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  Reply # 1063366 11-Jun-2014 13:55
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Aredwood: This thread is an eye opener for me. Im a self employed plumber / gasfitter. Which means I install alot of things like hot water cylinders which are both expensive and which are expected to last a long time. The thought that someone could have a valid claim against me for the entire replacement cost of a 10 year old hot water cylinder is scary. Especially as alot of cylinders are only guaranteed for 5 years by the manufacturer. And that only covers the cylinder itself. The element and thermostat normally only have a 1 year guarantee.

I will now be charging a minimum 20% margin on all major items like hot water cylinders unless the customer is a business. And will be steering customers to Mitre 10, Bunnings ect to directly purchase things like hot water cylinders. So I won't have to cover the CGA risk on things I have no control over. Yet the silly part is if I were to copy property developers and regularly liquidate my company and setup another one. (once per year maybe) Then I won't have long term CGA risk.

I Wonder if more business will spring up that either only sell to other business's. Or will charge high retail prices and then offer free accounts with big discounts to other business's. (2 tier pricing).

The CGA should be changed so Sellers / Manufacturers have to specify the "Half life" of the item they are selling. (Age where they expect that 50% of their product would have suffered a fault that the manufacturer doesn't intend to be repairable) And then require that should an item Suffer an unrepairable fault before it's half life. The seller will only be liable to cover a % of it's value based on how much longer until it's half life. (An item with a 10 year half life fails in year 5 - 50% of it's value is payable. Same item fails at year 9 - 10% of it's value is payable.) I think this will be far better than simply saying items must last a reasonable amount of time. As it makes it clear exactly how much of a guarantee must be offered, Will be an in your face way of telling people that the cheap item they are buying is exactly that - cheap. And will make it easier for manufacturers / sellers to encourage people to buy better quality products. The biggest problem with the current system is that almost every dispute over age of produce can only be settled by litigation.



Why would you charge extra. You can claim that back from the manufacturer yourself, under the CGA surely, as manufacturers also have to abide by the CGA. Possibly some don't due to the paperwork and relationship they may have with the supplier/manufacturer. The retailer shouldn't bear any of the costs, apart from the admin involved in returning it to the manufacturer, and communications. Otherwise what you should do is get the customer to buy the hot water cylinder themselves from a retailer, and you only do installs. I think the chances of a HWC failing after even 10 years is tiny, unless they are a poor quality brand, or has manufacturing defects, as there isn't much to them.

I think you are missing the point of the CGA. It is there to protect NZ consumers against being sold poor quality products. It is reasonable to expect a product that you buy to last a reasonable period of time. And for a hot water cylinder, would you expect to replace your HWC every 5 years? Manufacturers will know their obligations under the CGA too.
If we didn't have the CGA, I expect we would see far more companies selling extended warranties, and some credit card companies do already product extended warranties on purchased paid for by credit card. I think the CGA works reasonably well, but there are always exceptions where both consumers and retailers push the boundaries of it.

One of the things that does annoy me is when spare parts aren't available for consumables and repairs, and luckily the CGA covers this. I had some taps that had special ceramic disks in them. They started dripping after just 3 years. I went back to the retailer, who said they don't have parts for them as they no longer import them. They had to be refunded. They did have a 5 year warranty anyway, so wasn't really a CGA thing, but you don't expect to have to replace taps every 5 years either.

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  Reply # 1063368 11-Jun-2014 13:57
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Aredwood: This thread is an eye opener for me. Im a self employed plumber / gasfitter. Which means I install alot of things like hot water cylinders which are both expensive and which are expected to last a long time. The thought that someone could have a valid claim against me for the entire replacement cost of a 10 year old hot water cylinder is scary. Especially as alot of cylinders are only guaranteed for 5 years by the manufacturer. And that only covers the cylinder itself. The element and thermostat normally only have a 1 year guarantee.

I will now be charging a minimum 20% margin on all major items like hot water cylinders unless the customer is a business. And will be steering customers to Mitre 10, Bunnings ect to directly purchase things like hot water cylinders. So I won't have to cover the CGA risk on things I have no control over. Yet the silly part is if I were to copy property developers and regularly liquidate my company and setup another one. (once per year maybe) Then I won't have long term CGA risk.

I Wonder if more business will spring up that either only sell to other business's. Or will charge high retail prices and then offer free accounts with big discounts to other business's. (2 tier pricing).

The CGA should be changed so Sellers / Manufacturers have to specify the "Half life" of the item they are selling. (Age where they expect that 50% of their product would have suffered a fault that the manufacturer doesn't intend to be repairable) And then require that should an item Suffer an unrepairable fault before it's half life. The seller will only be liable to cover a % of it's value based on how much longer until it's half life. (An item with a 10 year half life fails in year 5 - 50% of it's value is payable. Same item fails at year 9 - 10% of it's value is payable.) I think this will be far better than simply saying items must last a reasonable amount of time. As it makes it clear exactly how much of a guarantee must be offered, Will be an in your face way of telling people that the cheap item they are buying is exactly that - cheap. And will make it easier for manufacturers / sellers to encourage people to buy better quality products. The biggest problem with the current system is that almost every dispute over age of produce can only be settled by litigation.



That actually seems pretty reasonable to me. I am sure consumers would scream! Luckily 99% of the business I do is to businesses which mitigates a lot of the crazy claims made by consumers in this day and age. Sadly the law has got a little crazy trying to protect the poor little consumer who wants everything for nothing. 

The problem we have is that there is no motivation for manufacturers to provide better warranty to retailers, since it isn't them that have to wear the cost. 

We are pretty fortunate that our biggest suppliers being HP and Toshiba tend to be pretty good to deal with due to the relationships we have fostered and the fact they are pretty good to deal with in general.

 
 
 
 


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  Reply # 1063370 11-Jun-2014 14:01
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Aredwood: This thread is an eye opener for me. Im a self employed plumber / gasfitter. Which means I install alot of things like hot water cylinders which are both expensive and which are expected to last a long time. The thought that someone could have a valid claim against me for the entire replacement cost of a 10 year old hot water cylinder is scary. Especially as alot of cylinders are only guaranteed for 5 years by the manufacturer. And that only covers the cylinder itself. The element and thermostat normally only have a 1 year guarantee.

I will now be charging a minimum 20% margin on all major items like hot water cylinders unless the customer is a business. And will be steering customers to Mitre 10, Bunnings ect to directly purchase things like hot water cylinders. So I won't have to cover the CGA risk on things I have no control over. Yet the silly part is if I were to copy property developers and regularly liquidate my company and setup another one. (once per year maybe) Then I won't have long term CGA risk.

I Wonder if more business will spring up that either only sell to other business's. Or will charge high retail prices and then offer free accounts with big discounts to other business's. (2 tier pricing).

The CGA should be changed so Sellers / Manufacturers have to specify the "Half life" of the item they are selling. (Age where they expect that 50% of their product would have suffered a fault that the manufacturer doesn't intend to be repairable) And then require that should an item Suffer an unrepairable fault before it's half life. The seller will only be liable to cover a % of it's value based on how much longer until it's half life. (An item with a 10 year half life fails in year 5 - 50% of it's value is payable. Same item fails at year 9 - 10% of it's value is payable.) I think this will be far better than simply saying items must last a reasonable amount of time. As it makes it clear exactly how much of a guarantee must be offered, Will be an in your face way of telling people that the cheap item they are buying is exactly that - cheap. And will make it easier for manufacturers / sellers to encourage people to buy better quality products. The biggest problem with the current system is that almost every dispute over age of produce can only be settled by litigation.



I assume that if the customer buys the products themselves directly from the supplier you wont be charging an additional 20%, correct?




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The views stated in my posts are my personal views and not that of any other organisation.

 

 It's our only home, lets clean it up then...

 

Take My Advice, Pull Down Your Pants And Slide On The Ice!

 

 


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  Reply # 1063375 11-Jun-2014 14:05
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KiwiNZ: 



I assume that if the customer buys the products themselves directly from the supplier you wont be charging an additional 20%, correct?


Thats what I do anyway. I can get a good discount working in the industry anyway, and means I can choose exactly what I want.

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  Reply # 1063377 11-Jun-2014 14:09
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mattwnz:
KiwiNZ: 



I assume that if the customer buys the products themselves directly from the supplier you wont be charging an additional 20%, correct?


Thats what I do anyway. I can get a good discount working in the industry anyway, and means I can choose exactly what I want.


I have contacts in building supplies and can get some good prices however, I  have struggled on occasion to find a labour only tradesman to do the work.




Mike
Retired IT Manager. 
The views stated in my posts are my personal views and not that of any other organisation.

 

 It's our only home, lets clean it up then...

 

Take My Advice, Pull Down Your Pants And Slide On The Ice!

 

 


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  Reply # 1063380 11-Jun-2014 14:12
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KiwiNZ:
mattwnz:
KiwiNZ: 



I assume that if the customer buys the products themselves directly from the supplier you wont be charging an additional 20%, correct?


Thats what I do anyway. I can get a good discount working in the industry anyway, and means I can choose exactly what I want.


I have contacts in building supplies and can get some good prices however, I  have struggled on occasion to find a labour only tradesman to do the work.


Yes it can be a problem. I sometimes find this, and they will usually buy the product for me and will just add on a small margin to match what I can buy it for. But you do often find in new home builds, that the home owner will buy all the white ware themselves, and the plumber will install it. The plumber will still be making margins on pipes and fittings anyway.

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  Reply # 1063381 11-Jun-2014 14:16
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mattwnz:
KiwiNZ:
mattwnz:
KiwiNZ: 



I assume that if the customer buys the products themselves directly from the supplier you wont be charging an additional 20%, correct?


Thats what I do anyway. I can get a good discount working in the industry anyway, and means I can choose exactly what I want.


I have contacts in building supplies and can get some good prices however, I  have struggled on occasion to find a labour only tradesman to do the work.


Yes it can be a problem. I sometimes find this, and they will usually buy the product for me and will just add on a small margin to match what I can buy it for. But you do often find in new home builds, that the home owner will buy all the white ware themselves, and the plumber will install it. The plumber will still be making margins on pipes and fittings anyway.


Funniest thing I have seen is builders putting a "management margin" on their own labour. Those people get told to GTFO.

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  Reply # 1063384 11-Jun-2014 14:19
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mattwnz:
Aredwood: This thread is an eye opener for me. Im a self employed plumber / gasfitter. Which means I install alot of things like hot water cylinders which are both expensive and which are expected to last a long time. The thought that someone could have a valid claim against me for the entire replacement cost of a 10 year old hot water cylinder is scary. Especially as alot of cylinders are only guaranteed for 5 years by the manufacturer. And that only covers the cylinder itself. The element and thermostat normally only have a 1 year guarantee.

I will now be charging a minimum 20% margin on all major items like hot water cylinders unless the customer is a business. And will be steering customers to Mitre 10, Bunnings ect to directly purchase things like hot water cylinders. So I won't have to cover the CGA risk on things I have no control over. Yet the silly part is if I were to copy property developers and regularly liquidate my company and setup another one. (once per year maybe) Then I won't have long term CGA risk.

I Wonder if more business will spring up that either only sell to other business's. Or will charge high retail prices and then offer free accounts with big discounts to other business's. (2 tier pricing).

The CGA should be changed so Sellers / Manufacturers have to specify the "Half life" of the item they are selling. (Age where they expect that 50% of their product would have suffered a fault that the manufacturer doesn't intend to be repairable) And then require that should an item Suffer an unrepairable fault before it's half life. The seller will only be liable to cover a % of it's value based on how much longer until it's half life. (An item with a 10 year half life fails in year 5 - 50% of it's value is payable. Same item fails at year 9 - 10% of it's value is payable.) I think this will be far better than simply saying items must last a reasonable amount of time. As it makes it clear exactly how much of a guarantee must be offered, Will be an in your face way of telling people that the cheap item they are buying is exactly that - cheap. And will make it easier for manufacturers / sellers to encourage people to buy better quality products. The biggest problem with the current system is that almost every dispute over age of produce can only be settled by litigation.



Why would you charge extra. You can claim that back from the manufacturer yourself, under the CGA surely, as manufacturers also have to abide by the CGA. Possibly some don't due to the paperwork and relationship they may have with the supplier/manufacturer.


Someone that is in business and buys something from a manufacturer to onsell/install for a consumer as part of his/her business is usually NOT covered by the CGA because people are allowed to contract out of the CGA for B2B transactions - see s 43. 

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  Reply # 1063386 11-Jun-2014 14:24
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Aredwood: This thread is an eye opener for me. Im a self employed plumber / gasfitter. Which means I install alot of things like hot water cylinders which are both expensive and which are expected to last a long time. The thought that someone could have a valid claim against me for the entire replacement cost of a 10 year old hot water cylinder is scary. Especially as alot of cylinders are only guaranteed for 5 years by the manufacturer. And that only covers the cylinder itself. The element and thermostat normally only have a 1 year guarantee.

I will now be charging a minimum 20% margin on all major items like hot water cylinders unless the customer is a business. And will be steering customers to Mitre 10, Bunnings ect to directly purchase things like hot water cylinders. So I won't have to cover the CGA risk on things I have no control over. Yet the silly part is if I were to copy property developers and regularly liquidate my company and setup another one. (once per year maybe) Then I won't have long term CGA risk.

I Wonder if more business will spring up that either only sell to other business's. Or will charge high retail prices and then offer free accounts with big discounts to other business's. (2 tier pricing).

The CGA should be changed so Sellers / Manufacturers have to specify the "Half life" of the item they are selling. (Age where they expect that 50% of their product would have suffered a fault that the manufacturer doesn't intend to be repairable) And then require that should an item Suffer an unrepairable fault before it's half life. The seller will only be liable to cover a % of it's value based on how much longer until it's half life. (An item with a 10 year half life fails in year 5 - 50% of it's value is payable. Same item fails at year 9 - 10% of it's value is payable.) I think this will be far better than simply saying items must last a reasonable amount of time. As it makes it clear exactly how much of a guarantee must be offered, Will be an in your face way of telling people that the cheap item they are buying is exactly that - cheap. And will make it easier for manufacturers / sellers to encourage people to buy better quality products. The biggest problem with the current system is that almost every dispute over age of produce can only be settled by litigation.



i think this is a bit of an over-reaction.

by charging 20% more to cover CGA claims, you are basically saying that 1 in 5 of the hot water cylinders will have a CGA claim on it which you won't be able to claim back from the manufacturers.

That seems extremely high to me.

(remember that we're talking about claims, not actual failure rates.  Most consumers won't put a CGA claim on something more than a few years old, people won't keep receipts of who they got it from, and a lot of house will be bought and sold within the 10 years, so the new owners won't be able to make the claim either.

The simple question is:  
How many people currently make claims against you?  The CGA has been around for years so there is no reason to expect this to change materially in the future.

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  Reply # 1063388 11-Jun-2014 14:26
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NonprayingMantis:
Aredwood: This thread is an eye opener for me. Im a self employed plumber / gasfitter. Which means I install alot of things like hot water cylinders which are both expensive and which are expected to last a long time. The thought that someone could have a valid claim against me for the entire replacement cost of a 10 year old hot water cylinder is scary. Especially as alot of cylinders are only guaranteed for 5 years by the manufacturer. And that only covers the cylinder itself. The element and thermostat normally only have a 1 year guarantee.

I will now be charging a minimum 20% margin on all major items like hot water cylinders unless the customer is a business. And will be steering customers to Mitre 10, Bunnings ect to directly purchase things like hot water cylinders. So I won't have to cover the CGA risk on things I have no control over. Yet the silly part is if I were to copy property developers and regularly liquidate my company and setup another one. (once per year maybe) Then I won't have long term CGA risk.

I Wonder if more business will spring up that either only sell to other business's. Or will charge high retail prices and then offer free accounts with big discounts to other business's. (2 tier pricing).

The CGA should be changed so Sellers / Manufacturers have to specify the "Half life" of the item they are selling. (Age where they expect that 50% of their product would have suffered a fault that the manufacturer doesn't intend to be repairable) And then require that should an item Suffer an unrepairable fault before it's half life. The seller will only be liable to cover a % of it's value based on how much longer until it's half life. (An item with a 10 year half life fails in year 5 - 50% of it's value is payable. Same item fails at year 9 - 10% of it's value is payable.) I think this will be far better than simply saying items must last a reasonable amount of time. As it makes it clear exactly how much of a guarantee must be offered, Will be an in your face way of telling people that the cheap item they are buying is exactly that - cheap. And will make it easier for manufacturers / sellers to encourage people to buy better quality products. The biggest problem with the current system is that almost every dispute over age of produce can only be settled by litigation.



i think this is a bit of an over-reaction.

by charging 20% more to cover CGA claims, you are basically saying that 1 in 5 of the hot water cylinders will have a CGA claim on it which you won't be able to claim back from the manufacturers.

That seems extremely high to me.

(remember that we're talking about claims, not actual failure rates.  Most consumers won't put a CGA claim on something more than a few years old, people won't keep receipts of who they got it from, and a lot of house will be bought and sold within the 10 years, so the new owners won't be able to make the claim either.

The simple question is:  
How many people currently make claims against you?  The CGA has been around for years so there is no reason to expect this to change materially in the future.


I would disagree. Whilst CGA has been around a long time, it's only in the last 2 years the average consumer has realized they can make use of it themselves. Check the number of topics/Threads here in the past 2 years vs the 5 years previously with the CGA mentioned if you want some evidence. 


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  Reply # 1063454 11-Jun-2014 15:49
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jarledb: Any business that wants to continue being in business for a while need to make sure that they can pay their rent, staff and have enough left over to deal with warranties. You can only ignore such things if you are a fly by night company and don't plan on staying in business.

It seems to me like one of the problems for retailers in NZ is that they in many cases have to compete with US web shops, which often have lower taxes (GST/VAT) and higher volumes - as well as lower purchasing prices. (At least if you are not parallel importing, but that probably leaves you completely alone to deal with warranties).

There has been a VAT-limit of only NZD 40 on imports to Norway for a long time now. (And the GST is at 25%), so norwegian businesses are not as effected by foreign web shops as New Zealand companies are. That might be something to look at for NZ politicians (wrong party at power now for that to happen).

Not great for consumers, but allows you to have sustainable national companies that are not driven out of business by foreign companies.


Sigh.  How many times does it have to be said?  Lowering the non-taxable threshold at the border is NOT the solution?  In the majority of cases, the import/shipping costs alone are more than the GST component of buying it locally, and yet it still costs anywhere from twice to ten(!!!!) times the price after factoring that in.  Hell, even factoring GST on top of it, sometimes it still turns out quadruple the price in NZ.  The fact of the matter is that NZ retailers don't want to compete, and simply push for lower GST threshold so that they can explain their uncompetitiveness as as being Someone Else's Fault.  Margins on some products in NZ are absolutely hideous (Kathmandu's margins are easily 150-200% markup as an example, which explains The Neverending Sale) and NZ retailers would rather try and make the prices of personal imports higher than accept lower markup.  And if you try to say that the margin is somehow justified by the service, well - the worst service I've experienced has been from Big NZ Names like Pak 'N Save.  I actually boycott Pak N Save in favour of the Aussie giant Countdown.

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  Reply # 1063480 11-Jun-2014 16:12
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Kyanar, having been in the retail business and bought products from the local importers (not in NZ; but in a fairly similar country). I know for a fact that there are some factors that makes prices higher.

First off US companies does not need to deal with CGA and the likes, the customer rights in NZ actually has a cost.

Second, US companies will have lower prices when buying the products from the producer/distributor. One reason is higher volume, another is that the producers often charge more for their products outside of the US.

Third, companies in NZ has to deal with a fairly steep freight cost, as well as higher prices from the importers/distributors.

So even though the products end up being more expensive here, the difference doesn't end up in the pocket of the retailers.




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  Reply # 1063482 11-Jun-2014 16:15
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networkn: 

I would disagree. Whilst CGA has been around a long time, it's only in the last 2 years the average consumer has realized they can make use of it themselves. Check the number of topics/Threads here in the past 2 years vs the 5 years previously with the CGA mentioned if you want some evidence. 



But the CGA has been around for a long time, so consumers have had that protection for a long time. I think the growth of social media and online forums has meant that people are getting more clued up, and are asking questions, as well as target and fairgo. Also more education, and the stomping down by regulator on extended warranties that didn't give any more protection than the CGA. I remember 10-15 years ago, buying an extended warranty was relatively normal thing to do on higher value electronics. However people asking questions on forums will still only represent a tiny percentage of the population.

I think part of the problem is the drop in price of electronics, and consumers thinking that these low cost electronics should have the same protections as high value premium ones. There probably needs to be something more specific in the CGA about this.

I don't think there has been such a drop in price in plumbing stuff, although if there has that may have more to do with the exchange rate than technology. There is no real reason for plumbing stuff to fail prematurely, unless there is a maufacturing defect, or things are poorly/cheaply made IMHO.

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  Reply # 1063504 11-Jun-2014 16:28
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NonprayingMantis:
i think this is a bit of an over-reaction.

by charging 20% more to cover CGA claims, you are basically saying that 1 in 5 of the hot water cylinders will have a CGA claim on it which you won't be able to claim back from the manufacturers.

That seems extremely high to me.

(remember that we're talking about claims, not actual failure rates.  Most consumers won't put a CGA claim on something more than a few years old, people won't keep receipts of who they got it from, and a lot of house will be bought and sold within the 10 years, so the new owners won't be able to make the claim either.

The simple question is:  
How many people currently make claims against you?  The CGA has been around for years so there is no reason to expect this to change materially in the future.


Exxxactly. The kind of over dramatic, if not outright hyperbolic reaction of Aredwood suggests to me a very poor understanding of the law and business reality. In a truly competitive environment, I am not convinced that he can get away with what he proposed and still maintain the same level of business. To be frank, this thread has been an eye-opener for me in one respect (and not a good sense): it's scary how many people just can't rationalise disputes and/or accept that there are some costs and risks to doing business.



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  Reply # 1063511 11-Jun-2014 16:44
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dejadeadnz: 

Exxxactly. The kind of over dramatic, if not outright hyperbolic reaction of Aredwood suggests to me a very poor understanding of the law and business reality. In a truly competitive environment, I am not convinced that he can get away with what he proposed and still maintain the same level of business. To be frank, this thread has been an eye-opener for me in one respect (and not a good sense): it's scary how many people just can't rationalise disputes and/or accept that there are some costs and risks to doing business.




I wonder how many business have gone under or suffered serious hardship, because they have to honour CGA claims. If there are any, I would think it would only be the ones who would be selling really poor quality products. And if that is the case, then the CGA is fulfilling it's purpose, as it is partly to protect the consumer against poor quality products being sold.

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