FRAUD TRANSACTION AND DELIVERY: SHOPPERS ARE WORRIED

A number of online shoppers have voiced out their fear of buying goods online due to online fraud. There are numerous reports regarding fraud occurring in our country. Online shoppers reported that they did not hear any updates from the sellers by the time they have made the payment. Other than the sellers terminating their contact numbers or websites, they would deliver items which failed to meet the requirements as advertised on the digital marketplaces, leading the customers to ultimate disappointment. 

Moreover, there is a case where a scammer manages to access a depositor’s bank account to conduct his criminal activity. The scammer who disguised himself as a loan agent, had persuaded 200 people to deposit their money into the complainant’s bank account for RM1000 scooters he advertised on FaceBook. The complainant who realized his account had been so active with money going in and out was left with charges as those depositors had pressed charges against him. Unfortunately, the person committing the crime vanished with the loan processing fee and due to the small amounts involved, the reluctance of the victims to lodge police reports had prompt these scammers to pursue their illicit trade without being traced (Mukhtar et al, 2016).

Hence, before successfully enrolling these businesses or individuals on digital marketplaces, they need to be authorized first. The details of the company or individual, company registration number, identity card, company address and bank account statement should be acquired beforehand. These documents can beneficial when it comes to performing a verification check. Even though these online scammers would provide a false information, this measure would impede them from continuing their activities due to the high level of security. 

GOODS ARE FAULTY? WARRANTY!

Although e-commerce is still developing and maturing rapidly in Malaysia, there are a few areas that need to be focused on in dealing with consumer protection. Other than being scammed by unethical sellers, online buyers are actively expressing their concerns regarding the warranty of their purchased goods. In general, any user guides are attached to the products being sold and return or exchange policies are often posted on the merchant’s website. Consumers are advised to register with them and store any proof of payment be it receipt or bill with them should any events occur. 

 Nevertheless, the warrant claim process could be tiring for buyers as it took quite some time to settle, which could lead for months. On the contrary, from a study carried out by Mukhtar et al., (2016) stated that half of the consumers mentioned that the process of claiming warranty for a product bought online usually required less than 14 days to accomplish. This issue arises because of several factors. Other than the delays, consumers are always denied of warranty because of the dispute between the service centres and their respective brands, together with the lack of service centres in the buyer’s location. 

In other cases, warranty claims are often ignored due to the absence because purchasers do not acquire formal bills from the sellers. Furthermore, the negligence of the dealer to stamp or sign the warranty card may decline the purchaser’s rights. Plus, due to the component being phased out by the goods manufacturer despite the products are still under warranty, dealers are not able to cover any future warranty claims. The issue involving the product life-cycles and growth in outsourcing is evident when purchasers buy items belong to the computer industry. 

It is important for both purchaser and dealers need to be certain that the warranty card is stamped with a clear date of purchase. Consumers should always keep in mind to check the expiration date of the warranty and the conditions that may void coverage. Also, it is recommended for consumers to look for conditions that could prove expensive or inconvenient especially when buyers need to deliver a heavy purchase to a factory for service. Lastly, because the e-commerce in Malaysia is lagged behind approximately 3 to 5 years when compared to industries in the US (Mukhtar et al, 2016), both stores and brands should come up with a feasible solution to resolve their issues. 

WHAT MAKES SKEPTICAL MALAYSIAN CONSUMERS TO PURCHASE ITEMS ONLINE WHEN PERSONAL INFORMATION AND MONEY ARE INVOLVED?

The Malaysian e-commerce is considered by the majority of leading experts to be in the early stage of development. Consumers are still studying the brands available online and what each brand can provide them. SKMM (2010) stated that 66.3% of our consumers are still choosing to shop in a physical store that enable them to have the privilege of inspecting the goods without having to worry about the security of e-commerce. Furthermore, since 59.1% of the consumers are expressing their disbelief of e-commerce while 58.7% of the consumers do not find digital marketplaces provide enough safety, Alam and Yasin (2010) studied the factors influencing consumer trust by taking data from the purchasing of flight tickets over the internet. 

Consumer behavior is reportedly to be influenced preferably through word-of-mouth (WOM) compared to other means of marketing communications, be it advertising and publicity. Ha (2004) mentioned that WOM is one of the key drivers of brand trust because as it is proven to increase consumer awareness, expectations, perceptions, attitudes, behavioral intentions and behavior. Alam and Yasin (2010) agreed that brand trust can be instilled successfully with the existence of positive WOM, hence concluding that there is a strong, positive relationship between WOM and the level of trust possessed by the consumer.  

One of the reasons consumers are reluctant to trust the digital marketplaces is because they are hesitant to provide their personal details, especially when it involves credit card. Unlike high-performing e-commerce economies, ours lacks of high-end security features which causes Malaysian consumers feeling insecure and lacking of trust in the internet. According to a 2013 survey carried out by Rakuten Online Shopping, an internet service company and owner of Malaysian marketplace, 83% of the respondents agreed that a secure website and transaction is the most important element that persuade their online shopping decision. Hence, the decision of the people in Malaysia buying their flight tickets over the internet is mainly prompted by the high level of security system offered by the marketplace towards the consumer’s personal information and transaction being disclosed to third parties (Ha, 2004; Alam and Yasin, 2010).

Alam and Yasin (2010) stated that there is a strong, negative relationship between perceived risk and the level of brand trust attained by consumers. Perceived risk can be categorized as economic risk, performance risk and purchasing risk. Consumers are terrified over the issue of monetary loss from online purchasing decision, the level of security in digital marketplace website and having to deal with products or services that do not meet the requirements as advertised. Therefore, the greater the amount of perceived risk that consumers have in online purchase transaction, the greater the impact on a certain brand.

In order to convince consumers to make more purchases online, it is important to set up a useful website with detailed and quality information. The engaging, authentic and relevant information ensures the consumers to have a good online experience as they get the opportunity to build a good rapport with the brand available on the digital marketplaces. Plus, quality information has the ability to increase consumers’ knowledge and awareness of the brand. Brands that are willing to invest their time and money into perfecting their functioning websites are considered to portray their level of commitment to their customers. A seamless user experience will eventually increase their consumers’ perception of their brand and trust. 

To make the digital marketplaces fair, the aforementioned factors could serve as a guideline for marketers in understanding the development of brand trust. Sellers should identify the factors that prompted customers to buy certain items or services over the internet. This is to make sure that businesses can always execute an effective plan to make their businesses more profitable at the end of the day. In addition, consumers can have the luxury of better services which will be greatly contributing to their confidence in digital marketplaces.

Trust is earned, but it can also be broken. So, show your commitment and install it into the basis of your company so everyone is onboard. 

COMBATING THE CHALLENGES OF ONLINE MARKETPLACES

One might ask, “Who is the regulator of digital market place?” or “Who is in charge of the consumer grievances due to internet fraud?” Well, Malaysia has introduced a set of e-commerce regulations based on a combination of the Electronic Commerce Act 2006 and the Electronic Government Activities Act 2007. The government also suggests that the contents in the e-commerce legislation are needed to be reviewed in order to adjust to any modification in technology as well as social networking and mobile applications. Plus, Malaysia has a prolific number of consumers who take the advantages of mobile phone where in 2011, it was reported that Malaysian constituted 61% of internet users in Asia (Mukhtar et al, 2016).

According to Bohme and Moore (2012), the likelihood of reducing online shopping among consumers who experienced cybercrimes previously has increased by 10%. Furthermore, the alarming number of cybercrimes has cause major concerns among consumers where 18% of them stated to reduce the activity of online shopping while 50% of them claimed to be extra cautious when buying things over the internet. As consumers feel discourage to make use of the online marketplaces, this could be causing a harmful effect to e-commerce businesses which could hinder them from expanding. Thus, Malaysia has look beyond this issue by establishing an Internet Banking Task Force and Malaysian Cyber Security Agency with an aim to encourage the consumers to do online shopping by heightening their confidence with the presence of strong internet security. 

Also, Malaysia Central Bank (BNM) called for the implementation of EuroPay Master card-Visa standard for transactions involving credit cards back in 2005. Furthermore, minimum risk management requirements are introduced for all types of electronic banking which consist of two-factor authorization. Malaysia too does not miss the opportunity to join the bandwagon of introducing e-commerce laws, policies and regulating e-commerce transactions internationally by participating in Asia Pacific Economic Cooperation’s (APEC). The aforementioned measures are expected to build a more convenient e-commerce environment in Malaysia as the health of the economy would deteriorate if consumers are declining the use of digital marketplaces. The authorities or organizations in Malaysia play significant roles in regulating Malaysian e-commerce environment and hopefully, one day, our e-commerce will grow and be on the same level to those in the United States or other advanced e-commerce destinations.