The role of quality marks in E-commerce

A paper for the EOTC Critical Issues Workshop - Marking 2000 - 'No Marking, No Selling?', Brussels, 13 and 14 September 2000, by Willem van Weperen, Keurmerkinstituut (Netherlands) - edited (links updated when possible - 2016)

As in real life, consumers also seek to reduce uncertainty on the Internet, particularly when they buy something. To this end, traditional quality marks may extend their scope to the world wide web, and new quality marks (E-quality marks?) may show up. Both options already have emerged, as will be shown below. First, the two concepts in the title of this paper will be explained.

E-commerce: a customer buys a product or service, offered somewhere on the Internet, by sending the order information (product type, delivery address, etc) to the shop through the Internet (by E-mail or by completing a form on a website); often the payment is arranged in the same session, e.g. by sending credit card number data. In this paper, only business-to-consumer (B2C) transactions will be considered.

Quality mark: compact, visual quality assessment, originating from a reliable source; the concept “quality” may refer to only one aspect (e.g. product safety or delivery in time) or to everything that the consumer may be uncertain about. In this paper, only quality marks issued by a “third party” will be considered.

Where the concepts new and old are used, they refer to “on-line” and “off-line”, respectively.

The global electronic commerce market is growing extremely fast and could be worth $ 1.4 trillion by the year 2003 (source: Forrester Research). In Europe, electronic commerce is already worth 17 billion euro and is expected to reach 340 billion euro by 2003. Quality marks may be important for the breakthrough of E-commerce, since a large part of the Internet users hesitate to buy online, because of the uncertainties they perceive (source: ncc.org.uk (2000)).


Uncertainties of consumers in E-commerce

New quality marks, especially designed for the Internet, may deal with one or more of the following uncertainties of consumers:

  • is the shop reliable: will it deliver what was ordered, and in time; will it provide after-sales support
  • is the consumer’s privacy in good hands: will personal data be adequately shielded, will the data not be used for undesired purposes, or even sold to other parties;
  • is the financial transaction secure: is interception of credit card data prevented, will the right amount of money be cashed?

In various forms, these uncertainties for consumers already exist in the old economy (cf. the mail order retail business), but E-commerce seems to combine them into a higher level of risk. Recently, it was shown that consumers in the UK hesitate to buy on-line due to these uncertainties (www.ncc.org.uk (2000)).

The traditional (old) uncertainty of the consumer, “will the product or service satisfy my needs adequately?” has not changed by the emerging of E-commerce. This can be addressed by the traditional quality marks, also on the Internet. The logo can be shown in combination with a product, on the Internet as well as in a brochure in real life. In practice, many Internet shops already apply the traditional quality marks in this manner.


Quality marks on the world wide web

One year ago (October 1999) the Keurmerkinstituut predicted a rapid growth of Internet related quality marks, part of which would probably not be in accordance with the internationally agreed standards for certification systems. We now see that this uncontrolled growth is indeed happening. On its website the Keurmerkinstituut keeps a directory of quality marks for (non food) consumer products, services and accommodations. The directory has a special section on Internet related marks, with a rather international scope. At present (September 2000) this section contains 18 items, which is twice the amount twelve months ago. In the list, marks from the Netherlands and English speaking countries are over-represented, so the true amount of E-quality marks will probably be a multiple of this figure.

The certification criteria of E-quality marks, as mentioned on their websites, vary from “having a nice webshop” to applying specific techniques for secure data transmission; many criteria include a privacy statement.

The assessment procedures - if explained- vary from “shop keeper’s declarations” (self-certification) to investigations by public accountants or quality system auditors. Some E-quality marks have been granted to the webshop of the operator of the mark, which is a violation of the first commandment of certification!

In order to prevent misuse, various measures are announced by the different E-quality marks, varying from “monitoring by the Internet community” to hyperlinks between the certified webshop and the official list of certificate holders. Some E-quality marks are accompanied by on-line dispute resolution procedures and complaints handling.

The following table shows a selection of current E-quality marks:

E-quality mark Aspects covered Homepage
BBB Online Reliability, privacy www.bbb.org
Trustmark Privacy www.truste.com
Web Trader Reliability, security, privacy www.which.net/webtrader/
VeriSign Security www.verisign.com/
Web Trust Reliability, security, privacy www.webtrust.org/
Square Trade Reliability Squaretrade.com

It should be noticed that the procedures behind these quality marks vary considerably, which implies that consumers should not rely on them too easily. In this respect, the Internet clearly resembles real life and its variation of traditional quality marks.


Testing and surveillance of E-quality marks

On the Internet it is so cheap and easy to cheat, that new methods will have to be applied for the testing and surveillance of quality marks.

Testing

A whole website may be “high-jacked” by an Internet pirate who intercepts all data traffic to and from the site, without the visitors noticing it. Or, the data of the customers may be accessible for unauthorised persons, e.g. external hackers. The operator of the website should take sufficient measures to prevent these things from happening. The adequacy of such measures may be assessed by Internet experts who are asked to find weak spots in the system; alternatively, certain shielding mechanisms with proven effectiveness, e.g. “fire walls”, may be prescribed. Financial transactions can be secured, e.g. with the help of encryption, which provides well-defined (low) risk levels.

Surveillance

A quality mark may be put on a website without the consent of the issuing organisation. Some players address this surveillance problem by an appeal to the Internet community to report misuse to the issuing organisation. Although, at first sight this looks rather weak,  it does make use of one of the typical characteristics of the Internet, i.e. the almost unlimited accessibility of information. One should also remember that the tracing of misuse has always been a weakness of quality marks, even in the old economy. Once a case of illegal use of a quality mark on the Internet has been reported, it may appear difficult to have it redressed. This may be hindered by cross-border problems, e.g. discrepancies in legislation, or even the inability to identify the person or organisation that is responsible for the misuse.

Precaution

A simple means to reduce misuse, is to combine every quality mark on the Internet with a “hyperlink” to the list of approved objects on the website of the issuing organisation. Consumers should be taught always to check the quality mark by following this hyperlink, and not to buy when the hyperlink is absent. This also applies to the “old” quality marks for products and services, and it would provide an new means to reduce the old uncertainty of consumers, i.e. “will the product/service satisfy my needs?”.


Trends in quality information for E-commerce

Old quality marks on-line

The Internet opens new possibilities for the “old” quality marks, e.g. they may publish their lists of approved objects on the Internet. As explained, this facilitates the verification of quality marks encountered by consumers on the Internet. Another new possibility is to extend the scope of old quality marks to typical Internet issues, e.g. the quality of Internet access providers (data transmission speed, expertise of help desk, etc), and the reliability of webshops. Although the majority of on-line quality information initiatives come from new players, most of the traditional certification bodies are learning fast. In the end, their expertise, their network and their endurance may prove to be decisive factors in the competition with the new players.

Information is free

On the Internet almost everything is free, including quality information. It appears to be very difficult to make consumers pay for information; consequently many sites with consumer information, e.g. price comparison sites, are financed by commercial parties. This also holds for certification bodies and their lists of approved products. Only quality marks with a robust third party accreditation will be able to withstand the pressure exerted by their sponsors. Other independent consumer information is available at websites operated by public authorities and consumer organisations. Probably, most consumers on-line will recognise the difference between potentially biased and neutral information, like they already do off-line.

Consumer networks

Consumers form virtual communities (newsgroups, plaza’s, chatrooms, etc) where they exchange experiences with others. Consequently, they may need less information generated by consumer organisations and certification bodies. Some webshops (e.g. www.amazon.com) ask their customers to produce reviews of their products, and publish them on the site. Other webshops publish product ratings based on enquiries held among their visitors. However, users are in general not able to assess all quality aspects of a product, e.g. environmental friendliness, so professional testers are still needed. Moreover, not all consumers are willing to visit other sites where it may be difficult to find the quality information they need. When there is a need for quality marks off-line, they will be needed on-line as well.


Conclusions and recommendations

All developments on the Internet are high speed and world wide. Quality marks in E-commerce can operate more flexibly and faster than national authorities, and they can function across national and regional borders. This implies that  E-quality marks are able to play an important part in the expansion of E-commerce to become a widely used purchase channel for consumers. The great number of new quality marks, as seen on the Internet, together with research into consumer behaviour, suggests that there is indeed a need for E-quality marks.

In order to be accepted by consumers and providers, quality marks for E-commerce should:

  • be clear about the meaning and the scope of the mark;
  • be flexible and fast, e.g. in developing criteria and producing assessments;
  • be accompanied by an up-to-date website, listing the approved objects;
  • interact with the Internet community to trace and tackle misuse;
  • establish world-wide co-operation in harmonisation of criteria and test methods and enforcement, e.g. through international standards;
  • be accredited according to an internationally agreed standard (ISO 17.000 series).

Moreover, it would help to limit the number of different logo’s, but this will probably not be easier on-line than it appears to be off-line.

In addition, consumers should be educated to:

  • know the meanings of the various quality marks;
  • verify quality marks on the site of the issuing organisation.

Of course, E-quality marks cannot solve all problems in E-commerce, so additional measures should be established by the authorities, e.g. the acceptance of electronic signatures, the harmonisation of consumer law, and the prosecution of fraud.