From Cart to Court: Why Pakistan’s E-Commerce Laws Are Failing Consumers

The digital revolution has radically transformed Pakistan’s commercial landscape, reshaping how individuals buy, sell and interact with products and services. Fueled by the widespread internet access, the rise of smartphones, and younger tech-indulged population, e-commerce in Pakistan has seen explosive growth over the last decade. From Daraz and Food panda to Instagram-based entrepreneurs, digital marketplaces are now a core part of the national economy. However, this transformation has not been matched by a parallel evolution in the legal and regulatory autonomy which is meant to protect consumer rights.

Consumer protection laws in Pakistan remain fragmented, outdated and largely unequipped to deal with the dynamic and opaque nature of e-commerce. While traditional marketplaces are governed and regulated by the provincial consumer protections, digital platforms operate in a legal grey zone, shielded by the ambiguous interpretation of liability and benefitting from the slow pace of regulatory reforms. As a result, consumers often find themselves vulnerable to fraud, misrepresentation, privacy breaches and lack of redress mechanism.  One of the most basic expectations in online shopping, receiving a refund or credit for a damaged or misrepresented product, remains unmet for a large number of Pakistani consumers. Adding the challenge is the misuse of digital platforms by some consumers through false claims, fake reviews or manipulation of return policies. This has led to many companies to tighten the refund system, sometimes at the expense of genuine consumers, maybe affecting the economy in general, while the judiciary appears cautious in embracing technology driven reforms, wary of both enforcement limitations and bad faith exploitation.

E-commerce in Pakistan is no longer a novelty; it is a growing economic force. According to Pakistan E-commerce Policy of 2019, global e-commerce sales reached. $29 trillion in 2017, with Pakistan aiming to ride that wave by promoting digital trade as a tool for inclusive economic growth. Local platforms such as Daraz, OLX, and others have capitalized on the post-COVID-19 consumer shift toward contactless shopping. Simultaneously, social media platforms such as Facebook and Instagram have become informal marketplaces.

Despite the exponential rise of e-commerce in Pakistan, consumer trust remains notably low, and this distrust is mutual, with small businesses harboring skepticism towards consumers. The market is plagued with complaints ranging from counterfeit products and delayed deliveries to data misuse and the complete absence of refund or return policies. Alarmingly, a fundamental consumer right: the ability to return a defective product or receive a refund or credit, remains unmet in nearly 80% of cases. While some platforms have established internal complaint mechanisms like Daraz, these systems lack transparency, enforceability, raising concerns about access to effective redress.

The core question, then, is why this trust deficit persists. Is it the Pakistani consumer who fails to meet the expectations of good faith, or are businesses resisting evolution by negating to introduce customer-friendly credit and refund frameworks? Although fraudulent buyers certainly exist, this cannot justify the collective punishment of honest consumers through blanket no-credit policies.

Even where refund and exchange policies are offered, they are often undermined by procedural inefficiencies. The complaint process tends to be a hassle, non-transparent, and ultimately ineffective. This discourages consumers from pursuing their rights and results in widespread disengagement. When access to redress becomes unnecessarily difficult, it stops consumers from holding businesses accountable, effectively normalizing poor service standards. Moreover, the lack of consumer follow-through is often misinterpreted by businesses as acceptance, when in reality it reflects a lack of enforcement mechanisms.

On top of that, the consistent consumer spending may give businesses the illusion that systemic reform is unnecessary. Reinforcing the notion that refund, or exchange policies are not critical to profitability. This ineffectiveness perpetuates a cycle where consumer rights exist only on paper, with little incentive for businesses to improve their practices unless legal obligations or market pressures demand reform. Additionally, this also disregards the broader global trend towards consumer-centric commerce, where transparency, accountability, and ease of redress are central to brand loyalty and long-term growth.

Pakistan’s approach to digital consumer protection is diffused across multiple statues, each designed with distinct objectives and historical contexts, this fabrication of legislation, while individually addressing aspects of electronic payments security, cybercrime and consumer rights, collectively fails to form a coherent protective shield for digital consumers, each key statute renewals the misalignment between their original legislative intent and the emerging demands of e-commerce.

The electronic transactions ordinance (ETO) 2002, the ETO was Pakistanis first comprehensive attempt to validate electronic communications, contracts and signatures. Its main goal was to facilitate the seamless adoption of digital transactions by declaring that electronic records entail the same evidentiary value as traditional tangible counterparts (S.4). It also establishes a framework for licensed Certification authorities to issue signatures(ss.6-8). Despite its pioneering statues, the Ordinance contains no provisions dedicated to consumer protection.

There exist no provisions for businesses to ensure product quality, no standardized right to return goods, and no mandated dispute resolution processes. Essentially, the ETO paints the form of transaction but neglects the substance of consumer protection. In an online marketplace where the buyer may never physically inspect the good before purchasing, the absence of mandated warranties or return policies in the ETO leaves the buyer in an inevitable disadvantage. Moreover, the Ordinances technical focus on authentication and non-repudiation does not translate into remedies when a digital sale goes awry, the failure to align procedural legitimacy with substantive consumer rights highlights the ETOS critical shortcoming.

Consumer Protection (E-commerce) rules 2020, introduced under the umbrella of the Ministry of commerce e-commerce policy, the 2020 rules aim to codify basic consumer rights- entailing a transparent disclosure of seller information, clear refund and return policies, and record-keeping complaints. While these rules theoretically fill the consumer-centric gaps left by earlier statutes, however they prove to be ineffective practically. As a subsidiary of legislation, they rely on existing consumer protection entities and provincial courts for enforcement, none of them which compromises specialized digital jurisdiction or capacity. Furthermore, small-scale vendors and consumers remain largely unaware of these requirements, law, and rights. In the absence of designated enforcement authorities or digital-only consumer tribunals, the rules operate as aspirational fabrications rather than binding law.

Provincial acts, such as the Punjab consumer protection act 2005 and the Sindh Consumer Protection Act 2014, were drafted with traditional markets in mind, they define ‘goods’ as tangible products and ‘services’ as to face-to-face offerings, asserting no mention of ‘online transactions’, ‘digital platforms’ or ‘e-contracts.’ Their complaint mechanisms and consumer courts lack technical expertise to adjudicate digital disputes, resulting in judicial hesitancy applying these Acts to e-commerce. Moreover, provincial discrepancies in definitions, jurisdiction trach and procedural rules create fragmented landscapes where an online transaction between parties in different provinces may fall through the regulatory cracks. The absence of a uniform federal standard for digital consumer rights exacerbates this confusion, leaving the consumers with no statutory home for grievances.

Promulgated to regulate the burgeoning sector of digital payments, PSEFT imposes licensing requirements on electronic fund transfer operators and embeds liability rules for unauthorized transactions (ss.13–15). It mandates secure transaction protocols and details of statutory recourse for consumers in cases of erroneous or fraudulent debits. However, PSEFT’s remit ends once the money leaves the payer’s account. There is no statutory bridge linking payment failures or fraudulent debits to unfulfilled e-commerce contracts. If a consumer pays for goods that are never delivered, the only available remedy under PSEFT pertains to financial restitution for unauthorized payments, not recovery of goods or compensation for breach of contract. This siloed regulatory approach underscores a fundamental misalignment: PSEFT secures the financial corridor but remains silent on the commercial corridor that defines e-commerce.

As Pakistan’s principal cybercrime statute, PECA criminalizes hacking, identity theft, electronic fraud, and unauthorized data access (ss.3, 16–20). The Act empowers law enforcement agencies to investigate and prosecute digital malfeasance, offering consumers the prospect of criminal sanctions against online fraudsters. Yet PECA’s punitive orientation does not equate to consumer empowerment. It does not create civil causes of action or require platforms to implement proactive due diligence measures. Victims of marketplace scams must navigate a bifurcated process: first, lodge a criminal complaint under PECA; second, pursue civil litigation to recover financial losses. This burdensome dual-track remedy is impractical for the average consumer, who rarely possesses the resources or legal literacy to sustain such parallel proceedings. Consequently, PECA’s laudable objective of deterring cybercrime offers little solace to defrauded buyers burdened by a lack of streamlined restitution mechanism

This perusal of key statues highlights a systemic misalignment between Pakistan’s legal framework and the realities of e-commerce. At its core, this misalignment arises from a failure to evolve beyond the analog foundations upon which existing laws were built. While instruments like the Electronic Transactions Ordinance (ETO) 2002 offer formal recognition to digital contracts, they remain hollow in terms of fundamental consumer safeguards. The payment systems and electronic fund transfers act (PSEFT) 2007 ensures the technical safety of transactions but fails to impose obligations on sellers or platforms to guarantee commercial fulfillment. The prevention of electronic crimes act (PECA) 2016, although powerful for cybercrime, is narrowly tailored towards criminal enforcement and does not empower consumers with private redress for online fraud and scams.

Meanwhile, the consumer protection (E commerce) rules 2020 and provincial consumer protection act remains under-enforced, outdated or entirely silent on the digital marketplace, per se, the Punjab Consumer Protection Act 2005 does not even contemplate ‘digital transactions’ or ‘online marketplaces,’ which substantively eradicates the majority of consumer grievances from its jurisdiction. As a result, Pakistani online consumers are left navigating in an abstract zone, acknowledged by the law, but left with no procedure and protection. This nuanced legislative framework paints a deeper issue, the lack of a unified consumer centric legal regime that addresses the unique features of e-commerce.

A Pakistani equivalent should embed the following features; a statutory recognition of digital consumers where legal definitions are clearly stated and distinguished between digital consumers rights and their transactions involving e-commerce. Secondly, platforms should be held jointly responsible for seller misrepresentations and implement transparent mechanisms for verifying sellers and handling consumer grievances. Additionally, digital transactions generate massive amounts of consumer data. A strong overlap with data protection laws is necessary to ensure privacy and curb unauthorized use of personal information. Coupled with law implementation strategies per se consumer literacy campaigns, a simplified filing system and a regulatory coordination between SECP, PTA and consumer courts.

Streamlined Online Dispute Resolution (ODR) mechanism. Rather than forcing aggrieved buyers into a dual track of criminal complaints under PECA and slow civil litigation in consumer courts, Pakistan should establish a centralized ODR portal where consumers can file, track, and resolve e‑commerce disputes entirely online. Such a system would mirror India’s e‑Daakhil platform: consumers submit complaints digitally, businesses respond through the portal, and a neutral adjudicator issues a binding decision within a fixed timeframe. To ensure accessibility, the ODR portal should incorporate regional‑language interfaces, video‑assisted hearings for complex cases, and automatic workflows for refunds or exchanges once liability is determined. Embedding ODR into law—and tying it to mandatory platform compliance—would not only reduce enforcement paralysis but also cultivate consumer trust by delivering fast, low‑cost, and transparent relief for defective products, fraudulent listings, or data‑privacy violations in Pakistan’s e‑commerce sector.

The global approach to digital consumer protection reveals a growing recognition of unique challenges set by intangible goods and online platforms. Jurisdictions such as the EU undertook profound shifts, most recently with the Digital Services Act (DSA), which places due diligence obligations on platform to trace third party sellers and promptly respond to consumer complaints. This deciphers a clear shift from broad liability exemptions platforms once enjoyed. Averse to, Pakistan imposes no meaningful obligation on digital to scrutinize sellers’ to informs users of their rights, encouraging a culture of impunity. The gap becomes starker when viewed parallel to cases like Green v Petfre (Gibraltar) Ltd [2019] EWCA Civ 854,where UK courts scrutinized misleading practices in the digital economy,

However, one central legal question remains unresolved in many jurisdictions, including Pakistan: Should software and digital content be classified as “goods” to enable consumer claims under traditional protection laws? This definitional issue is crucial. Statutes such as Pakistan’s Sale of Goods Act 1930 or the UK’s Consumer Rights Act 2015 hinge legal remedies on whether a product qualifies as “goods.” If digital content falls outside this scope, consumers are left without statutory protection. The UK addressed this uncertainty in The Software Incubator Ltd v Computer Associates UK Ltd [2022] UKSC 30. where the Supreme Court held that electronically supplied software could constitute “goods” under the Commercial Agents Regulations.

Pakistan, however, lacks both legislative clarity and judicial precedent on this matter. The absence of guidance leaves consumers in a regulatory vacuum, particularly vulnerable in digital purchases where the boundary between physical and intangible goods continues to blur. This ambiguity hinders consistent enforcement and reinforces the need for statutory reform or judicial intervention to modernize consumer protection frameworks.

The evolution of consumer protection in the digital sphere demands more than rhetorical commitments—it requires legislative precision and judicial responsiveness. As global jurisdictions move toward reclassifying digital content within the ambit of “goods” and imposing due diligence obligations on platforms, Pakistan lags behind in both definitional clarity and regulatory oversight. The silence of both courts and lawmakers leaves consumers exposed in an increasingly intangible marketplace, where transactions are invisible, terms are buried in fine print, and accountability is often diffused across borders.

Bridging this gap calls for a deliberate recalibration of legal definitions and obligations, ensuring the law reflects the lived realities of modern commerce rather than the inertia of outdated frameworks. In a world where a faulty download can be as damaging as a defective product and where platforms shape consumer choices as much as sellers do, the law must evolve with the marketplace it seeks to regulate. Consumer protection, at its core, is about fairness and trust and without meaningful reform, both remain fragile in Pakistan’s digital economy.

Bibliography:

Cases

Green v Petfre (Gibraltar) Ltd [2019] EWCA Civ 854.

The Software Incubator Ltd v Computer Associates UK Ltd [2022] UKSC 30.

Legislation – Pakistan

Consumer Protection (E-Commerce) Rules 2020 (Pakistan).

Electronic Transactions Ordinance 2002 (Pakistan).

Payment Systems and Electronic Fund Transfers Act 2007 (Pakistan).

Prevention of Electronic Crimes Act 2016 (Pakistan).

Punjab Consumer Protection Act 2005 (Pakistan).

Sindh Consumer Protection Act 2014 (Pakistan).

Sale of Goods Act 1930 (Pakistan).

Legislation – Foreign

Consumer Rights Act 2015 (UK).

Digital Services Act (Regulation (EU) 2022/2065 of the European Parliament and of the Council of 19 October 2022 on a Single Market for Digital Services).

Commercial Agents (Council Directive) Regulations 1993 (UK).

Policy Documents and Government Publications

Government of Pakistan, E-Commerce Policy Framework (Ministry of Commerce 2019).

Secondary Sources

European Commission, ‘The Digital Services Act Package’ (European Commission, 2022).

Amnesty International, Pakistan: Cybercrime Legislation and Human Rights (Amnesty International Report).

Human Rights Watch, Pakistan: Digital Rights and Online Regulation (HRW Report).