Framework launched to handle disputes in e-marketplaces

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.

E-commerce platform Lazada was the first to ink an agreement with the Consumers Association of Singapore (Case) to adopt the Standard Dispute Management Framework for E-marketplaces.

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 yesterday.

"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 organised by Case on building trust and strengthening consumer protection in the digital age.

He 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 led to a corresponding increase in the number of complaints related to online transactions handled by Case, Mr Gan said.

Case president Melvin Yong said the watchdog had received more than 900 complaints relating to online purchases in the first half of this year.

The varying scopes and service levels in e-marketplaces' dispute resolution processes have caused "tremendous frustration" to consumers in numerous cases, and this is why the new framework is needed, added Mr Yong, who is also MP for Radin Mas.

Mr Yong said the memorandum of understanding inked by Lazada and Case during the conference is the first 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 their merchants, including details like business-registered names, identification numbers and addresses.

They should also give 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 when there is suspicion of fraud by either buyer or seller, for example.

E-marketplaces should ensure their merchants give consumers regular updates on their complaints and provide clear justifications when closing disputes.

There should also be an exchange and return policy.

The policy should include requiring the merchant to complete the delivery of goods and services within a certain timeframe 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 correspondence between buyers and sellers, and work with consumers to resolve disputes in "an economically feasible manner".