Online retailers in South Africa have a problem


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

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

In successful cases, the ombudsperson can assure consumers refunds from suppliers. The consumer can also submit a case to the National Consumer Commission, which has the power to initiate a formal investigation into a complaint.

In addition, the CPA allows a third party, who is not affected but is acting in the public interest, to initiate legal proceedings in a court or the National Consumer Court for a breach of a consumer law.

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

In March 2020, complaints related to online shopping still accounted for only 6% of the total number of complaints received by the Ombud, but this figure rose sharply to 27% of the total number of complaints in the 2021 financial year.

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

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An additional category of complaints received by the ombudsman relates to fraudulent online companies. Anyone can set up an online business through various social media platforms with little to no vetting. As a result, consumers’ reliance on online shopping has created an easy avenue for creating fake online businesses that accept payments with no intention of providing the goods or services.

The CPA states that a consumer has the right to receive goods that are in good condition and free from defects. It states that a supplier is responsible for delivering goods on the agreed date and time and, if that is not feasible, within a reasonable time after the conclusion of the transaction.

In terms of Section 46 of the Electronic and Communications and Transactions Act, if online goods are not available, the supplier must notify the consumer and refund all payments within 30 days of notification.

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Consumers have various options in the CPA to enforce their rights and are increasingly exercising these rights. Even online companies operating within the law may employ certain practices that do not meet the standard expected from suppliers in the CPA.

Businesses should be aware of this risk and take steps to mitigate it. They should also remember that while setting up an online store is easy, it can just as easily be reputational damage from bad and unfair business practices.

  • By Wendy Tembedza, Partner & Qaasim Ganey, Attorney Candidate for Webber Wentzel

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