FRIDAY IN FOCUS
On-line shopping sites must do better
06-06-2003
by Andrew McLindon
Increasing numbers of people are buying on-line, but many e-tailers are failing to protect their rights and the Director of Consumer Affairs is not pleased.
Several years ago an "entrepreneur" in the West of Ireland tried to cash in on the craze for Beanie Baby toys by selling rare versions of the collectibles over the Internet. Orders and credit card payments flooded in from around the world, but the buyers never got their goods. They'd been had. Thankfully, the Director of Consumer Affairs and the Gardai apprehended the person. However, if you thought that e-tailers had wised up since then, you'd be wrong.
Although not engaged in such fraudulent behaviour, many Irish sites appear to be breaking the law by flouting national and EU consumer legislation, which could result in an already sceptical public completely turning its back on e-commerce.
According to a report released last week by the European Consumer Centre Network, several Irish e-tailers are guilty of failing to comply with direct selling directives, do not provide information on warranties, don't show terms and conditions before a person purchases, and one didn't even display its physical address.
The Network surveyed 15 Irish e-commerce sites including the likes of Houseofireland.com, Guinness-webstore.com, Buy4Now.ie/arnotts, and Clerys.ie, and the results were not re-assuring. Despite mounds of research stating that consumers aren't entirely comfortable shopping on-line, many of the 15 did little to put them at ease.
The report found, for instance, that 13 of the 15 did not comply with the national cooling-off period of seven days. The European Consumer Centre Network describes the consumer's right to withdraw from a contract within at least a week of receiving goods as the "corner stone" of the EU Distance Selling Directive.
Furthermore, none of the sites complied with national legislation in terms of informing consumers of the period for which an offer/price remains valid.
Most of them also appeared to have not fully informed their customers about their rights. Ten out of the 15 did not have information on warranties and nine of them made their users search for their terms and conditions.
Incredibly, nearly half did not display their terms and conditions before their customers went to purchase, and on 11 of the sites it was not possible to cancel an order.
In addition, six sites did not offer information on returns and only five carried a trustmark.
The study also looked at the cross-border on-line shopping experience for EU citizens and the results do not make good reading for the industry. Of the 114 orders made from Webtraders in the EU (including a few Irish sites, but not those mentioned above), only 75 resulted in a delivery. In other words, one in three orders never arrived. Moreover, the researchers attempted to return and get their money back on 57 of the items that did arrive. In 18 of those cases they did not receive any refund.
This survey was conducted at the end of 2002 so the sites in question may have got their act together in the meantime, but it's equally possible that these practices are continuing.
Certainly, these results could be a major blow to an industry that is only beginning to find its feet. Although business-to-consumer e-commerce was supposed to be the engine that drove Internet commerce, concerns among shoppers about sending their credit card details to businesses they couldn't physically see and buying goods they couldn't touch meant it has not reached its predicted heights.
However, there have been recent signs that consumers are getting more comfortable with the concept. In the US, for instance, Internet sales were up more than 25 percent in the first quarter of this year, while research firm Amarach has predicted that Irish people will spend EUR320 million on on-line purchases in 2003, which is up nearly one third on the year before.
All this though could be swept away if e-tailers continue to disregard their customers' rights, warned Tina Leonard, manager of the European Consumer Centre in Dublin. "The results of the survey paint a very sorry picture and could damage growing consumer confidence in e-commerce," she said at the report's launch.
Also at its launch was the Director of Consumer Affairs, Carmel Foley, and she was "not at all happy" with its findings. She said it was simply "not good enough" that sites were disregarding the regulations on important matters such as the seven day cooling off period. "There is no excuse for sites not to adhere to the Distance Selling Directive," she remarked. "I can't ignore this."
Foley went on to say that she will be investigating the Irish sites that were shown by the survey to be in breach of national and EU consumer legislation and directives. If found to be in breach, the sites will be given an opportunity to get their houses in order, but if they fail to do this or if "major breaches" are discovered, then prosecutions could follow, Foley said.
So what did the Irish Internet industry think of the results? Irene Gahan, chief executive of the Irish Internet Association (IIA), said she was "disappointed" by them, but not hugely surprised. "It tallies with my own shopping experience," she remarked. On foot of the survey, the IIA is to call for its members to "strictly adhere" to the Distance Selling Directive.
Roger Galligan, chief executive of one of Ireland's most established on-line retailers, Houseofireland.com, which was one of the 15 surveyed, said the report could act as a wake-up to the sector. "If it makes sites sit-up and take notice of things like the Distance Selling Directive and how to handle returns properly, then it will have been very worthwhile," commented Galligan, who added that Housofireland.com had performed well in the survey.
He believes that if sites want to be successful and gain the trust of users then they should operate as if they were selling to the US market. "Nearly all of our sales are to Americans and they are far more knowledgeable about their rights and, quite rightly, have very high expectations" he remarked. "If you can please and sell to them, then you should be able to please and sell to anybody."
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