Can marketplaces be held accountable for miscommunication in promotional offers?

Promotional offers, discounts, and advertisements are a major driving force behind consumer decisions in e-commerce. However, mistakes or miscommunications in promotional offers, such as incorrect pricing, unclear terms, or misleading claims, can cause significant confusion and dissatisfaction. Consumers might feel misled, and this could harm the marketplace's reputation. Depending on the nature of the error, online marketplaces could be held responsible for the miscommunication, especially if it results in financial loss or violates consumer protection laws. The marketplace has an obligation to ensure transparency and fairness in its promotional practices.

Key Points on Accountability for Miscommunication in Promotional Offers

Marketplace’s Responsibility for Accuracy

• Pricing and Discounts: Any promotional price must reflect the actual discount, and the terms and conditions of the offer should be communicated clearly.
• Duration and Availability: The time period for which the promotion is valid, and any limitations or exclusions, must be disclosed transparently.
• Product Eligibility: If an offer is applicable only to certain products, categories, or customer groups, this must be clearly stated to avoid confusion.
• Legal Basis: Under consumer protection laws, including the Consumer Protection Act, 2019 (India) and the Consumer Rights Directive (EU), businesses are required to avoid false or misleading advertisements. If the promotional material is found to be deceptive, the marketplace could face penalties.

Legal and Regulatory Framework

• Consumer Protection Act, 2019: This act empowers consumers to seek redressal if they feel misled by false advertisements or promotional offers. A marketplace could be held liable for any incorrect claims made during promotional campaigns if it results in consumer loss or disappointment.
• The Advertising Standards Council of India (ASCI): ASCI provides a code of conduct for advertising, ensuring that all marketing communications are truthful and do not mislead consumers.
• Unfair Trade Practices: According to the Indian Contract Act and Consumer Protection Act, misleading or deceptive offers, including false promotions or unfulfilled promises, may be classified as unfair trade practices. If a marketplace is found guilty, it could face legal action and penalties.

Mistakes in Promotional Terms

• Refunds or Discounts: If customers purchase a product believing they are receiving a discount that is not valid, they should be entitled to a refund or an equivalent discount.
• Rectifying the Offer: If a promotional offer is found to be misleading, the marketplace must address the issue immediately. This could include offering the intended promotion to affected customers, providing a refund, or offering compensation.

Promotional Offers vs. Bait and Switch Tactics

• Bait and Switch: A bait and switch occurs when a marketplace advertises a product at a lower price but does not honor the offer once customers attempt to purchase the product. If a marketplace advertises products or services at certain prices but fails to make the product available at that price, it can be considered fraudulent marketing.
• Consumer Recourse: Consumers affected by such practices have the right to file complaints and seek remedies, such as refunds, alternate product offerings, or compensation for damages.

Deceptive Practices by Sellers on Marketplaces

• Seller Responsibility: Marketplaces often vet and monitor sellers to some extent, but if the seller engages in misleading promotional practices, the marketplace could be considered partially liable if it does not take corrective action.
• Liability of the Marketplace: The marketplace can be held liable for allowing misleading or fraudulent promotions to take place on its platform, especially if it has not implemented measures to prevent such behavior.

Transparency and Communication

• Clear Terms and Conditions: All promotional offers must be backed by clear, accessible, and concise terms and conditions, including the scope of the offer, eligibility criteria, and the method of claiming the offer.
• Real-Time Updates: Marketplaces should communicate updates about promotional errors in real-time, informing affected customers and offering solutions quickly.

Consumer Protection and Remedies

• Refunds or Adjustments: If a promotion was incorrectly advertised, consumers are entitled to refunds or to receive the goods or services at the advertised price.
• Compensation for Losses: In some cases, if the consumer suffered a loss (e.g., the product was not available at the promotional price), they could seek compensation for the inconvenience or financial loss caused by the miscommunication.

Example

Suppose Ravi buys a pair of shoes from an online marketplace, FashionHub, after seeing a promotional offer that promises 50% off on all products. However, after placing the order, Ravi receives a message stating that the offer only applies to select products, not including the shoes he purchased. Ravi feels misled and requests a refund.

Steps Ravi Could Take:

• File a Complaint: Ravi can contact FashionHub’s customer support to resolve the issue, asking for either a full refund or the shoes at the advertised price.
• Seek Consumer Redressal: If Ravi’s complaint is not resolved satisfactorily, he could file a complaint with the Consumer Protection Authority or the National Consumer Helpline for unfair trade practices.

Steps FashionHub Should Take:

• Review the Promotion: FashionHub should immediately review the promotion and identify why there was confusion or miscommunication.
• Offer Resolution: FashionHub should provide Ravi with a refund, an exchange, or honor the promotional price, depending on the terms of the offer.
• Update the Offer: The marketplace should correct the promotional details and ensure that future offers are clearly communicated to avoid further misunderstandings.