The old saying, “The consumer is King” is making its way back to the South African business world. The end of March 2011 will usher in a new era for the consumer protection law in South Africa. Since 1989, there has not been a substantial review of the Act which has caused South Africa to lag behind. Due to lack of understanding of basic consumer rights, inadequate consumer voice and continuous exploitation of consumers, the Department of Trade and Industry has seen the need for a holistic overview of the South Africa Consumer Protection Regime. The Act remains one of the most debated topics on television and print media, especially among suppliers and government. Rosalind Lake, an associate at Deneys Reitz Attorneys says that suppliers should be ready and that consumers should also get acquainted with their rights.
The Act is not about consumers making money by taking businesses to task, but focuses on responsibilities different players owe to each other which is what some economists term ‘Global Civics’. According to the Department of Trade and Industry, equity and accessibility, market integrity and transparency, competitiveness, business innovation, consumer safety, and economic sustainability are among the policies informing the Consumer protection Act. Promoting and advancing the social and economic welfare of consumers in South Africa remains the main purpose of the Act which will automatically be sustained by establishing a legal framework for the achievement of a fair market, enhancing fair business practices, improving consumer awareness and reducing disadvantages faced by low literacy consumers.
The new sets of rights are based on internationally accepted and United Nations adopted consumer rights. The rights structurally adopted are: Right of equality to consumer market; right to privacy; right to Choose; disclosure and information; fair and responsible advertising; marketing and promotion; fair and honest dealings; right to fair; just and reasonable terms and conditions; right to fair value; good quality and safety. The new set of rights listed will realistically limit unfettered use of consumers’ personal information for unsolicited direct marketing, regulate automatic renewal of fixed term agreements, and provide rights for return of goods, prohibition of unfair marketing practices, including unfair and unjust contract terms inter alia.
“I think it’s (the Consumer protection Act) the best thing since sliced bread because the way we treat our clients is the way we want to be treated by our suppliers” says Nikki Viljoen, managing member at Viljoen Consulting. However, the Act has fuelled some negative response from concerned suppliers. Speculations are rife that SMMEs will experience difficulty and frustration in internalising this development. Lake, succinctly analyses that everyone promoting, marketing, manufacturing, importing, distributing or selling goods or providing services to consumers in South Africa must, at the very least, consider what aspects of their business require modification to comply with the Act. Return policies will need to be re-ascertained and ‘re-policised’ to comply with the Act.
While most large suppliers have existing return policies which offer consumers opportunities to return goods they have purchased for a refund within a particular period, this is not always the case for smaller retailers. Big businesses are also better placed to refund consumers than smaller businesses with restricted cash flows. The CEO of South African Chamber of Commerce and Industry, (SACCI) Neren Rau, adds that unlike big business, SMMEs cannot afford expensive litigation, voicing his concerns that since consumers can return goods even under unreasonable conditions such as damaged packaging, the Act is going to cause disruption in the value chain and SMMEs are going to struggle to get to grips with the CPA and its implications.
Strategically, one could conclude that the implementation of this Act will revolutionise the business environment in South Africa and both the consumer and supplier will benefit from the Act as it will promote honest and ethical dealings regarding both parties. |
