The impact of the Consumer Protection Act on SMEs in South Africa

Abstract

ABSTRACT The purpose of this paper was to investigate the impact that the Consumer Protection Act,68 of 2008 (CPA), has had on small to medium business enterprises (SMEs) in South Africa. The factors that were examined are how the CPA has impacted the relationships that SMEs have with their suppliers, customers as well as their overall efficiency. South Africa, as a developing country which has experienced a political regime that has resulted in the vast majority of the population being uneducated and unaware of their basic rights as a consumer, is in much need of legislation which protects the unsuspecting consumer. To investigate these issues, data was drawn from a sample of 120 SMEs, 90 from Gauteng and 30 from the Western Cape via telephonic interviews with either owners or senior management of the organisation and was then analysed using a combination of descriptive statistics and correlation analyses. The analysis confirmed that the majority of SMEs have not been affected by the introduction of the CPA. Results from this study can potentially provide policy makers and SME owners with an insight into the impact that consumer-protective legislation has on businesses.