By Emma Koehn
The Federal Court has ordered online bookseller Booktopia to pay a $6 million fine after the retailer told customers between 2020 and 2021 that they were entitled to a refund for faulty items only if they notified the company within two business days of delivery.
The Australian Competition and Consumer Commission launched court action against Booktopia in December 2021, alleging the business made false and misleading statements in its online “terms of business” between January 2020 and November 2021 about when a shopper could get a refund or return items.
ACCC commissioner Liza Carver said it was not known how many Booktopia consumers might have been deterred from getting a refund. Credit:
These claims included that Booktopia was not obliged to provide a refund for incorrect or faulty orders unless the shopper had notified the business within two working days of receiving the order, and that they were not entitled to a refund for digital products such as eBooks for any reason, even if the product was faulty.
On Friday, the Federal Court ordered Booktopia to pay total penalties of $6 million, as well as publishing a note on its website acknowledging a contravention of Australian consumer law and that the business establish a consumer law compliance program.
Booktopia also acknowledged that 19 consumers were told during customer service calls that the company was not obliged to provide a refund or replacement if the shopper had not raised the issue with Booktopia within two days.
In a statement to the Australian Securities Exchange, Booktopia said the statements about refunds had been removed at the start of November 2021. The company acknowledged the statements were not correct nor compliant with Australian consumer law.
“Booktopia takes its obligations under the Australian consumer law and its commitment to customer service very seriously and has co-operated with the ACCC throughout the process,” chairman Peter George said.
“We are glad to put this behind us and to continue to serve Australian customers with the book-buying experience they have known and loved for many years.”
ACCC commissioner Liza Carver said Booktopia’s statements had been misleading because customers were entitled to receive a refund, return or replacement of a faulty good, depending on the situation, within a “reasonable” time frame.
“We do not know how many consumers may have been deterred from seeking a refund or replacement by Booktopia’s misleading representations on its website,” she said.
Former Booktopia chief executive and co-founder Tony Nash was forced to step down last year. Credit: Kate Geraghty
Booktopia is Australia’s largest online bookseller. In January, the company announced it had implemented a range of cost-saving measures as a response to changing consumer sentiment, which would result in 30 to 40 redundancies.
An investigation by The Age and Sydney Morning Herald last year revealed the group had experienced a turbulent first 18 months as a listed company and had fallen out of favour with investors amid concerns about its performance and leadership.
In July 2022, the company’s board forced co-founder and chief executive Tony Nash to step down from his role. Nash called a shareholder meeting in August with a plan to use the 30 per cent stake he and his family own in the business to overhaul the board, and the group’s four remaining directors resigned.
Peter George, well known for his experience with corporate turnarounds, was appointed as Booktopia’s chair in December.
Booktopia shares were 4.2 per cent lower to 23 cents just before 2pm on Friday amid a broader ASX sell-off.
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