E-commerce companies have to ship products to buyers within 7-10 days after completing orders, depending on delivery locations.
Failing to do so, they will face fines and have to refund the customer. They will even be indicted in a fraud case for supplying a faulty or subpar product.
With many such guidelines, a policy for e-commerce is coming up to streamline the fastest-thriving business model.
The commerce ministry has already prepared a draft of the policy. Next week, the ministry will sit with the ministries and agencies concerned, and representatives from the e-commerce sector to finalise it.
However, this policy is only for web-based e-commerce companies. The commerce ministry will later issue a separate policy for small e-commerce initiatives that have grown on Facebook and other social media sites.
The number of web-based e-commerce companies now stands at around 2,000. There are more than 50,000 Facebook- and other social media-centric initiatives.
The government is making guidelines to help the e-commerce sector thrive by reducing the existing anomalies and protecting consumers’ interests, said commerce ministry officials.
The ministry believes that it will be possible to employ five lakh people in the e-commerce sector next year if transparency is ensured through a clear policy to restore consumers’ confidence.
The draft policy states that e-commerce companies will be obliged to hand over a product to its delivery person within a maximum of 48 hours after the product’s order is placed online.
Penalty for late delivery
If the buyer-seller location is in the same district, the delivery company will have to ship the goods within seven days. If the buyer is from another district, the delivery company will have a maximum of 10 days to drop off the product at the buyer’s address.
The penalty for late delivery will be a fine and refund of advance money.
A company cannot accept orders for an out of stock product. A product displayed online must have accurate specifications so that buyers can be sure about the quality, according to the draft policy.
Bait and switch–delivering low quality products by showing pictures and specifications of good quality ones–will be considered a fraud. In this case, section 420 of the Penal Code will be the friend of the buyers as they can file fraud cases.
The draft policy will soon be placed before the cabinet for approval after finalising it in consultation with entrepreneurs, and relevant government ministries and departments, said Hafizur Rahman, coordinator of the Central Digital Commerce Cell at the commerce ministry.
Draft policy framed to protect consumer rights
They are formulating the policy that will play a supportive role in developing the e-commerce sector by creating consumers’ confidence in the sector, he also said.
The Directorate of National Consumer Rights Protection will be given the responsibility of implementing the final policy. For this, the directorate’s law will also be amended, he added.
Abdul Wahed Tamal, general secretary of the e-Commerce Association of Bangladesh (e-CAB), told The Business Standard, “We have not yet formally been given a copy of the policy that the commerce ministry has drafted. We have already submitted a written proposal to the commerce ministry with various recommendations.”
e-Cab has proposed an advance payment system through debit or credit card and mobile financial services instead of the cash-on-delivery method.
e-Cab officials said e-commerce companies do not get payments of goods directly from buyers in the cash-on-delivery system. It takes a day or two to get the payments from delivery persons.
Again, if a buyer does not accept any product, the companies have to bear the delivery charge again, which is a total loss. This problem will not exist if buyers make digital payments in advance.
e-Cab suggests escrow service
To this end, e-Cab has suggested setting up escrow service–an intermediary organisation. Advance payments will be credited to the organisation’s account. It will transfer the money to a respective e-commerce company’s account only if the buyer is satisfied with the product’s delivery.
If the buyer is not happy with that product, the e-commerce company will refund the money. The e-Cab proposal says such a system has been developed abroad.
In this context, Hafizur Rahman said the cash-on-delivery system cannot be stopped immediately. If buyers do not feel confident with e-commerce companies, they will not pay in advance with products unseen.
Many people have faced issues by making advance payments to Evaly and other companies with an enticement of getting products on cashback and discounts. Cash-on-delivery does not have this problem when it comes to product delivery. Most complaints about e-commerce are about non-delivery of products after payments in advance, he added.
Hafizur said there are also many complaints of delivering poor quality products by showing pictures of good quality ones on e-commerce sites.
To protect consumers against such frauds, the draft policy prescribes that the websites should include as detailed a specification as possible along with an image. In case of any discrepancy, it will be considered a fraud and will be a criminal offence under the criminal law.
Consumers need protection
Sadruddin Imran, chairman of e-Cab, also admitted that there were allegations against e-commerce companies for not delivering products by taking advance payments or delivering low-quality products.
Therefore, there is a need to have a framework for protecting consumer interests and the smooth development of the e-commerce sector, he added.
e-Cab also agrees with the draft policy’s proposal to set a specific time limit for product delivery.
However, the association thinks it will not be reasonable to set the same deadline for all companies or products.
In this regard, the e-Cab chairman said delivery time should be determined based on the products’ types. It will not be right to set a similar time for the delivery of all products. Bulk items cannot be delivered within seven days.
He said many products need assembly before delivery. Grocery products can be delivered in a day or two, but a motorcycle might not be shipped in seven days.
“Small e-commerce companies have a lower number of customers than the big ones,” he said. We have proposed that the ministry specify the number of delivery persons according to the number of customers. This will ensure that buyers will have less hassle to get products.
e-Cab also thinks that e-commerce platforms like Daraz and Evaly will be in trouble if order processing without stock in hand is not allowed.
Golam Rahman, president of the Consumers Association of Bangladesh (CAB), told that e-commerce will not expand much unless consumer interests are protected.
So a proper implementation of the policy – being formulated to protect the people’s interests – is needed. Even then, if there is a problem, a law alongside the policy can be made in keeping with the world standards, he said.
It is also necessary to monitor the sector so that it can be expanded within the rules, the CAB president added.