Dodgy retailers that breach consumer laws on refunds and returns are paying Google to secure the most prominent slots in its shopping listings, a Which? investigation has found.
In a snapshot investigation, Which? found online retailers that cumulatively attract well over a million visits a month were subjecting customers to a range of unfair terms and conditions or unreasonable charges – despite being bound by UK consumer law.
Among the most serious breaches were firms charging “restocking fees” of up to £300 for customers who want to return a purchase, demanding goods are returned in “brand new” condition and insisting on customers bearing the cost of posting faulty items back to Hong Kong.
With Black Friday just days away, the research is a warning to consumers tempted by bargain deals at the top of Google’s search rankings. The findings also raise questions about the scrutiny of paid-for listings on Google Shopping – which generate millions of pounds in profits for the search giant.
The electronics retailers Which? looked at – including eGlobalCentral UK, TobyDeals and Techinthebasket – are among the top search results on Google Shopping for popular gadgets such as the Samsung Galaxy Note 10, Apple iPhone 11 and Apple AirPods.
The companies are based in various countries – but all are subject to certain UK consumer laws because factors such as sterling pricing and UK website domain names mean they are classed as marketing directly to British consumers.
However, when the consumer champion analysed the small print of the sites, it found a number of breaches of the Consumer Contracts Regulations and Consumer Rights Act involving returns rights and faulty goods.
eGlobalCentral UK – which is based in Hong Kong but gets almost 90 per cent of its web traffic from the UK – states customers will be charged £15 if an order is cancelled after it has been processed and reserves the right to charge a restocking fee of £30-£300 if the terms of its returns policy are not met.
TobyDeals – also based in Hong Kong – said customers could face a £20 administration fee if they cancel after an order has been processed and warned of a £50 restocking fee for any missing accessories.
eGlobalCentral UK says it will only accept returns of goods “in brand new condition” and in the original packaging. But any customer would find it difficult to return their purchase in any event as the terms and conditions make clear that the only address provided “does not accept any return of goods”. TobyDeals customers came up against the same obstacle.
Both eGlobalCentral UK and TobyDeals said faulty goods must be returned within 14 days – less than half the period permitted by law, while TobyDeals also specified that the customer must bear the expense of shipping the item back to Hong Kong.
According to the Consumer Contracts Regulations customers have the right to cancel an order placed online at any time free of charge. Customers have at least 14 days after the product has been received to request a full refund and a further 14 days for the return to be received.
Less serious breaches of the rules were found in the terms and conditions of UK-based Techinthebasket and Wowcamera.
Wowcamera updated its returns policy to bring it into line with the regulations after Which? shared its findings, while TobyDeals also amended its online terms and conditions. Which? will be monitoring whether the changes to the online Ts&Cs are reflected in the customer service experience of these companies.
In the last three months of 2018, Google raked in $32.6 billion from advertising revenues across its various platforms, including Google Shopping.
Google Shopping generates revenue using a cost-per-click (CPC) model, so retailers only pay when a customer clicks through to their website. Retailers can bid on how much they are willing to pay per click, but higher bids usually secure the top search results.
While the CPC model is common among online marketplaces, Which?’s research suggests it allows dodgy retailers to buy a coveted slot at the top of search results, where their listings are likely to attract unsuspecting customers.
Google said it uses a combination of algorithmic and human review to check retailers using its Shopping Ads. It said it had disapproved and removed the retailers’ Shopping Ads in the UK.
Last month Which? revealed how consumers were at risk of being scammed by high-risk unregulated financial investment products marketed online – including through paid ads on Google.
Which? is passing its findings to the Competition and Markets Authority, the regulator which is currently carrying out a wide-ranging investigation into digital advertising.
The consumer champion’s advice to shoppers looking for bargains this Black Friday is to be wary of offers from little-known brands and check your consumer rights so you have the upper hand if a seller tries to fob you off.
Adam French, Which? Consumer Rights Expert said:
“Our research shows how dodgy retailers can exploit a lack of oversight of ads on Google’s shopping platform – putting consumers at risk of being ripped off.
“It seems wrong that firms that breach consumer laws can pay Google to secure prominent slots at the top of shopping search results.
“This is a significant gap in consumer enforcement, which reinforces why the next government must carry out a major overhaul of the system to reflect how people buy goods and services today.”
Notes to editors:
Summary of findings:
- At the time of our investigation the retailers’ returns and refunds policies stated the following:
|Rule breach||What UK law requires||eGlobalUK||Techinthebasket||TobyDeals*||Wowcamera*|
|Charge to return unwanted goods||Cost of return delivery only||£15 fee||–||£20 fee||–|
|Charge to return faulty goods||£0 & consumer not liable for cost of return delivery||–||–||Charges customer cost of return delivery||–|
|Charge a ‘restocking fee’ for returns||£0||£30-£300||–||£50 for missing accessories||–|
|Time restrictions for returning faulty goods||Up to 6 years**||14 days & in original packaging||–||14 days||14 days|
|Incorrect time restrictions for returning unwanted goods bought online||14 days to cancel, then another 14 days to return||–||Only allows 14 days for a return||–||–|
|Contact details listed||Must provide contact details and address||No returns address or contact details listed||–||No return address and return link buried on website||–|
- *in response to this investigation both Toby Deals and Wowcamera have agreed to make changes and ensure future compliance with UK consumer law. The two other retailers, eGlobalCentral UK and Techinthebasket, have not responded to our request for comment.
- ** UK consumer law states that you have 30 days from taking receipt of a faulty product to return it for a full refund. After the right to get it repaired or replaced lasts for up to six years.
- A Google spokesperson said: “Because we want the Shopping Ads you see on Google to be useful, relevant, and safe, we have robust policies describing what we do and don’t allow on our ads platform. In addition, we require the merchants who use our platforms to adhere to local law. As such, we have disapproved and removed their Shopping Ads in the UK.”
- Which?’s Consumer Agenda for Government details six areas a new government should focus on to make consumers’ lives simpler, fairer and safer. The consumer champion is calling for a stronger Consumer and Competition Authority to proactively lead on the enforcement of consumer rights and fair trading law, for the Office for Product Safety and Standards to become an independent, arm’s length product safety regulator and for reform of the Alternative Dispute Resolution (ADR) system.
- In October, Which? research raised concerns about online marketing for financial products that blurred the lines between cash savings accounts and high-risk investments.
- Which? Consumer Rights has more information about your rights around online returns and faulty goods.