Abstract
Five years ago, the government of South Africa enacted the Consumer Protection Act which is a piece of legislation that seeks to protect consumers in their day-to-day dealings with retailers and other businesses. Heralded as the best consumer legislation in the world, the new Consumer Protection Act was received with mixed reactions by many businesses in general and furniture retailers in particular. This study therefore endeavoured to unearth the challenges and opportunities that this new consumer protection legislation provides to furniture retailers in Cape Town, South Africa. Using triangulation as the research methodology, semi-structured questionnaires were administered on 150 respondents from the population of study. 20 in-depth interviews were also carried out with customer service and branch managers from selected furniture retailers in Cape Town. The study found out that corporate chain (national) retailers are more aware of the Consumer Protection Act than small independent furniture retailers and that most retailers have already started implementing the new act. The study also found out that the new Consumer Protection Act poses major challenges for furniture retailers. These challenges include financial report instability, increased transaction costs and also the need for continuous staff development and training. On the other hand, this study also found that, if properly implemented, the new legislation may lead to an improvement in reputation, product quality, customer service and staff motivation. Many furniture retailers have thus taken a leading role in pushing the frontiers of their businesses in order to comply with the act. This study will add to the body of knowledge of customer service and consumer protection by uncovering some specific strategies which furniture retailers can adopt to counter the challenges and take advantage of the opportunities presented by the new Consumer Protection Act. DOI: 10.5901/mjss.2015.v6n1p224
Highlights
Introduction and BackgroundAs the world moves more and more towards the comprehensive protection of the consumer on the marketplace, South Africa has become one of the latest countries to join the consumer protection bandwagon by enacting legislation that supposedly transfers power from sellers to buyers. Ardic, Ibrahim and Mylenko (2011) argue that “government intervention and regulation in the area of consumer protection is justified on the basis of inherent information asymmetries and power imbalances in markets, with producers or service providers having more information about the products or services than the consumers”
It is clear that large, well established national retailers are more aware of the new consumer protection legislation than the relatively smaller medium-sized retailers
It is clear that national retailers generally endeavour to equip themselves with relevant legislation on consumer protection they have a limited understanding of the law
Summary
Introduction and BackgroundAs the world moves more and more towards the comprehensive protection of the consumer on the marketplace, South Africa has become one of the latest countries to join the consumer protection bandwagon by enacting legislation that supposedly transfers power from sellers to buyers. Ardic, Ibrahim and Mylenko (2011) argue that “government intervention and regulation in the area of consumer protection is justified on the basis of inherent information asymmetries and power imbalances in markets, with producers or service providers having more information about the products or services than the consumers”. As the world moves more and more towards the comprehensive protection of the consumer on the marketplace, South Africa has become one of the latest countries to join the consumer protection bandwagon by enacting legislation that supposedly transfers power from sellers to buyers. Jagger (2006) elucidates that market dynamics in South Africa and across the world have contributed to the introduction of legislation to protect consumers. He further notes that the market is changing due to different factors such as the continuous introduction of new products, the changing behaviour of consumers, increasing competition across all industries and globalisation and these changes necessitate the need for laws that protects consumers
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