents to consider. One example is the Commerce Commission's action that resulted in the banks and the credit card companies agreeing that retailers cannot be banned from imposing surcharges for using credit cards. In general, barring sectors like airlines, only the odd retailer here and there has imposed surcharges AND as far as I am aware few offer genuine discounts for paying cash. Most retailers continue to make no differentiation between cash and credit card payers. Then there are those industries (like PC component retail) where traditionally retailers have generally imposed credit card surcharges -- they have carried on as always. This example suggests that those who think a change in general and/or inputs costs for retailers/manufacturers will instantly result in commensurate or at least interlinked price decreases should really go back to school.

MikeB4

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#1113088 21-Aug-2014 19:15

Talkiet:
KiwiNZ: [snip]
If the retailers and manufacturers want to avoid the costs of the CGA the onus is on them not the consumer, produce and sell products that are durable and of acceptable quality. It is not the consumers fault they produce or sell products that are not durable and of good quality. quite simple they cannot do that get out of business.

What rubbish... There SHOULD be a market for cheap, near disposable items - as well as well made durable versions of the same....

I recently bought a Jigsaw (tool) that I knew I was going to use once. I am very grateful that I could spend $19 and get a rubbish one from Bunnings, instead of having to spend $100-$200-whatever on a durable, long lasting model.

The cheap one I got did the job I wanted it for and I'm not sure it would have lasted much longer.

But as a consumer, I think it's GREAT I get to choose from cheap and rubbish, or expensive and good.

I would hate to live in an environment where my only choice was one or the other.

Cheers -N

not rubbish, read my post again, the key words are "acceptable quality". The logic behind that is if one is buying $19 jigsaw then the quality one will accept is well below the quality one would accept from a $300 unit. To use my example earlier my iMac, this cost around $3500, I expect that to last considerably longer than a sub $900 unit.

I have used the CGA three times of late and none of the products were low end at low end prices, they were high end and failed well before any reasonable person would expect.

My point is the CGA does not preclude cheap disposable products as long as those products are sold as that.

dejadeadnz

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#1113091 21-Aug-2014 19:19

There isn't a place in the market for cheap, disposable rubbish as a result of the CGA? Have people not seen the likes of The Warehouse and the ubiquitous two dollar shops lately? In all seriousness, some of the anti-CGA posts in this thread are at best bizarre and, at worst, remarkably poor reflections of the thinking skills of some people. It might be better if the CGA offered more clarity and, like any legislation, it can stand improvement but as someone who doesn't have huge axes to grind one way or another (I've rarely had to rely on the CGA) but have provided legally informed advice to both consumers and shopkeepers on the issues, I personally find the arguments being put up by the so called pro-CGA crowd here to be far more convincing.

Talkiet

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#1113093 21-Aug-2014 19:22

KiwiNZ: [snip]
not rubbish, read my post again, the key words are "acceptable quality". The logic behind that is if one is buying $19 jigsaw then the quality one will accept is well below the quality one would accept from a $300 unit. To use my example earlier my iMac, this cost around $3500, I expect that to last considerably longer than a sub $900 unit.

I have used the CGA three times of late and none of the products were low end at low end prices, they were high end and failed well before any reasonable person would expect.

My point is the CGA does not preclude cheap disposable products as long as those products are sold as that.

Actually, you said "durable and of acceptable quality" and "durable and good quality". And suggested if manufacturers/retailers couldn't deliver on that, they should get out of business.

I'm mostly disputing your opinion that the responsibility should be on anyone but the consumer. Market forces don't happen overnight, but even in markets without strong consumer protection, you have good, reliable brands and cheap horrid knockoffs - so market forces do work. I think the problem is in NZ that we are so used to having such strong protection already that we'd end up expecting A+ quality for C- prices.

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.

mattwnz

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#1113094 21-Aug-2014 19:26

Talkiet:
KiwiNZ: [snip]
If the retailers and manufacturers want to avoid the costs of the CGA the onus is on them not the consumer, produce and sell products that are durable and of acceptable quality. It is not the consumers fault they produce or sell products that are not durable and of good quality. quite simple they cannot do that get out of business.

What rubbish... There SHOULD be a market for cheap, near disposable items - as well as well made durable versions of the same....

I recently bought a Jigsaw (tool) that I knew I was going to use once. I am very grateful that I could spend $19 and get a rubbish one from Bunnings, instead of having to spend $100-$200-whatever on a durable, long lasting model.

The cheap one I got did the job I wanted it for and I'm not sure it would have lasted much longer.

But as a consumer, I think it's GREAT I get to choose from cheap and rubbish, or expensive and good.

I would hate to live in an environment where my only choice was one or the other.

Cheers -N

The CGA already covers this market, in that very cheap stuff may have very little, if any CGA protection. That is if you buy the cheapest brand with the cheapest normal price, then it may not have any more protection under the CGA, than the normal manufacturers warranty. It is looked at on a case by case basis, on what is 'reasonable'. I have found in one well known NZ store, they were offering their own house brand stuff with just a 3 month warranty. A lot of cheap stuff being sold by intraders on trademe often only has a few months warranty too, and may not have much CGA coverage because they are a lot cheaper and lower quality. It is quite common to see very short warrenty period overseas where they don't have CGA like laws, and the warranty duration on the same product differs by the country it is being sold in.
We do have laws in NZ for a reason, and we don't have choices in many things, as they are decided by societies laws. People do have a say every 3 years at an election.

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