Hidden fees: Beware of online shopping traps, consumer watchdog warns

Hidden shopping fees are costing New Zealand shoppers $68m each year. Photo / Getty Images

Consumer NZ is calling for stricter retail pricing rules to ensure shoppers are not hit in the pocket by hidden fees, on World Consumer Rights Day.

The consumer watchdog is warning spenders to be careful of online traps.

Online shopping is growing at around 17 per cent a year, faster than bricks and mortar shopping which is growing at 3.5 per cent a year.

More than two million Kiwis are shopping online, spending over $4 billion per year, but the rapid increase has brought with it a rise in unfair practices, Consumer NZ chief executive Sue Chetwin says.

"Unfair practices, such as adding sneaky booking or service fees to prices, are hitting consumers' wallets," Chetwin said. "We're calling for stricter pricing rules to make sure consumers aren't misled about what they have to pay. Retailers shouldn't get away with hiding extra fees in the fine print."

Research by Consumer NZ found fees added to advertised prices were costing shoppers approximately $68m each year.

Unclear contracts were also affecting online shoppers, Chetwin said.

"A common example is making a one-off purchase of a product and then finding you've been signed up to an ongoing service.

"When retailers don't make the terms of an offer clear, they risk misleading consumers and breaching the Fair Trading Act."

Retail NZ general manager of public affairs, Greg Harford, said it recommended that consumers shop locally for the best protection.

"When Kiwis shop online from New Zealand websites, they have the protection of the Consumer Guarantees Act and the Fair Trading Act – but they don't have that assurance when shopping from offshore," Harford said.

He said New Zealand online firms were losing market share to foreign competitors.

"In 2012, two-thirds of online shopping by Kiwis was on New Zealand websites, but this had fallen to 55 per cent last year," Harford said.

Consumer NZ's advice for shopping online:

1. Check the trader has a local physical address and phone number.

2. Shop around to see alternative prices before you buy.

3. Pay with a debit or credit card so that you can apply for a charge back from the bank if the goods don't show up.

4. Ensure the site you are purchasing from is secure with a "https" address.

5. Know that you can return items from New Zealand traders if they are faulty.