Johannesburg - South Africa's retailing industry said it was prepared for the Consumer Protection Act (CPA), a new law which now holds it liable for products along with manufacturers, importers and distributors.
Insurance group Chartis said on Wednesday that the CPA, which takes effect from October, will expose retailers to liability actions from consumers while product recalls are also likely to increase.
The new legislation has been described as "onerous" on the supply chain while offering the best protection to consumers.
"This wide definition means that retailers will be the ones targeted by disgruntled buyers," said Keith Marshall, regional manager of the liabilities group at Chartis South Africa. "They are closer to the consumer than suppliers further down the line.
"Even if the fault is not theirs, they may still have to defend themselves against the action which could be hugely expensive," he said.
However, retailers said they welcomed the legislation as it advances the ideals of a fair and sustainable market place. Consumers would be given more redress leverage on faulty products, they said in interviews with Fin24.com.
"We believe consumers have the right to complain to the retailer if there's something wrong with the product, and the CPA formalises those rights," said Grant Pattison, CEO of Massmart Holdings whose brands include Game, Makro and Dion Wired.
"Honest consumers are now well protected and the dispute resolution processes will ensure they are treated fairly," he said.
"With regards to dishonest consumers, the CPA protects the retailer from complaints made with the objective of defrauding them, and we will welcome the protection provided."
Said Shoprite Holdings marketing director Brian Weyers: "The Shoprite Group supports the socio-economic and human rights objectives and general purposes of the act".
"It can be expected that the introduction of the act will pose challenges to the industry similar to that following the introduction of the National Credit Act. The group is gearing itself to meet these challenges," he said.
Weyers added, however, that Shoprite did not expect consumer claims to be material because it has already had a refund and replace policy for a long time.
Pick n Pay's Tamra Veley said for the most part, the protection offered to consumers by the act reflect the group's existing retail practices.
Said Pattison: "We have redesigned a number of our processes. For example, we have updated our agreements with suppliers to so that they reflect joint responsibility for quality in terms of the CPA.
"We have also updated our information collection [systems] from our call centres to ensure that we get all the details about complaints" That means "a more disciplined way of collecting information about complaints".
Pattison said Massmart does not expect a sudden rise in complaints when the CPA comes to effect, nor does the group expect the act to have negative effect on its finances.
"Our experience is that our clients very readily complain when there's a problem with the product, and we're not expecting a change in that."