Fine print and fees prompt hamper warning

As boxes of pre-paid Christmas hamper goodies start landing on doorsteps this month Wanganui Budget Advisory service is warning people to read the fine print before signing up for another Christmas hamper scheme in January.
The warning comes on the back of a statement made by Commerce Commission enforcement manager Graham Gill to the New Zealand Herald that it had instructed Crown solicitor Meredith Connell to lay charges against layby hamper company Chrisco, which calls itself "the leading Christmas hamper provider in the country".
The commission alleges that Chrisco's Hampers has made misleading representations by unlawfully charging cancellation fees under the Layby Sales Act 1971.
On Chrisco's website it says cancellation fees on most of its layby orders will incur a charge of 20 per cent of the instalments made up to 90 days before the final payment is due.
That figure increases to 50 per cent within 90 days prior to the final payment due date.
Under the Layby Sales Act, sellers are entitled to charge for their costs relating specifically to the sale of the goods but not the wholesale price of the items.
A Chrisco spokeswoman responded saying the company had not seen any details on the pending charges so would not comment on them.
She said Chrisco's cancellation policy related to the costs the company incurred, and the percentage of customers who cancelled their layby contracts was "very small".
Chrisco worked with customers to allow them to retain their order at a lesser amount if they needed to.
"And we believe it complies fully with all aspects of New Zealand law, and that we treat our customers fairly and properly," she said.
If the company is found guilty, it could face a maximum fine of $200,000.
Wanganui Budget Services advisor Sandy Fage said she was pleased that the Commerce Commission was taking action against the fees.
Layby hamper schemes such as Chrisco had their place in the market, for those who could afford to pay for the luxury of having their Christmas shopping delivered to their door without having to brave the supermarket queues themselves.
But for people on a low income, or anyone whose financial situation might change suddenly and they have to cancel, it's not good value, she said.
"It seems like a good deal, especially for those that struggle this year and don't want to do it again next year."
She said various investigations had found Christmas hampers were not as cost effective as they could be, and often the same items included in the hamper could be bought at the supermarket for less.
A 2008 Herald on Sunday investigation, had found that goods purchased in a Chrisco hamper cost 24 per cent to 38 per cent more than if they were bought in the supermarket.
Ms Fage said she had dealt with a few clients who had suddenly had to cancel their hampers in the past so she recommends the local supermarket Christmas clubs.
It was all about trying to find the best value for money for people on low incomes, she said.
Whanganui People's Centre Fieldworker Gary Reid said they also suggested clients use supermarket clubs.
"We do see some people on Chrisco, I always say join a Christmas club, it's better value for money. People can't always afford the packages."
A spokeswoman for the Commerce Commission yesterday said the charges against Chrisco were yet to be laid.