ACCC launches Federal Court proceedings against Booktopia over consumer law allegations

The ACCC is taking Australia’s largest online book retailer to court over allegedly false or misleading claims about its refund policy.

Booktopia warehouse shelves, above. The online retailer says it ‘has provided all co-operation to the ACCC in a timely manner’.

The competition watchdog has launched Federal Court proceedings against Australia’s largest online book retailer, Booktopia, over alleged consumer law violations.

The Australian Competition and Consumer Commission says Booktopia made false or misleading representations to consumers about their rights to refunds and other remedies for faulty or damaged goods between January 10, 2020 and November 2, 2021.

Booktopia is alleged to have represented that consumers had to notify it of a faulty, damaged or incorrect product within two days of delivery to have a right to a refund or other remedy, and that consumers had no right to refunds on certain products, including digital content and ebooks, in any circumstances.

The online retailer is alleged to have also told two dozen customers it was not obliged to provide a refund or remedy because the consumer had failed to notify Booktopia of a fault within two days of delivery.

The ACCC says the representations made directly by customer service staff to the 19 consumers were false or misleading because they did not reflect consumers’ rights to obtain a refund or other remedy under the Australian Consumer Law (ACL).

The ACL gives consumers a right to remedies if the goods do not meet the consumer guarantees, including if they are of unacceptable quality. Consumer guarantee rights extend to digital goods, and do not have a two-day expiration date.

ACCC chair Rod Sims said consumers who buy digital products or buy products online have the same rights as those who shops at bricks and mortars outlets.

In a statement, Booktopia said it included the policy in its terms of business to ensure the company could “confidently provide replacements, refunds and other remedies to customers”.

“We always encourage customers to contact us so that we can resolve their concerns. At no time were these communications intended to exclude or limit Booktopia’s obligations under the Australian Consumer Law,” the company said.

“As an Australian company, Booktopia takes its obligations under the Australian Consumer Law and its commitment to customer service very seriously and has provided all co-operation to the ACCC in a timely manner.”

Booktopia added that customer service was fundamental to how it trains its employees, sets policies and empowers staff to look after customers.

The lawsuit comes as the coronavirus pandemic has put a tailwind under demand for Booktopia’s products.

In the 2021 financial year, Booktopia recorded a 27 per cent increase in total units shipped to 8.2m.

Its average spend per customer rose to $126.85 (from $111.43 in the prior year), with the average order value at $71.07 (up from $65.08).

But Booktopia’s share price has failed to match that growth, dropping by around 40 per cent since the retailer’s ASX debut last December at $2.86.

On Friday it closed at $1.78.

The competition regulator is seeking penalties, declarations, costs and other orders.