At the beginning of the pandemic, Francisco Fierros, a dentist from the Mexican city of Cuernavaca discovered that his TV had stopped working. His family was housebound and his children needed to take video courses, so Fierros went shopping.
Because he couldn’t go to the mall, Fierros went online. He ordered a 50-inch Hisense big screen TV from Sanborns, the venerable department store, restaurant chain, and retailing empire founded as a soda fountain in 1903 and owned by Carlos Slim, Mexico’s richest man. Slim’s online retailer, Claro Shop, facilitated the transaction. But the big screen never arrived.
Fierros said he called the Claro Shop more times than he can remember — sometimes waiting for as long as 90 minutes — but he couldn’t get a straight answer about the status of his purchase. Customer service representatives initially said the television was in transit. Then they blamed the delay on a third-party delivery company and the pandemic, Fierros said. After more than three months of frustrating phone calls, an employee curtly informed him that the television “won’t be supplied.” No refund was ever offered.
“They simply don’t refund anything. Nobody answers you and you keep accumulating case numbers to follow up on getting a refund,” Fierros said. “Of course the credit card company was charging me all the while.”
Mexican e-commerce boomed during the Covid-19 pandemic. E-commerce natives like Amazon and Mercado Libre saw a spike in customers, but so did Mexico’s traditional brick-and-mortar retailers — many of which had been laggards in building online businesses. E-commerce in Mexico expanded by 81% in 2020, according to the Mexican Online Sales Association (AMVO), and accounts for 9% of Mexico’s total retail sales.
The transition has brought growing pains and exposed shortcomings of some traditional retailers, as they move online and struggle to manage supply chains or fail to fulfill orders. In contrast to the streamlined, one-click ease of shopping on e-commerce platforms, traditional retailers moving online are plagued by poor customer service.
“There are really few companies that were prepared to make this leap the way they did overnight,” said Alejandro Medina, a Mexican e-commerce expert. Logistics companies also “didn’t have the capacity” to deliver all the orders suddenly pouring in and had to turn away business, he said.
Tec-Check, a nonprofit consumer watchdog that monitors online sales, said that complaints about e-commerce in the country surged with the pandemic. According to data compiled by Tec-Check, most involved traditional Mexican retailers making the transition to e-commerce. And many of the complaints fit a pattern of companies failing to deliver merchandise, canceling the order, and never issuing refunds.
“These department stores were asleep at the switch for years,” said Maximilian Murck, who co-founded Tec-Check in 2017 alongside Fiorentina García.
“They didn’t have logistics systems, especially warehouse systems, so that they could properly deliver the products,” he explained. “Various sources told us, secretly, that many department stores in Mexico effectively have no system for knowing how many items they have in their warehouses.”
Both trained economists, Murck and García started Tec-Check in response to the lack of customer protection in Mexico. Murck attributes the predatory practices to rampant impunity across Mexican society, which can include everything from homicides to petty crimes to companies ripping off customers.
“That really benefits companies in the sense they can do whatever they want to,” Murck said.
Mexico does have a consumer protection agency — the Federal Prosecutor for the Consumer (Profeco) — but consumer advocates claim it’s understaffed and under-resourced, resulting in staff not always being up to speed on the rules and causing complainants to give up before their cases are processed. Companies also send in lawyers, which tilts the tables against consumers, according to Murck.
Profeco didn’t respond to interview requests for this story.
Murck and García often pool together different complaints against big retailers into a single, collective complaint at Profeco. The strategy pays off immediately.
Murck and García said that sometimes companies end up refunding the money owed, before the cases are even officially settled — it turns out they have good reason to work things out before proceedings are concluded. According to the law, Murck and García said, companies found guilty of commercial malfeasance must pay an additional compensation of 20% in the case of unfulfilled orders.
Tec-Check has been so successful with collective complaints that it “recovered more in compensation in electronic commerce and from department stores than Profeco itself” in 2020, Murck said.
The complaints have sparked pushback from Mexico’s big retailers. Counter-complaints within Profeco were filed accusing Tec-Check of failing to target foreign e-commerce players such as Mercado Libre and Amazon.
Roberto Carlos Pérez Bravo, customer attention and experience director for Claro Shop, said that the company eventually resolved its delivery issues by setting up its own service and using Uber. He added that 54% of orders were delivered on-time at the start of the pandemic — a metric now standing at 98%. Pérez Bravo said call center volume doubled to 34,000 calls in April 2020 and hit 75,000 calls in May 2020. “We obviously learned a lot from this because we were able to set up the infrastructure for attending to customers,” Pérez Bravo said.
The claim appears to be backed by a Tec-Check study that shows Claro Shop receiving less complaints than most traditional retailers over the course of 2020.
Murck has expressed misgivings over Mercado Libre’s market power, while a Reuters investigation found dire working conditions in Amazon’s fulfillment centers in suburban Mexico City. Yet, he said, consumer complaints to Tec-Check about traditional retailers vastly outstrip complaints about Mercado Libre and Amazon.
“We would be delighted to facilitate a complaint against Amazon,” Murck said. “But you can’t file a collective complaint without complainants.”
Fierros eventually turned to Tec-Check and received a refund from Claro Shop, along with additional compensation in coupons. He used them to buy a thermometer and other precautionary pandemic items. He also bought a new TV from Sam’s Club — in-person.
“I grabbed it with my hands, loaded it in my car, and carried it into my house,” he said excitedly. “I’ll never buy online again. The experience for me was traumatic.”