Online retailers in South Africa are facing a problem

A sharp increase in consumer complaints about online shopping in 2020-21 indicates the inability of many retailers to cope with the increase in demand during the Covid-19 pandemic, according to law firm Webber Wentzel.

The Consumer Protection Act (CPA) empowers the Consumer Goods and Services Ombudsman (the Ombudsman) to mediate disputes between consumers and companies that provide goods and services. The Ombudsman was created to ensure that businesses treat consumers fairly and equitably.

In successful cases, the ombudsman can secure refunds to customers from suppliers. The consumer can also take the matter to the National Consumer Commission, which is authorized to conduct a formal investigation of a complaint.

In addition, the CPA allows a third party, who is not affected but is acting in the public interest, to bring legal proceedings in the national consumer court or tribunal for infringement of a consumer’s right.

The ombudsman studies trends in the consumer market and identifies the sectors responsible for the largest number of consumer complaints. Recently, the ombudsman has reported a sharp increase in consumer complaints about online shopping.

In March 2020, complaints about online shopping made up only 6% of the total complaints received by the ombudsman, but that number rose sharply to 27% of all complaints in fiscal year 2021.

The Covid-19 pandemic has led to an unprecedented demand for online goods and services by consumers in South Africa. Due to the unpredictable nature of the increase in demand, many companies have struggled to adapt. In particular, consumers complain that online stores fail to deliver goods and services on time and in some cases, do not deliver at all.

An additional category of complaints an ombudsman receives relates to fraudulent online businesses. Anyone can set up an online business through many social media platforms with little or no scrutiny. As a result, consumer reliance on online shopping has created an easy way to create fake online businesses that accept payments without the intention of delivering goods or services.

The CPA states that the consumer has the right to receive merchandise that is in good working order and free from any defects. It states that the supplier is responsible for delivering the goods on the agreed date and time and, if this is not possible, within a reasonable time after the completion of the transaction.

According to Article 46 of the Electronic Transactions and Communications Act, if the goods are not available online, the supplier must notify the consumer and refund any payments within 30 days of the notification.

Consumers have many avenues in the CPA to enforce their rights and they are increasingly exercising these rights. Even online companies that operate within the law may implement certain practices that fall short of the level expected of suppliers in the CPA.

Businesses should be aware of these risks and take steps to mitigate them. They should also remember that while it is easy to set up an online store, it is also easy to suffer reputation damage from bad and unfair business practices.

  • Written by Wendy Tempedza, Partner and Kasim Jani, Nominated Attorney of Weber Wenzel

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