A member of the public contacted authorities after witnessing the trio steal a gnome from an Oamaru property yesterday morning, police said.
A short time later, officers stopped a vehicle of interest and found three University of Otago students - and seven garden gnomes, Sergeant Wayne Brew said.
"Apparently, there is a custom where Otago students go out and obtain a gnome, normally by dishonest means, and 'liberate' it from someone's garden. They supposedly look after it for a year, protecting it from a rival university."
Asked if he believed their motive, Sgt Brew said "it seems quite plausible".
"There is a tradition down there that they go and take these gnomes whenever they go away."
Sgt Brew said the three were embarrassed about the thefts and were now being educated about a consequential custom.
"They probably understand the tradition of the New Zealand Police to actually arrest thieves, a long-standing tradition as well."
It was not uncommon for gnomes and garden ornaments to be reported missing, "and it would be amazing to see how many garden ornaments" ended up in the Dunedin student quarter, he observed.
Police did not condone the theft of garden ornaments, which "were quite sentimental pieces to those who own them", Sgt Brew said.
Three gnomes had been reunited with their grateful owners, but anyone still missing a garden gnome was urged to contact Oamaru police.
Two 18-year-old youths and a 19-year-old woman had been charged with theft and were likely to appear in the Oamaru District Court next week, Sgt Brew said.