Online shoppers in Australia: dealing with problems

Although the Internet is a convenient platform to conduct commercial transactions, consumers are disadvantaged in the online marketplace due to insufficient information about goods and services as well as business and transaction process, lack of access to redress and several other problems. The number of complaints regarding online transactions increased in Australia from 2001 to 2005, and the number of Internet‐fraud related complaints reported to Consumer Sentinel (USA ) also increased from 2003 to 2006. This, in turn, has undermined consumer trust and impeded the growth of e‐retailing as well as added to the fear among e‐consumers of falling prey to online fraud. In spite of this, the nature and effectiveness of e‐consumer protection has not been adequately studied, notwithstanding extensive research into other aspects of e‐retailing. This article examines (i) the level of awareness of the respondents in the survey in Australia of the current policy framework for addressing consumer protection about online shopping in terms of redress; and (ii) the behaviour of the two groups of respondents in this survey who have and have not encountered problems with online purchases. The findings suggest that most respondents are not aware of the following issues, namely (i) which organizations are involved in e‐consumer protection; (ii) government regulations and guidelines; (iii) industry codes of conduct; (iv) self‐regulatory approaches adopted by business; and (v) the activities of consumer associations to protect consumers in the online marketplace. The findings also show that most respondents would seek redress if they were unhappy with their online purchases and if they knew how to proceed, and that most of them would settle disputes directly with e‐retailers. Also, online shoppers who had encountered problems were more likely to continue purchasing via the Internet than online shoppers who had not encountered any problems. This suggests that respondents find that the benefits offered by e‐retailing outweigh the risks associated with it.