Five garden bag brands (Gabco Garden Bags and Bins, The Garden Bag Company, Manukau Garden Bins, Clippa Garden Bags and Bins and Greenfingers Garden Bags) have been warned for potentially creating the impression that customers were required to pay for additional garden bag services they did not request.
Commerce Commission General Manager of Fair Trading, Vanessa Horne, says some customers were under the impression that a payment was expected, because when a spare garden bag was delivered to their home, the businesses stated an annual rental fee would apply unless the bag was returned before a certain date.
“As the customers did not request the bag, or any additional services, the product was therefore ‘unsolicited’. It is illegal under the Fair Trading Act for any business to ask for payment or expect a customer to take any action to avoid a payment, on an unsolicited good or service.”
A pattern of customer complaints highlighted the conduct, and likely breaches of the Fair Trading Act, after additional garden bags were dropped off to approximately 40,000 existing customers’ homes as part of marketing activity (promoted as a ‘Spare Bag’ trial) between October 2020 and January 2021.
The 20 complaints followed garden bags being dropped off at customers’ homes with a letter (and in some cases an email) communicating that they were offered as a trial, in addition to their current green waste collection service. The communications referenced a $26 annual fee which would apply if they kept the bag after a certain date, and that if they did not want to keep the bag, the customers were advised to log in to their online account to book a removal.
Ms Horne says that customers should not be expected to pay for a good or service that they did not request.
“It’s important when marketing products and services in new ways, that businesses still understand their obligations under the Fair Trading Act. They should not expect payment from customers if they deliver a good or provide a service that has not been requested, and they must not mislead customers into thinking they need to opt-out of a payment.”
The Commission understands that no customers were charged for the trial. However, the customers who came forward with complaints have enabled the Commission to take action.
“The brands have since reviewed their marketing material and internal sign-off processes to help ensure the conduct does not occur again,” Ms Horne says.
The Commission understands that the following associated brands have also offered the ‘Spare Bag’ trial and has provided subsequent compliance advice to them.
- Auckland Garden Bins
- North Shore Garden Bins
- Counties Garden Bins
- Waitakere Garden Bins
- North Harbour Garden Bags
- GardenBags.co.nz
- GardenBins.co.nz
- Baycomp Garden Bags
- Waikato Garden Bins
- Rotorua Garden Bins
All brands that offered the ‘Spare Bag’ trial are owned by three related companies across Aotearoa New Zealand.
Background
An unsolicited good or service is one that has been provided to a person that was not requested. In this case, the spare garden bags are unsolicited goods because they were delivered to customers’ homes without being requested. The offer of the spare bag service for additional green waste collection (on top of customers’ usual regular collection service) was also unsolicited because customers did not request an additional green waste collection service.
Under the Fair Trading Act (s21C) it is illegal for businesses to assert, or appear to assert, a right to payment for any goods or services their customer has not requested. If a person or business sends or delivers unsolicited goods to another person, the recipient is not liable to pay for the goods.
Relevant case
In 2018, the Commission to NZ Trustees Association Charitable Trust (the Trustees Association) about concerns with invoices it sent to registered New Zealand charities for membership services.
