The biggest consumer complaint in South Africa
During the 2023/24 financial year, there were 11,282 complaints about South African businesses and services filed to the Consumer Goods and Services Ombud (CGSO) – majority of which stem from online purchases.
From these complaints between 1 March 2023 and 29 February 2024, the CGSO recovered over R12.13 million for consumers in cash or cash equivalents.
This is outlined in the CGSO’s annual report, which is published in compliance with the provisions of the Consumer Goods and Services Industry Code of Conduct (CGSI Code).
The code was established to guide the goods and services industry as to what is considered the minimum standards of conduct expected when engaging with a consumer, as well as to assist in resolving disputes.
“It creates confidence in the system by allowing consumers to push back on unfair and deceptive practices without having to resort to formal legal action,” said CGSO CEO Queen Munyai.
Of note is that for the fourth year in a row, the majority of consumer complaints reported to this office were about online transactions, even though e-commerce represents just about five percent of the total retail sales in South Africa.
The complaints primarily concern late or failed deliveries, defective products, or items that do not meet the expectations of the customers.
Liaquat Soobrathi, CGSO’s Ombudsman, said that “this is partly because of the nature of online shopping.”
“In brick-and-mortar stores, customers have the opportunity to inspect goods and – except for furniture or large appliances – generally do not rely on the supplier to deliver [a]nd, when goods are defective, the return and refund process is often handled in-store,” said Soobrathi.
The Ombudsman placed the blame largely on a lacuna of legislation in South Africa targeted towards protecting online consumers – particularly when it came to third-party sellers.
“The fact remains that there are clear gaps in the legislation when it comes to protecting online consumers, especially concerning online marketplaces that host high-volume third-party sellers who could be based anywhere in the world.”
“Most consumers are unaware that they have contracted with a third-party seller until things go wrong,” said Soobrathi.
“If the third-party seller subsequently ghosts the customer, very little redress is available,” he added.
Looking at sector specific complaints for the 2023/24 financial year, online transactions, appliance manufacturers and retailers, and satellite and communications generated 74% of consumer complaints received, up from 63% in 2022/23.
According to the 2023/24 annual report, like in the previous three years, the most common consumer complaints for both products and services were related to delivery issues, defective goods, and the cancellation of agreements.
Specifically, most South African consumer complaints related to:
- Goods not being delivered on time;
- Goods becoming defective within six months; and
- Poor service while trying to resolve a complaint.
Complaints to the Ombud
“The number of queries and complaints we receive each year has been rising steadily over the last three years,” said Munyai, citing increased awareness of the avenue for resolution and consumer rights.
During the review period, 60% (4,720) of 7,838 resolved cases were favorable to complainants, up from 55% the previous year; 38% (2,993) were fully in favor of the consumer, 14% (1,139) were resolved within 15 business days, 5% (417) received assistance, and 2% (126) were partially in favor.
When calculating the outcome as a percentage of all cases, they excluded cases that were closed because they were unable to proceed (2,302) for various reasons, including being out of their jurisdiction.
Since inception, three provinces have accounted for almost 80% of all complaints received, with just under half emanating from Gauteng (46%), followed by Western Cape (19%) and KwaZulu-Natal (13%).
Munyai said that the reasons for this go further than the size of the respective economies and concentrated urban populations.
“Our various outreach programmes… have revealed a significant lack of awareness of consumer rights in rural and impoverished communities,” said the CEO.
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