CGA advice

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#1756555 4-Apr-2017 19:44

mattwnz:

Apparently according to this article which is about the CGA and cars, "There’s no provision [in the CGA] for account to be taken
of the use of goods before a consumer rejects them" http://autofile.co.nz/issues/Past/2013/2013-01-15%20Autofile.pdf .

I dont get that. Say you bought an oven for $3000. Used it for 7 years. It failed. You get a brand new one for free or you get a brand new one, less a fair and reasonable allowance for past use. We would be super hoping every 7 years it will fail, and please, tell me you cant repair it so I get a free new one.

The CGA should be allowing for the dismissal of silly 12 month warranties for goods that have a lengthy life. It does that. But it also IMHO unfairly penalises manufacturers for faults but no allowance for past use. If I had a 7 year old oven that failed, I dont want it repaired as I can get a new one for nothing.

If I was a manufacturer, I would cartel with the others to increase prices to pay for the gazillion year warranty.

Now, dont look at me as being anti CGA, but fair is fair. Is a 3 year old product with no parts the same as an old cruddy one with no parts?

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#1756557 4-Apr-2017 19:46

loceff13:

networkn:Yeah the CGA doesn't really take this into account specifically, mostly because of the complications, though it should. We see the same thing with computers. Someone who buys a $299 computer shouldn't be entitled to a 5 year warranty whereas in my eyes someone who spends $1500+ might.

What about for a part like a HDD? imo theres a very valid argument for that lasting 3 years regardless of the laptop it came in. Theres simply no data showing cheaper value drives last less time(for consumer products). I'm of the opinion even the cheap <$400 laptops should last 2 years easy given they are new when you buy them(not re-manufactured etc).

Fair enough if its just the HDD. Everything else is dubious though. But then the HDD manufacturer has lost control as the laptop maker has had his grubby hands on it, and the user dropped the laptop, etc

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#1756559 4-Apr-2017 19:50

mattwnz:

loceff13:

networkn:Yeah the CGA doesn't really take this into account specifically, mostly because of the complications, though it should. We see the same thing with computers. Someone who buys a $299 computer shouldn't be entitled to a 5 year warranty whereas in my eyes someone who spends $1500+ might.

What about for a part like a HDD? imo theres a very valid argument for that lasting 3 years regardless of the laptop it came in. Theres simply no data showing cheaper value drives last less time(for consumer products). I'm of the opinion even the cheap <$400 laptops should last 2 years easy given they are new when you buy them(not re-manufactured etc).

Computers are very different, because you can just switch out parts, and all th aprts are made by different manufacturers. A computer is a bit like buy a new house, where you have lots of appliances, where one may fail, you can just get it switch it out. You don't have to replace a house if an appliance fails.

What does consumers life expectancy table say, as they will have a range depending on the cheapest to the most expensive. Then there is the fact that you may buy something for 50% off, and the RRP may have been $2000, but you only paid $1000, and $1000 is what cheap poorly made products are piced at.. Should that product you purchased on discount last less time than the full priced product, because it was on special?

If I was the OP, what I may do is ask NZ Consumer to get their opinion. I believe you can only do this if you are a subscriber, but that maybe worth it. Then send that to the company, as that is an impartial opinion by a NZ consumer expert. Going to the DT is costly in time, and it appears it can be a bit of a gamble depending on who you get. But taking NZ consumers opinion into the DT should add some weight to your case, as they are the experts, and it is independent, and has no bias. The other option is to go to the CAB for some advice.

They do have bias, but having said that not that much but they must have. Fair Go, thats getting shocking. Its a pro consumer( good) and anti retailer sensationalist program

The issue is some consumers want too much, past the fair and reasonable. And there are the manufacturers who wont give you fair and reasonable.

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#1756583 4-Apr-2017 20:20

I am not sure about that as they have no incentive to advise either way as they are independent of the situation. They also have a reputation. Retailers could also contact consumer for advice over what they should do in a CGA claim. Any consumer or retailer though would have a certain level of bias.

Most of the time when faults occur they are repairable. The big difference it appears with this case is the lack of spare parts. If they had the spare parts this would have been easily solved. This is why the CGA has that requirement unless it is clearly stated that spare parts won't be available.

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#1756675 4-Apr-2017 23:55

tdgeek:

I dont get that. Say you bought an oven for $3000. Used it for 7 years. It failed. You get a brand new one for free or you get a brand new one, less a fair and reasonable allowance for past use. We would be super hoping every 7 years it will fail, and please, tell me you cant repair it so I get a free new one.

Well, if manufacturers and retailers honour their responsibilities, they will not have to give away a free oven, they just need to keep parts for the period of time the consumer watchdog in the country of sale, deems reasonable.

I have personal knowledge of a US Based appliance manafacturer, they know they need to keep parts for 5 years for example, but the cost of that, storage etc isn't practical or cost effective, so they have a policy of customers who have a fault past 4 years, they go all out and make the customer feel special, give them a new appliance, kill them with kindness (They even hand deliver them and install them), along with Chocolates and a "Thank you for choosing x appliances, we are really sorry you didn't have a perfect experience with your appliance etc" card. They do this because their appliances have a pretty low failure rate and they also know that a happy customer tells 3 people, but an unhappy one, tells 10.

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#1756706 5-Apr-2017 06:48

networkn:

tdgeek:

I dont get that. Say you bought an oven for $3000. Used it for 7 years. It failed. You get a brand new one for free or you get a brand new one, less a fair and reasonable allowance for past use. We would be super hoping every 7 years it will fail, and please, tell me you cant repair it so I get a free new one.

Well, if manufacturers and retailers honour their responsibilities, they will not have to give away a free oven, they just need to keep parts for the period of time the consumer watchdog in the country of sale, deems reasonable.

I have personal knowledge of a US Based appliance manafacturer, they know they need to keep parts for 5 years for example, but the cost of that, storage etc isn't practical or cost effective, so they have a policy of customers who have a fault past 4 years, they go all out and make the customer feel special, give them a new appliance, kill them with kindness (They even hand deliver them and install them), along with Chocolates and a "Thank you for choosing x appliances, we are really sorry you didn't have a perfect experience with your appliance etc" card. They do this because their appliances have a pretty low failure rate and they also know that a happy customer tells 3 people, but an unhappy one, tells 10.

Ok, yeah. A very recent thread here had I think it was a TV. he didn't want it repaired as then it will be second hand. It already is. I guess my point comes form the "cool, I get can a new one" mindset of some. Having also to keep parts for many many years is a cost. Would be interesting to know the cost of that vs landed cost of a new one. Then you get the " I hope we get a new one as I want to upgrade", yet they spew when its like for like

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#1756883 5-Apr-2017 11:11

tdgeek:

Ok, yeah. A very recent thread here had I think it was a TV. he didn't want it repaired as then it will be second hand. It already is. I guess my point comes form the "cool, I get can a new one" mindset of some. Having also to keep parts for many many years is a cost. Would be interesting to know the cost of that vs landed cost of a new one. Then you get the " I hope we get a new one as I want to upgrade", yet they spew when its like for like

I am of the opinion that the CGA is too focused on the consumer and doing what's right for them at any cost. When people made 40% margin on electronics, sure, it was reasonable, but when some people are making single digit mark-ups and the consumer is benefiting from that, then I think it's too much.

There will always be people trying to take the mickey, and companies who are also going to try it on, like Parmco here. Unfortunately, systems/rules and laws generally aren't robust unless they are blanket and ignore the fringe cases.

Personally, I think manufacturers need to increase their margins slightly, to create a warranty slush fund and if the goods are distributed through authorised channels, the manufacturer should be responsible, and if it's not an officially imported product, the retailer should be responsible.

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#1756892 5-Apr-2017 11:25

networkn:

tdgeek:

Ok, yeah. A very recent thread here had I think it was a TV. he didn't want it repaired as then it will be second hand. It already is. I guess my point comes form the "cool, I get can a new one" mindset of some. Having also to keep parts for many many years is a cost. Would be interesting to know the cost of that vs landed cost of a new one. Then you get the " I hope we get a new one as I want to upgrade", yet they spew when its like for like

I am of the opinion that the CGA is too focused on the consumer and doing what's right for them at any cost. When people made 40% margin on electronics, sure, it was reasonable, but when some people are making single digit mark-ups and the consumer is benefiting from that, then I think it's too much.

There will always be people trying to take the mickey, and companies who are also going to try it on, like Parmco here. Unfortunately, systems/rules and laws generally aren't robust unless they are blanket and ignore the fringe cases.

Personally, I think manufacturers need to increase their margins slightly, to create a warranty slush fund and if the goods are distributed through authorised channels, the manufacturer should be responsible, and if it's not an officially imported product, the retailer should be responsible.

But, it isn't the fault of the CGA that retail margins are in the gutter. That is firmly the fault of the retailer and their 'first to the bottom' sale mentality (and us, as consumers, demanding the cheapest prices).

Agreed that the margins are too low to sustain a decent after-sales service, and that the only way round it is putting prices up. This can only be done by the importer/manufacturer as retailers are always going to cut the guts out of it. The result of this, though, would be everyone complaining about how much these things cost here compared to overseas...

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#1756898 5-Apr-2017 11:34

trig42:

But, it isn't the fault of the CGA that retail margins are in the gutter. That is firmly the fault of the retailer and their 'first to the bottom' sale mentality (and us, as consumers, demanding the cheapest prices).

Agreed that the margins are too low to sustain a decent after-sales service, and that the only way round it is putting prices up. This can only be done by the importer/manufacturer as retailers are always going to cut the guts out of it. The result of this, though, would be everyone complaining about how much these things cost here compared to overseas...

I wasn't suggesting the CGA is at fault, but it should be apparent to those people who created the CGA, that there was a race to the bottom and consumers demand lower prices.

I am not sure what the answer is. I had no issue with mandatory warranty periods being extended, and or extended warranties being on offer beyond that.

We sell IT Gear to businesses. I refuse to compete on price usually, stating to customers that if they want premium support, we can't do it off single-digit margins, and they are welcome to purchase their gear elsewhere and we will support it. Some do this for a while, and then realize by the time we charge for our time doing warranty support of their under warranty product, that they aren't saving anything long term anyway.

We focus on value rather than price. Some people can't get it, and they move on, we don't lose much sleep in those cases.

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#1756899 5-Apr-2017 11:35

trig42:

networkn:

tdgeek:

Ok, yeah. A very recent thread here had I think it was a TV. he didn't want it repaired as then it will be second hand. It already is. I guess my point comes form the "cool, I get can a new one" mindset of some. Having also to keep parts for many many years is a cost. Would be interesting to know the cost of that vs landed cost of a new one. Then you get the " I hope we get a new one as I want to upgrade", yet they spew when its like for like

I am of the opinion that the CGA is too focused on the consumer and doing what's right for them at any cost. When people made 40% margin on electronics, sure, it was reasonable, but when some people are making single digit mark-ups and the consumer is benefiting from that, then I think it's too much.

There will always be people trying to take the mickey, and companies who are also going to try it on, like Parmco here. Unfortunately, systems/rules and laws generally aren't robust unless they are blanket and ignore the fringe cases.

Personally, I think manufacturers need to increase their margins slightly, to create a warranty slush fund and if the goods are distributed through authorised channels, the manufacturer should be responsible, and if it's not an officially imported product, the retailer should be responsible.

But, it isn't the fault of the CGA that retail margins are in the gutter. That is firmly the fault of the retailer and their 'first to the bottom' sale mentality (and us, as consumers, demanding the cheapest prices).

Agreed that the margins are too low to sustain a decent after-sales service, and that the only way round it is putting prices up. This can only be done by the importer/manufacturer as retailers are always going to cut the guts out of it. The result of this, though, would be everyone complaining about how much these things cost here compared to overseas...

Same scenario for call centre service. Its very easy to have a great call centre, great skills, easy and quick IVR, low or no wait times. But the consumer wants all that, PLUS the cheap broadband

tdgeek

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#1756902 5-Apr-2017 11:38

I think one option for fairness, is to set a line where replacement has some form of depreciation. Not linear, but an allowance. But the same issue applies, there is a cost, and no one wants to wear it.

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#1757081 5-Apr-2017 15:00

tdgeek:

I think one option for fairness, is to set a line where replacement has some form of depreciation. Not linear, but an allowance. But the same issue applies, there is a cost, and no one wants to wear it.

I don't agree on that, as the CGA exists so consumers are provided with quality products (in relation to the products relative value), that they last a reasonable period of time, and that manufacturers continue to provide spare parts. Also the current laws is pretty simple, the only variable is probably what the expected life should be. However consumer NZ does have a range of expected lives depending on whether it is a . If you are then building in deprecation to the figures, computers are normally deprecated after only 2-3 years etc, it makes it a lot more complex, and means there is less incentive to retain spare parts, and build things to a high standard . Why should consumers have to buy a new PC every 2-3 years if manufacturers then decide to build things to a lower quality so that it lasts just within that period. Not only that but it has the potential to create a lot more waste, and makes us more of a disposable society. Things can be built to last. For example I have an old 40 year old kettle. I decided to replace it about 3 years ago with a $150 nice looking modern kettle, even though the old one still worked well, it looked a bit shabby. The plastic windows on the new one have since cracked from the heat, and it has now completely died. So it appears at least some of these new ones appear that they are built to last a certain amount of time, even though they are not exactly cheap. In this case the manufacturer replaced it without any issues, which I commended them for.

You also have to remember that a manufacturers cost price is often a lot lower than RRP. So for example, a $100 product may only cost the manufacturer $40 to produce. So if say after 2 years something was depreciated 50% in value, and the consumer is going to have to pay $50 to get a replacement new product, the manufacturer still makes a good margin on that replacement. In many cases though they may try to sell it to you at their cost, so they aren't out of pocket, but the consumer is. It is even more complex if you happen to buy the item on sale.

So the current CGA system encourages things to be built to a high standard and be durable, and manufacturers to retain spare parts, and it is a relatively simple system. The problem is that many people don't seem to understand the CGA properly.

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#1757091 5-Apr-2017 15:17

What you haven't taken into account is that the customer is paying $50 for what they would presumably have to pay $100 without the CGA in this scenario, yet effectively getting a new product and new warranty. I think if depreciation was factored in, then the warranty would restart.

I think you would find that the reality of the situation, at least in Electronics and Appliances in general, the manufacturers (landed) cost is exceptionally unlikely to be $50 on an item with an RRP of $100.

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#1757140 5-Apr-2017 16:03

networkn:

What you haven't taken into account is that the customer is paying $50 for what they would presumably have to pay $100 without the CGA in this scenario, yet effectively getting a new product and new warranty. I think if depreciation was factored in, then the warranty would restart.

I think you would find that the reality of the situation, at least in Electronics and Appliances in general, the manufacturers (landed) cost is exceptionally unlikely to be $50 on an item with an RRP of $100.

Currently under the CGA, the warranty doesn't restart. But in many cases the warranty doesn't usually provide anymore of a benefit than the CGA. The only benefit maybe that there is less hassle. But making a claim under the CGA shouldn't be a hassle, and it is quite straight forward, and there are lots of examples out there.

If deprecation was factored in, and customers then have to pay the difference, then I would think the warranty should have to restart again. But then you get into complexities over whether you have to pay the difference on the RRP, or the price you actually paid for it. Then the new model may be a lot more expensive etc. It gets very complex for the consumer, and the current system is pretty simple.

Do you think the manufacturers cost would be higher or lower on a $100 product? Retailers often give 30%+ off these days, and many people now won't buy unless it is discounted by around that much. I have seen small appliances that have a 'regular price' of say $129, regularly discounted 50% off, and in some cases as low as 70% off, so I suspect margins on those types of products are pretty healthy. The retailer theoretically should never be out of pocket with a CGA claim, as they would normally contact the manufacturer for a solution, unless I guess if the manufacturer no longer exists. But that is an incentive for them to choose to sell products only from good manufacturers.

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#1757173 5-Apr-2017 16:22

I think its about time to put in Hard time frames for products, this way the stores/importers/manufacturer know that they need to support a product for a set amount of time and have parts made to cover that set of time before stopping their production runs of said models.

This should also improve manufacturing of low end "cheap rubbish" products that manufacturer expect people to throw away after 2 years and buy a new one (i.e. that $500 dollar 40" tv under these rules should last just as long as a $3000 tv and have parts for the next 5 years). Lets face it, years ago things would last for years and years, now "some" manufacturers want you to replace stuff every 18 months.

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