SINGAPORE – Refunds and free returns may be the norm for online shoppers after Singapore’s consumer watchdog rolled out a new dispute management framework for e-marketplaces.
Lazada, an e-commerce platform, was the first to ink an agreement with the Consumers Association of Singapore (Case) to adopt the Standard Dispute Management Framework for E-marketplaces.
Online shoppers on Lazada will have their complaints processed within seven days, among other things.
The framework covers best practices in verifying merchants’ identities, clear communication with consumers, timely dispute resolution, as well as clear exchange and refund policies, said Trade and Industry Minister Gan Kim Yong on Friday (Nov 26).
“The framework will help consumers resolve disputes quickly and efficiently,” he said.
“By adopting the framework, e-commerce marketplaces will be able to engender greater trust and confidence in their platforms, which is in turn good for business.”
Mr Gan was speaking at the Ritz-Carlton, Millenia Singapore hotel during a conference on building trust and strengthening consumer protection in the digital age.
The conference was organised by Case.
The minister noted that e-commerce sales are projected to hit more than $10 billion this year and grow more than 25 per cent by 2026.
The rapid growth of online shopping, accelerated by the Covid-19 pandemic, has also led to a corresponding increase in the number of complaints related to online transactions handled by Case, Mr Gan noted.
Case president Melvin Yong said the watchdog had received more than 900 complaints relating to online purchases in the first half of 2021.
He added that many more consumers would likely have resolved their disputes directly with sellers.
The varying scopes and service levels in e-marketplaces’ dispute resolution processes has caused “tremendous frustration” to consumers in numerous cases, and this is why the new framework is needed, said Mr Yong, who is also MP for Radin Mas SMC.
Mr Yong said the memorandum of understanding inked by Lazada and Case during the conference is the first agreement of its kind in the world between a national consumer association and a major e-marketplace.
In the coming months, Case will engage with other industry players to encourage them to adopt the framework.
The framework states that e-marketplaces should verify the identity of its merchants, including details like business-registered names, identification numbers and addresses.
They should also provide consumers a way of assessing the merchants’ reliability, by providing a rating score for example.
Consumer complaints should be processed by the e-marketplace and merchant within seven days and disputes should be concluded “within a reasonable time”.
However, this may be extended where appropriate, such as in cases where there is suspicion of fraud by either buyer or seller.
E-marketplaces should ensure their merchants provide consumers with regular updates on their complaints and provide clear justifications when closing disputes.
The framework also states that e-marketplaces should have an exchange and return policy, and ensure merchants comply with it.
The policy should include requiring the merchant to complete the delivery of goods and services within a certain time frame and offer an automatic refund otherwise.
Consumers should not have to pay for postage fees or other costs when returning incorrect or defective products.
Payment options that keep consumers’ funds secure should be provided by the e-marketplace to ensure refunds remain possible in instances of disputes.
E-marketplaces should also clearly document the details of correspondences between buyers and sellers, and work with consumers to resolve the disputes in “an economically feasible manner”.
During the conference on Friday, which marked Case’s 50 anniversary, three individuals and two organisations were recognised for their contributions to protecting consumers’ interests.
Past Case presidents Mr Lim Biow Chuan and Mr Yeo Guat Kwang, as well as Case volunteer Mr Richard Lim, received the Special Case50 Meritorious Award.
The Direct Selling Association of Singapore and NTUC FairPrice Cooperative received the Special Case50 Commendation Award.