Opinion
Online businesses owe it to their customers to do better
The Herald's View
EditorialThe retail experience was once a largely tangible and immediate. You entered a physical store, paid cash and received your goods in real time, leaving the consumer in little doubt about the quality, look and amount of product received.
The advent of e-commerce has changed that experience. A customer now typically pays money to an online retailer whom they must trust is acting in good faith and will ensure the purchased products are provided in the advertised condition and a timely fashion.
But, as we report today, more than half of problematic transactions are now associated with ecommerce, with no-show purchases a particular pain point. The NSW Office of Fair Trading has been receiving a growing number of complaints about delayed or missing retail orders for the past few years.
The timely delivery of online goods is a pain point for many consumers.Credit: Getty
Consumer rights when online shopping are becoming an increasing area of concern to advocates and regulators with the mushrooming of complaints highlighting the weaknesses in our existing system of consumer guarantees.
These guarantees, enshrined in Australian Consumer Law, dictate that businesses must meet a set of basic consumer rights when they sell products or services. These include the product matching the description, being of acceptable quality as well as ensuring the delivery of goods within either a specified or reasonable timeframe.
Currently, if businesses fail to meet a consumer guarantee they are only obliged to offer a remedy, such as a refund and the onus is on the consumer to complain and trigger the enforcement of the regulations when an online retailer fails them.
This power imbalance, coupled with the growing incidence of consumer guarantees failing customers, suggests the existing regulatory framework is ripe for review.
Australian Competition and Consumer Commission (ACCC) chair Gina Cass-Gottlieb has identified improving industry compliance with consumer guarantees and targeting misconduct by retailers in connection with delivery timeframes as among the 2024-25 enforcement and compliance priorities for the commission.
In an address to the Committee for Economic Development of Australia (CEDA) in March she said consumer guarantees were the most complained about issue raised with the ACCC and with each state and territory consumer agency.
Significantly she said that while improving compliance with these guarantees was important, she signalled strengthening laws so that businesses incurred more significant penalties than just being required to offer a remedy such as a refund.
Strengthening laws would put Australia in step with the international community. The US, the United Kingdom, the European Union and Singapore all have tougher unfair trading prohibitions for business-to-consumer transactions.
Treasury has been exploring the question of reforming existing Australian Consumer Law to cover unfair trading practices, as small business and consumers increasingly interact with digital platforms.
While consultation is continuing, an initial statement released last year by Treasury highlighted the number of limits in existing law around the duty of businesses to disclose information about their practices and unconscionable conduct. It notes the current regulatory framework prevents the ACCC from asking for penalties from businesses that fail to meet consumer guarantees.
We are in the midst of a cost-of-living crisis. Household budgets are under pressure and it is not acceptable that goods and services that have been paid for are not provided in good shape and in a reasonable timeframe.
The onus on consumers to chase delinquent businesses, particularly those who do not have a physical presence, is unfair and the reputational impact on businesses who do deliver goods in a timely manner dents consumer confidence.
The Sun-Herald supports the idea of reform that sees the requirement for businesses to merely offer remedies to be replaced with stronger financial penalties to incentivise businesses to improve their practices and treat customers with respect.
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