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NZ web retailers not all user friendly

19 March 2001 Media Statement

NZ web retailers not all user friendly

"Many New Zealand web retailers are not providing enough information to safeguard consumer rights," said Acting Consumer Affairs Minister Jim Anderton today following the release of results of a Ministry of Consumer Affairs sweep on retail web sites. The sweep of 66 sites was part of an international sweep in 19 countries promoted by the OECD.

"It is a concern that New Zealand, a country of early adapters and high internet use, was somewhere in the middle of the list of countries for good consumer practice. There were too many other countries with higher proportions of sites with basic consumer protections, and New Zealand web retailers should be doing better," said Jim Anderton.

"The Government has provided a model code and guidelines on what information should be provided by web retailers and in many cases this is not being met. Nearly half of New Zealand book, CD, travel and clothing sites do not have information on returns and refunds on their sites. Thirty-eight percent didn't provide a physical address, and fifteen per cent didn't have a phone number," said Jim Anderton.

"Only half the sites carried a privacy policy on the protection of the personal details of customers," said Jim Anderton.

"It is also concerning that seventeen percent of NZ web retailers don't list the costs of postage and packaging separately, something that most customers would expect," said Jim Anderton.

Some web retailers had followed up the sweep by asking what they need to do to meet the code and there has been an improvement since a similar sweep in 1999. The Ministry of Consumer Affairs will revisit surveyed sites to monitor compliance.

The businesses who owned the sites visited were contacted and directed to the model code on the Ministry of Consumer Affairs website.

http://www.consumer-ministry.govt.nz/Model_Code.html


International Marketing Supervision Network
International Internet Sweep Day

15 February 2001

New Zealand results from Ministry of Consumer Affairs


Task
To survey New Zealand websites engaging in selling goods or services to consumers, and mark them against a set of 10 criteria. This sweep was similar to the sweep conducted in October 1999 when 43 sites were surveyed. As part of this sweep, all 43 sites visited in 1999 were re-visited and surveyed against the 1999 criteria.

Aim
To improve consumer protection information disclosure on websites. Inform New Zealand website operators on the OECD ecommerce guidelines, and introduce them to the New Zealand Model Code for Consumer Protection in Electronic Commerce.

Organisation of sweep

The sweep is part of e-commerce initiatives undertaken by the International Marketing Supervision network to which the Ministry of Consumer Affairs is a member. The 2001 sweep is the fifth international sweep day that the Ministry has taken part in. Previous sweeps:1997 - get rich quick schemes,1998 - health claims, 1999 - ecommerce shopping sites, 2000 - get rich quick schemes.

The sweep was coordinated by the Australian Consumer and Competition Commission. The international results are attached.

Type of sites visited

Websites selling the following product ranges were visited:

Books
CDS
Souvenirs
Gifts
Food and Wine
Clothing
Accessories (jewellery, footwear)
Travel

Sweep Criteria

The sites were marked with Yes/No answers against the following criteria. The sites were not graded as to the quality of the information but whether the information was present. If the information could not be found with a reasonable search of the site (under Terms of trade for refund policies, or About Us or Contact Us for address information) then the site was given a No against that criterion.

Contact details
Q1 Physical address of the business
Yes 43 66.15%
No 22 37.85%

Q2 Email address
Yes 64 98.46%
No 1* (*had to complete feedback form to contact website by email. No specific email address supplied)

Q3 Contact telephone number
Yes 50 76.92%
No 15 33.08%

Information about price
Q4 Is the cost of the purchase itemised, the postage and packaging costs listed separately ?
Yes 54 83.08%
No 11 16.92%

Q5 Currency of prices disclosed?
Yes 48 73.85%
No 17 26.15%


Sales restrictions disclosed
Q6 Are there geographic restrictions - eg, do not deliver or sell outside New Zealand ?
Yes 29 44.62%
No 36 55.38%

Q7 Is parental/guardian approval required, or age restrictions for purchasing disclosed ?
Yes 9 13.85%
No 56 86.15%

Return policies
Q8 Does the website provide a statement of policy on returns, exchanges or refunds?
Yes 36 55.38%
No 29 44.62%

Q9 If the answer to Q8 is Yes, does the policy allow goods to be returned or exchanged?
Yes 34 52.31%
No 31 47.69%


Privacy
Q10 Does the website have a policy of any kind?
Yes 33 50.77%
No 32 49.23%


Question statistics

Total number of websites visited 65 (not the Australian compiled international results show 66 sites visited by New Zealand). Given the numbers of sites visited this does not effect the percentage statistics.

Total sites replying to our
email message advising that
their website had been surveyed 6

Sites responding to the email were sent a copy of the Guide to the Model Code, advised what areas they could improve on, and most responded that they would take this information "on board".

Scores Number of sites

10/10 2
9/10 4
8/10 10
7/10 13
6/10 16
5/10 10
4/10 3
3/10 6
2/10 0
1/10 1
Total 65


General comments

Many sites, while scoring highly, did not disclose information in a place that it could be easily found. Some sites had important information on the last page "clicked on " when carrying out a purchase rather than having the information on the home page, or a well signposted link from the home page. The most likely to be on the checkout pages were return policies, privacy statements (often within security statements) and information about additional costs.

The quality of privacy statements widely varied from "your payment information will held securely and only used for the purposes of your purchase" to information that advised about the rules of the Privacy Act.

1999 sweep sites revisited

1999 questions

Physical address; email and phone for business; itemisation of costs; * security of payment; applicable currency; age or geographic restrictions, information on return policies; information on lodging a complaint; jurisdiction applying to transaction (which country's laws will apply); privacy policy.

Comments

On revisiting the 43 sites surveyed in 1999 39 were still in existence. Of these sites, only 31 were still selling goods or services from the site but 17 of these had improved their information disclosure since 1999. The majority of the improvements were for providing a privacy and/or security statement and more complete address information. In 1999 the international sweep results showed that only 25% of sites carried a privacy statement. The NZ sweep figures for 2001 show an improvement to 50% of sites visited.


International Results provided by the Australian Consumer and Competition Bureau
Number of sites evaluated
Australia 229
New Zealand 66
Japan 1616
Korea 125
USA 93
Norway 62
Denmark 37
Portugal 41
Austria 33
Belgium 46
Finland 18
UK 667
Sweden 34
Switzerland 30
Germany Still waiting on results
Canada 62
Poland 22
Mexico 12
Hungary 21
TOTAL 3,271
Categories of Sites

Book/ Magazine CD/ Software Travel Clothing Other
Australia 60 45 18 19 87
New Zealand 11 0 10 8 37
Japan 56 37 76 484 963
Korea 39 53 37 26 25
USA 15 20 11 15 32
Norway 11 10 0 5 36
Denmark 6 7 5 7 12
Portugal 10 6 5 12 8
Austria 12 4 9 4 4
Belgium 6 5 0 7 28
Finland 5 4 5 4 0
UK 154 131 75 115 192
Sweden 5 5 7 5 12
Switzerland 6 6 6 5 7
Germany 0 0 0 0 0
Canada 10 7 9 5 31
Poland 5 4 5 5 5
Mexico 3 5 2 1 1
Hungary 4 3 4 1 9
TOTALS 418 352 284 728 1489

Global Results

75.48% of sites disclosed their physical address
77.59% of sites provided an e-mail address
76.73% of sites provided a telephone number
69.49% of sites gave an itemised cost for goods or services
84.96% of sites specified the applicable currency
45.67% of sites mentioned geographic restrictions on purchases
38.55% of sites mentioned parental approval or minimum age requirements
55.89% of sites provided a policy on returns, exchange and refunds
54.29% of sites allowed for returns, exchanges and refunds
42.24% of sites had a privacy policy of some kind

The lowest compliance over the whole world was with restrictions on purchases such as parental approval, minimum age requirements or geographic limitations. In some cases, the business may be quite willing and able to sell goods or services to any person of any age in any country. Some sites quoted a range of delivery costs based on the distance from the country in which they were based, and seemed to have no geographic limitations. Others had obvious limitations, but were silent on the issue. One site had no minimum age requirement, and was selling crossbows and other weapons, which were required by local law to be sold only to persons over the age of 18 years who held the appropriate license.

The highest global compliance was with the provision of contact details for the business – physical address, e-mail address and telephone number. In addition to being important for enforcement activities, these details allow for consumers to approach businesses with complaints and inquiries. This level of approachability is likely to improve businesses’ performance in customer satisfaction, and bolster consumer confidence in the on-line shopping experience generally.

Areas which may be targeted globally for improvement would include returns, exchange and refund policies and privacy policies. In those cases where a returns, exchange and refunds policy was displayed on the site, a staggering 97.15 % made allowance for returns, exchanges and refunds. Seemingly, the immediate challenge for consumer protection agencies around the world is to increase the proportion of businesses that formulate a policy and put it on the site. Complex analysis of the policies themselves, although equally important, may not be as urgent.

Privacy is an incredibly complex area, with different political sensitivities in each jurisdiction. Only 42.24 % of sites examined had a privacy policy of any kind, and no real analysis of these policies was conducted. Many of them may be unacceptable in some jurisdictions. Clearly this remains an area for ongoing work for all agencies.
Raw Data

% YES RESPONSES BY COUNTRY
Qn1 Qn2 Qn3 Qn4 Qn5 Qn6 Qn7 Qn8 Qn9 Qn10
Australia 80.8 88.6 86.5 52 46.7 13.1 3.9 32.8 30.1 28.4
N Zealand 65.2 95.5 77.3 81.8 72.7 43.9 15.2 54.5 51.5 48.5
Japan 68.4 68.4 68.4 68.4 100 68.4 68.4 68.4 68.4 #####
Korea 92.8 91.2 98.4 84 90.4 34.4 24 76.8 76.8 77.6
USA 87.1 87.1 88.2 74.2 38.7 60.2 15.1 76.3 75.3 80.6
Norway 80.6 96.8 91.9 71 0 1.6 6.5 62.9 54.8 27.4
Denmark 94.6 97.3 89.2 83.8 89.2 13.5 8.1 67.6 67.6 18.9
Portugal 78 100 87.8 80.5 95.1 12.2 4.9 34.1 34.1 36.6
Austria 87.9 93.9 87.9 57.6 54.5 9.1 0 30.3 18.2 57.6
Belgium 87 78.3 89.1 73.9 93.5 41.3 0 58.7 56.5 41.3
Finland 94.4 94.4 94.4 22.2 0 27.8 33.3 72.2 66.7 38.9
UK 87.6 87.6 85.6 77.4 87.1 19.2 8.2 32.1 27.9 39.9
Sweden 91.2 97.1 100 97.1 100 55.9 41.2 97.1 88.2 52.9
Switzerland 93.3 90 93.3 83.3 100 56.7 10 70 70 40
Germany Not supplied
Canada 80.6 91.9 88.7 71 62.9 16.1 4.8 45.2 45.2 48.4
Poland 86.4 100 95.4 90.9 59.1 9.1 9.1 68.2 68.2 27.3
Mexico 83.3 100 100 50 66.7 8.3 0 25 25 25
Hungary 66.7 76.2 81 57.1 100 76.2 4.8 14.3 9.5 52.4


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