Online reviews, social media and group buying – the way in which small firms do business and interact with consumers is changing.
Small businesses can keep ahead of the game by following five steps to competing fairly online.
- When handling returns and ensuring safe products, online retailers have the same obligations as bricks-and-mortar traders.
Consumer guarantee laws provide shoppers with rights if a product doesn’t work or doesn’t perform as expected. If the problem is major, consumers can choose a refund or replacement. If the problem is minor, the retailer can choose to repair the item. ‘No refunds’statements are illegal because there are certain circumstances where consumers are entitled to a refund. Online or offline, these rights cannot be excluded, modified or limited.
Every business trading online needs to be mindful of mandatory product-safety standards and bans. Small firms also have an important role to play in reporting product-related accidents and injuries. If you become aware of a death, serious injury or illness associated with a product you supply, you must report it to the ACCC within 48 hours.
- Statements and testimonials used on websites must be truthful and accurate.
With consumers increasingly researching and shopping online, the ACCC is particularly concerned about fake online testimonials and reviews. Fake testimonials can mislead consumers and give an unfair advantage to unscrupulous traders.
Businesses using social media also have a responsibility to ensure content on their pages is accurate, irrespective of who put it there. As a business you can be held responsible for posts or public comments made by others on your social-media pages which are false or likely to mislead or deceive consumers.
- Group buying can be friend or foe. Weigh up the demands and risks before signing-up.
Group-buying websites negotiate deals with local businesses and promise to promote their goods and services, to deliver new customers, in exchange for big discounts. This can be a good deal for some – but the discount model may not suit all traders. Consider getting independent advice before entering into an agreement. Think about the potential demand created and ensure you can deliver as advertised. Make sure the terms and conditions of sale are fair and clearly expressed to consumers.
Sign up to the ACCC’s SCAMwatch radar to receive alerts about new and emerging scams.
- Set your own prices and know where you stand in dealing with suppliers.
A supplier cannot stop a reseller from advertising, displaying or selling their goods below a specified price. There are rules relating to resale price maintenance which make it illegal for suppliers to pressure a business to charge their recommended retail price or any other set price. The ACCC will take a close look at conduct that may impede emerging competition between online traders or limit the ability of small businesses to effectively compete online.
- Beware of online shopping scams – sellers are targets too.
As a sign of the times, the ACCC’s figures showed a 65% increase in the number of people reporting online shopping and auction scams in 2012.
Overpayment scams are a classic example. Look out for consumers who pay above and beyond the agreed price and then ask you to refund the difference. The original payment is likely to bounce and the scammer pockets the refunded amount. Sign up to the ACCC’s SCAMwatch radar to receive alerts about new and emerging scams.
More information:
- call the ACCC’s small-business helpline on 1300 302 021
- check out the free online education program to help you learn more about your rights and obligations at ccaeducationprograms.org
Dr Michael Schaper, Deputy Chairman, Australian Competition & Consumer Commission
