When online sales go wrong

Buying goods online is a way of life for an increasing number of New Zealanders.

Rae Neild

However, the lack of face-to-face contact between retailer and consumer means that special attention must be paid to ensuring that full information is given to consumers, because they do not have the opportunity to inspect the goods before purchase, to ask questions or to check prices.

Where consumers are not given full information (or worse, are given wrong information), even the most reasonable of consumers are likely to complain. And in these days of social media, a problem can be immediately broadcast far and wide.

A speedy response is required in order for your retailer or manufacturer clients to reduce the risk of negative fallout, affecting not just the sales of the advertised products, but the brand strength of the retailer or manufacturer – not to mention your client’s customer service team being deluged with complaints!

It is critically important to have a toolkit of responses available so that we can assist our clients promptly. Time is of the essence.

Last year, several significant online sales disasters highlighted a range of different types of online sales problems.

Even though all of these involved pricing errors, they had different consequences, and indeed demonstrated different legal and practical issues.

Foremost amongst the publicised legal issues was the contractual status of the problem.

Interestingly, there was little public debate about this, even though a number of issues were raised, such as the status of the contract, whether a mistake defence was available and, if so, in what circumstances, and how the consumer could enforce the contract.

Further contractual issues were not discussed publicly, including offer and acceptance, when the contract was formed, and what terms were incorporated.

This last point indeed highlights the importance of practical advice to clients as to how to maximise the likelihood that key contractual terms will be incorporated.

Similarly, little attention was paid in the media to the customer’s perceptions of the contracting process in each case, or to other statutory rights which might well overlay the contractual rights.

An upcoming CPD webinar on Wednesday 10 August 2016 will put the spotlight on the legal issues surrounding online sales.

Several real cases will be dissected and potential mechanisms for dealing with the customer complaints will be outlined.

Rae Nield is a second-career lawyer who has always worked in the retail supply chain. Before heading to Law School at Auckland University in 1990, she had a career in information services, sales, marketing and general management. She switched to law after becoming involved in law reform issues during the GST reforms in the late 1980s, and continues this involvement.

Her academic specialisation is consumer law – her Master of Jurisprudence thesis on consumer warranty law (in New Zealand addressed by the Consumer Guarantees Act 1993) had the singular distinction of being stolen from desk copy a few years ago. Ms Nield advises clients in the supply chain on contractual, compliance and consumer interface issues.

For more details or to register for the upcoming webinar, please click here.

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