Online retailers in South Africa are facing a problem

The spike in consumer complaints about online shopping in 2020-2021 reflects the inability of many retailers to cope with rising demand during the Covid-19 pandemic, law firm Webber Wentzel said.

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

In successful cases, the ombudsman can provide reimbursement to consumers from suppliers. The consumer can also apply to the National Consumer Protection Commission, which is authorized to initiate a formal investigation into the complaint.

In addition, the LPA allows a third party who is not affected but acts in the public interest to bring legal action in court or the National Consumer Protection Tribunal for consumer infringement.

The Ombudsman studies trends in the consumer market and identifies the sectors with the highest number of consumer complaints. Recently, the Ombudsman has reported a sharp increase in consumer complaints about online shopping.

In March 2020, complaints related to online shopping represented only 6% of the total complaints received by the Ombudsman, but in FY 2021, this figure has increased dramatically to 27% of the total complaints.

The Covid-19 pandemic has resulted in unprecedented demand for online goods and services from South African consumers. Due to the unexpected nature of the increase in demand, many businesses are struggling to keep up. In particular, consumers complain that online stores do not deliver goods and services on time, and in some cases do not deliver at all.

An additional category of complaints received by the Ombudsman concerns Internet fraud. Anyone can create an online business through various social media platforms with little or no verification. As a result, consumer addiction to online shopping has created an easy avenue for the creation of fake online businesses that accept payments with no intention of providing goods or services.

The CPA stipulates that the consumer has the right to receive the goods in good condition and without any defects. It provides that the supplier is responsible for delivering the goods at the agreed date and time and, if this is not possible, within a reasonable time after the conclusion of the transaction.

In accordance with Section 46 of the Electronics, Communications and Transactions Act, if online goods are not available, the supplier must notify the consumer and refund any payments within 30 days of notification.

Consumers have several options in the CPA to enforce their rights and are increasingly exercising those rights. Even online businesses operating within the law may have certain practices that fall short of the standard expected of vendors in the CPA.

Companies must be aware of this risk and take steps to mitigate it. They should also remember that while it’s easy to set up an online store, it’s just as easy to suffer reputation from bad and unfair business practices.

  • Wendy Tembedza, Partner, and Kaasim Gainey, Webber Wentzel Advocate Candidate

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