Zeroes to heroes - Australia's coupon sites clean up their act

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Group buying sites have made news.com.au readers furious. Picture:Thinkstock

AUSTRALIA'S group buying websites have launched a world-first code of conduct to self-regulate the industry and protect customers from dodgy deals, misleading statements and useless vouchers.

Launched yesterday in conjunction with the Australian Direct Marketing Association (ADMA), the Australian Group Buying Code of Practice will introduce standards that will increase consumer confidence when shopping on coupon sites.

The move comes after angry consumers flooded news.com.au with hundreds of comments and emails about misleading offers from group buying sites.

This followed a report that authorities were warning they were on the verge of stepping in to regulate the fast-growing industry if the situation didn’t improve.

Sites adhering to the code claim all communications are clear so customers know what they’re signing up for, appropriate refund policies and procedures are in place should something go wrong, and all advertising is legal and truthful.

OurDeal, Cudo, Spreets, Groupon, LivingSocial, Ouffer, Scoopon and Jump On It have already signed up as founding signatories.

“These companies really do want to take a proactive step to make sure there are some industry standards, and that consumers feel they can have some confidence,” ADMA chief executive Jodie Sangster said.

The ADMA and the Australian Interactive Media Industry Association (AIMIA) jointly developed a code of practice specifically for the group buying industry.

Ms Sangster said that in addition to the code, signatories were taking additional steps to reinforce with merchants their obligations under law.

“Group buying is a relatively new phenomenon in Australia,” Ms Sangster said.

“The group buying market grew from $123.9 million in quarter 2, 2001 to $158.5 million in quarter 3, 2011 and is well on track to exceed market forecast of $400m for the 2011 calendar year.

“All group buying companies are welcome to sign up to the code and take part in this important scheme.”

Christopher Zinn from consumer group Choice said while the new code is a plus for consumers, the question is where it goes to from here.

"It is a win for consumers because it was like the wild west up until this point," he said.

"But there are issues because firstly it’s voluntary and also not every group buying site is signed up to it. Only about eight at this stage.

"Also I think the code could be more specific, to say that goods and services will be delivered within a certain period of time for example.

"Also, what is the enforcement of sanction? A code of conduct is a great place to start but what are the sanctions for breach of the code? Is it a slap on the wrist or a fine? This will be the most important thing."
 

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