Group buying code - no added consumer protection

Stephen Withers
Wednesday, 02 November 2011 09:43

IT Industry - Development

 

The group buying industry has come up with a code of conduct, but it doesn't appear to offer consumers much that they're not already entitled to by law.

 

While group buying schemes have taken off in Australian, there have been various concerns about the way they operate. Among the complaints have been allegations that some merchants have offered more coupons than they could possibly service before the coupons expire.

 

ADMA (Australian Direct Marketing Association) and AIMA (Australian Interactive and Media Association) have now published the Australian Group Buying Code of Conduct. While the code is voluntary, it has been backed by Cudo, Groupon, Jump On It, LivingSocial, Ouffer, OurDeal, Scoopon and Spreets.

AIMA CEO John Butterworth said, "Australian consumers are clearly enthusiastic about group buying deals. As a comparatively new industry it's essential that we move as quickly as possible to implement measures that make group buying a rewarding and successful experience for consumers, merchants and group buying platforms alike. The Code has been developed by the industry associations to help establish group buying as a mainstream channel."

From a consumer perspective, it is important to note that the code is more concerned with processes than outcomes. For example, it is silent on the question of whether you should get a refund if the merchant goes into liquidation, fails to provide the goods or services, or if the goods and services are not as advertised. It merely states that the group buying operator should have a clear, unambiguous, and clearly displayed refund policy that covers those three situations.

The code does give dissatisfied consumers someone they can complain to, but even if a complaint is upheld and (for example) a refund ordered, a group buying operator can withdraw from the scheme at any time. In that case, all that can be done is a referral "to the appropriate regulatory authority for further action."

The code is available here [PDF]. To a large extent, it could be summarised as 'group buying operators should comply with any relevant legislation.'