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A key component of any thriving customer-facing business is its ability to deliver excellent customer service. Ultimately, an online business’s goal is to have customers repeatedly purchase their goods or services. Part of ensuring excellent customer service means handling customer complaints well. This article will discuss:

  • your obligations when handling customer complaints;
  • the policies you should have in place to deal with customer complaints;
  • how to convey these policies to your customers; and
  • how you should respond to customer complaints.

Your Legal Obligations

Legally, you do not need a complaints policy. However, having a complaints policy can help ensure that you address and resolve any complaints before they escalate.

For example, you have a customer that is claiming your business has breached the Australian Consumer Law. You want to try and resolve the issue before your customer escalates it to the Australian Competition and Consumer Commission (ACCC) or your state or territory fair trading body (such as NSW Fair Trading).

When a complaint is escalated to these government bodies, your business will often face increased scrutiny. You may also face a possible investigation into your business practices. This is both inconvenient and potentially damaging to your reputation.

The Australian Consumer Law contains a list of rights and guarantees that your customers are entitled to. For example, your customers are entitled to goods and services being safe and of acceptable quality.

Complaints Register

If you are a business located or selling goods or services in NSW, you should be aware of the NSW Fair Trading Complaints Register. The Register tells customers which businesses receive a high volume of complaints. Currently, your business will appear on the Register if NSW Fair Trading receives 10 or more complaints about your business in any given month.

Complaints to the Register do not need to concern a breach of the Australian Consumer Law, illegal practices or unsatisfactory goods or services. The Register will record any complaint received.

NSW Fair Trading has a very broad definition of a complaint. As a result, the Register may list your business for basic matters, such as customer service that a customer finds unacceptable. For example, long hold times on the phone. While you may do everything right legally, the way you handle customer complaints may have implications on the public opinion and regulatory oversight of your business.

To avoid being listed on the Register, it is important to resolve customer complaints before they escalate to that level. You can achieve this by having a process in place to deal with the complaints.

What to Include in Your Customer Complaints Procedure

Your internal complaints procedure should detail each step of the complaints process and provide clear guidance for what to do at each step. There are a few things that you should consider including in your complaints procedure.

How Customers Should File Complaints

Having a clear process on your website that sets out how to lodge a complaint or contact the business will help prevent customers from going directly to the ACCC or other government bodies. This gives you a chance to address and resolve their concerns before they escalate them. If you resolve the complaint promptly, you can prevent them from escalating it entirely. This is what you want to achieve.

Response Time

You should ensure that customers receive a response promptly after they lodge a complaint. The response should acknowledge their complaint and outline a time frame in which you will respond. There is no legal requirement for what this time frame should be. However, when coming up with a time frame, remember that the primary aim is to help prevent customers from escalating the issue to the ACCC or another government body. You also want to maintain customer confidence in your business. As a result, you will want to keep the time frame as short as possible.

Who Is Responsible for Resolving the Complaint

Having a dedicated person responsible for resolving complaints will ensure that complaints do not get missed or lost between different areas of your business. If the complaint needs input from several stakeholders within your business, the dedicated person should contact each stakeholder and obtain their input to formulate a response for the customer.

Ongoing Communication Plan

It is important to keep an open line of communication with the customer while you resolve complaints. This will help maintain your business’s reputation for customer service and prevent escalation to the ACCC or other government bodies.

Document the Resolution

It is important to document the communication and decision making involved in resolving the complaint, including whether the matter has been resolved. Doing this will help:

  • document how complaints were handled previously so that they can be dealt with in a similar way going forward. Or, if the steps taken could be improved, you can improve the process for the future;
  • identify problem areas within your business; and
  • prepare you for any potential litigation if the matter does escalate.

Key Takeaways

Although there is no legal requirement to implement a complaints policy for your business, ensuring that you deal with customer complaints appropriately has several commercial benefits. These include improving the customer experience and helping to prevent customers from escalating complaints to government bodies. If you have any questions about handling customer complaints, get in touch with LegalVision’s e-commerce lawyers on 1300 544 755 or fill out the form on this page.


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