Saturday, January 22, 2011

Shopping Online and Consumer Complaints

Jack Dikian
January 2011

Leading up to Christmas 2010 much of the news concerning online shopping was associated with whether the Federal Government should place a good and services tax (GST) on products bought from overseas online retailers. And some local retailers claimed that they are at an "unfair disadvantage" when competing against goods bought from overseas.

Another aspect associated with our increasing tendency to shop online is the increasing rate of shopping complaints about online purchases. In fact, we (Australians) made the second-highest number of complaints about online purchases only after the US.

The most common problem reported was a failure to receive a purchased product, followed by misrepresentation of products. According to Michael Callaghan, a lecturer in consumer behaviour at Deakin University, Australians expected web retailers to be more reliable than early embracers of online shopping. "The tolerance of consumers now to accept problems is a lot less than a few years ago. The perceived risk [of online shopping] has gone down … and the less risk you perceive the more likely you'll seek redress if problems occur.''

Only a few years ago, NSW Fair Trading Minister, Linda Burney, urged consumers to proceed with caution when shopping online. The warning came after figures from the Office of Fair Trading revealed a 22% increase in complaints about online trading in the past year (2006) to almost 1,500.

Almost half of the complaints received related to the non or partial delivery of the goods, faults or damage, or the product not matching the description, and one in five complaints related directly to refunds, overcharging and other money related issues.

A number of agencies have recently launched programmes, including online sites to help deliver better consumer protection world-wide, providing shoppers with essential information to avoid scams, shop safely online, and how to lodge a complaint for cross-border disputes.

These agencies are sharing information, cooperating on initiatives and amalgamating information to combat cross border scams, and other equally less satisfying practices.

Some examples include:

International Consumer Protection Enforcement Network (ICPEN), provides consumers with essential information including how to avoid scams and shop safely online., is an initiative of the International Consumer Protection and Enforcement Network to monitor fraud in cross-border online purchases. The Australian Competition & Consumer Commission promotes competition and fair trade in the market place to benefit consumers, businesses and the community, international consumer issues.

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