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As published by SBS News

With Christmas just around the corner more and more Australians are heading online to tick off their Christmas lists.  While online shopping brings a slew of benefits it can also be a confusing experience for consumers and business operators alike.

As the worlds of consumers and business operators collide online, it is important to remember that all of the rights and obligations that exist under the Australian Consumer Law (ACL) also apply to the online environment. Of practical importance to both consumers and business owners is the right for a consumer to receive a repair, replacement or refund for goods or services that violate the “consumer guarantees” contained in the ACL.

Repair, replace, refund
The “consumer guarantees” provide that products must be of acceptable quality, match any description or display model and be fit for any disclosed purpose. Repair facilities and spare parts must also be reasonably available for a reasonable period of time after the sale. If a product fails to meet these guarantees or any other express warranty the consumer is entitled to either have the product repaired, replaced or their money refunded.

If a product has a ‘major problem’ with it then the customer may elect between receiving a replacement product or a refund. Major problems include anything that makes a product unsafe, significantly different from the sample or description used to sell it, if the problem would have stopped the person buying it and if the product cannot perform as the business said it would. For more minor problems a business can elect to repair the product instead.

While the consumer guarantees may also apply to online businesses that operate outside of Australia, enforcing such rights can be significantly more difficult for consumers. Therefore, it is important that consumers take precautions to protect themselves from the potential pitfalls of online purchases. The Australian Competition and Consumer Commission (ACCC) have been particularly active in promoting safe online shopping practices including the publication of a Shop Smart Online video, which provides a number of tips for online shoppers.

It is also important for retailers to be aware that the consumer guarantees available under the ACL cannot be modified or excluded. Therefore, retailers that insist that all refunds must occur within a specified time period, or that the product must be in its original packaging to attract a refund, will be in contravention of Australian Law.

Social Media a Double-Edged sword
While the law applies to traditional bricks-and-mortar retailers and online retailers equally, the risks associated with non-compliance can be far greater in the online space. The importance of review sites such as Yelp and social media platforms such as Facebook and Twitter in driving internet traffic is well recognised. While these platforms provide business operators with promotional opportunities, they also allow customers to voice their experiences (positive and negative) with a business. Importantly for businesses though, social media is a two-way communication platform. This provides an opportunity for businesses to demonstrate excellent customer service in dealing with complaints and refund requests and to have this excellent service viewed by a company’s social media audience.

The stakes are high though because ineffective or mismanaged social media interaction by a company can lead to a backlash from the online community. Ultimately, businesses need to ensure they act in compliance with the ACL in their online dealings with customers to minimise the risks associated with social media interaction.

Online retail is here to stay. It is important that businesses and consumers are aware that the law follows them into the digital world and continues to provide the same protections available in more traditional bricks-and-mortar retail settings.