We previously discussed what to do if the item you received from an online purchase is not the one you ordered. Today, let’s look at another situation that often arises with online shopping: what should you do when the seller fails to ship your order?

Reasons Why a Seller May Fail to Ship

Beyond the business’s control

Sometimes a business fails to ship for reasons beyond its control, and at times it may not even know when the consumer purchased the product — for example, delays caused by the business’s own suppliers or by the delivery company. If you have not received the product for reasons of this kind, consumers need to give the business a reasonable opportunity to provide an appropriate remedy, such as a refund or replacement.

If the business clearly knows the issue is outside its control, it must provide the consumer with the following clear and accurate information:

Stock availability

Expected production and delivery timeframes

What remedy the business will offer if it cannot supply the product on time or within a reasonable period

The business must proactively keep the consumer updated on this information and on what steps it is taking to resolve the delivery delay.

Accepting payment with no intention to supply

Under the Australian Consumer Law, a business must not accept payment from a consumer if:

they do not intend to supply the product or service as described

they intend to supply a product or service materially different from what was promised

they know they will be unable to supply the product or service by the promised date or within a reasonable time

Scams

Sometimes consumers fail to receive the products they have paid for because the seller is not a genuine business. The ACCC’s Scamwatch service provides channels for reporting such conduct.

It is worth noting that scam activity is particularly prominent within the Chinese community. In 2019, Scamwatch received approximately 900 scam reports involving the Chinese-Australian community, with total losses exceeding $1.5 million. This figure surpassed the 2018 total of nearly $1.2 million in scam losses.

Dropshipping

Sometimes the products a seller offers do not come from their own stock; instead, the seller has arrangements with other suppliers and lets those suppliers ship directly to the consumer. Before you pay, you can ask the seller whether they use this kind of supply model. If the seller does operate on a dropshipping basis, the business must provide the consumer with the following information:

Stock availability

The source of the stock

Likely delivery timeframes

The reason a seller adopts this supply model is usually to reduce sales costs and therefore lower the product price. However, this model means the business does not directly control its own stock, so when you are choosing a product you need to weigh things more carefully — the lowest price is not always the best option.

What Should You Do?

First, if you have not received the product or service on time, your first step is to contact the merchant. Our experienced lawyers can deal with the business on your behalf.

If the merchant’s response is not satisfactory, you can lodge a report with the Australian Competition and Consumer Commission (ACCC). However, you should understand the scope of the disputes they handle: the ACCC will investigate the business you have reported, and if it finds the business has breached its obligations, it may take compliance or enforcement action. But the ACCC will not resolve the individual dispute between you and the business. So if you need to resolve a personal dispute with a business, you are welcome to consult our experienced lawyers.

Final Thoughts

In short, when you are shopping online you need to consider carefully whether the seller’s products come from their own stock and what the expected delivery timeframe is. If you are unfortunate enough to encounter a situation where the seller refuses to ship after you have paid — especially where the value involved is significant and the business is not offering an appropriate remedy — we strongly recommend that you engage an experienced lawyer to advise you and protect your rights.