As South Africa’s e-commerce sector enters a new era of growth and maturity, the National Consumer Commission (NCC) is moving to tackle several challenges consumers face when making online purchases.
These include misleading advertising, outdated laws, refund disputes, delivery challenges, the selling of counterfeit products, insufficient data protection and privacy for online transactions, and concerns related to third-party sellers in online marketplaces.
This is according to a position paper released by the NCC, in collaboration with the Consumer Goods and Services Ombud (CGSO). The report identifies significant gaps in oversight, enforcement and accountability, leaving consumers exposed to unfair business practices within the local e-commerce sector.
Published to coincide with World Consumer Rights Day on 15 March, the report examines how online retail has transformed consumer behaviour, while exposing structural shortcomings in SA’s consumer protection regime.
According to the report, although existing legislation − such as the Consumer Protection Act and the Electronic Communications and Transactions Act − provides a foundation for consumer rights, gaps remain when these laws are applied to digital platforms and cross-border e-commerce.
Through the report, the NCC and CGSO aim to drive legislative reform by strengthening key laws, closing accountability gaps for digital platforms, and aligning local regulations with international best practice.
Mounting complaints
The increasing number of consumer complaints received by the CGSO on a monthly basis highlights systemic gaps, according to the report.
Online shopping disputes have become a persistent issue in the consumer complaints landscape, with many relating to misleading product descriptions, non-delivery of goods, damaged items, delayed shipments and refund disputes, particularly where purchases involve third-party sellers operating on large digital marketplaces.
Queen Munyai, CEO of the CGSO, says the report reflects growing concern that the legal framework governing consumer rights has not evolved fast enough to keep pace with digital commerce.
“For the last five years, e-commerce has accounted for more than 20% of all consumer complaints received by the CGSO. These complaints range from misleading advertising, to non-delivery and late delivery, damaged goods, unsafe goods, non-compliant return policies and refunds that never materialise,” Munyai notes.
“Counterfeit products sold through third-party sellers on major platforms are also a recurring problem. Each of these issues contravenes consumer rights and highlights the growing gap between the protections consumers expect and the remedies that are currently available.”
The report also highlights enforcement challenges that limit the ability of regulatory bodies to resolve disputes effectively. While the CGSO plays an important mediation role in consumer disputes, it does not have the authority to enforce its rulings, meaning some businesses can ignore recommendations without facing immediate consequences, it states.
Munyai adds this limitation often leaves consumers with few practical options when suppliers refuse to cooperate.
“As a mediation body, we have no power to enforce our recommendations. If a vendor or supplier refuses to engage with us or rejects our recommendation, the consumer is left with limited alternatives, such as escalating the matter to the NCC or pursuing a formal legal route,” she notes.
“That legal process can be costly and time-consuming, often taking years to resolve. In addition, our mandate is limited to the consumer goods and services sector, meaning complaints involving other industries must be referred to separate regulators, creating a fragmented system that can allow cases to fall through the cracks.”
Enforcing accountability
Another key concern identified in the report is the limited accountability of online marketplaces that host third-party sellers.
Currently, many digital platforms argue that they merely facilitate transactions between buyers and independent vendors − an arrangement that allows them to shift responsibility for complaints back to the seller.
The NCC points out that this model leaves consumers helpless when problems arise.
Hardin Ratshisusu, acting commissioner of the NCC, says the digital marketplace has created new vulnerabilities that regulators must address through stronger oversight and collaboration.
“The digital marketplace has transformed how South Africans shop, but it has also created new and complex vulnerabilities that require a coordinated response from regulators.
“The NCC’s position is clear: platforms that profit from facilitating transactions between sellers and South African consumers cannot simply disclaim responsibility when those consumers are harmed. This report is a call for government, industry and online platforms to close that accountability gap.”
Legislative reforms
To address these shortcomings, the report proposes several reforms aimed at strengthening consumer protection in the online environment.
These include amendments to the Consumer Protection Act and the Electronic Communications and Transactions Act to clarify consumer rights around cooling-off periods, return costs and online product descriptions.
Another proposal is to introduce joint liability rules for platforms hosting third-party sellers – a move that would align SA with international regulatory developments, where online marketplaces are increasingly held responsible for the products sold on their platforms.
The report further recommends the creation of a centralised complaints system to improve coordination between regulators and ombuds offices, addressing the fragmented nature of SA’s consumer protection framework.
It also proposes exploring a rapid product safety alert mechanism similar to systems used in other jurisdictions, enabling authorities to quickly identify and remove hazardous products from the market.
While the recommendations aim to close regulatory gaps, the NCC and CGSO emphasise that improving consumer protection will require cooperation between government, industry and digital platforms.
Alastair Tempest, CEO of the Ecommerce Forum of South Africa, tells ITWeb that while the joint report focuses heavily on regulatory reform, the real challenge lies just as much in how those rules are implemented.
He points out that weaknesses in enforcement structures, rather than gaps in legislation alone, are allowing consumer issues in e-commerce to persist.
“The CGSO does a fantastic job in addressing consumer complaints. Many are addressed quickly and to everyone’s satisfaction,” Tempest notes. “Often errors occur due to failures to follow basic e-commerce training, like ensuring there are sufficient stocks, or due to payment issues which bring in other parties and can be difficult to solve.
“We recognise that some SMEs do not know the regulations they are supposed to apply, and there is an urgent need to explain the rules in layman’s language.”
The most severe category of complaints, he says, involves organised scammers who operate with the sole intention of defrauding consumers.
“The CGSO has identified several repeat scammers, but the problem is that they set up a website, scam users and disappear, only to reappear a few weeks later under a different name,” he explains.
“The key issue here is speed, and that is exactly what is not available presently beyond the CGSO. The application of the law is perceived by complainants to be slow and ponderous.”
A solution favoured by some would be to move the NCC into the Competition Commission. “This is how many countries deal with consumer complaints. The Competition Commission is usually well-funded, well-staffed with lawyers and their rulings enforce punitive judgements,” Tempest points out.
Share