- Joined
- Jan 23, 2010
- Messages
- 1,746
- Points
- 0
'Lemon law' may squeeze small retailers
Shops worry customers may exploit refund rule for defective goods
By Jamie Ee Wen Wei
SMALL retailers are bracing themselves for proposed changes to consumer protection laws that will make it compulsory for them to replace or repair a defective product.
The changes to the Consumer Protection (Fair Trading) Act and the Hire Purchase Act that the Ministry of Trade and Industry proposed last week would empower consumers to demand remedy when goods are not of 'satisfactory quality'.
Most small retailers do not have a clear exchange or refund policy and address the issue only on a case-by-case basis. They are worried consumers might abuse the new law.
Under it, if repair or replacement takes too long and costs too much, the buyer would have the right to ask for a price reduction - or a refund. Such 'lemon laws' are standard in most industrialised countries. The Singapore amendments are modelled after British regulations.
A Straits Times check with 10 small retail shops from a range of sectors revealed that most do not have an exchange or refund policy. But they also said they do not regularly get customers with such demands.
Mr James Tan, 34, who runs two mobile phone shops at Lucky Plaza, tells his customers upfront that they will not be given refunds. They are asked to check their sets before paying for them because they do not come with warranties.
He does make exceptions, though. 'If the phone is in very good condition and the customer hasn't used it, we can replace it or help to repair it,' he said.
Some retailers say they just do not have the margins to make exchanges or refunds feasible. Madam Chan Huey Hoon, 50, who owns an accessories shop in Raffles Place, said: 'We are not like big companies. We don't have huge profit margins to be able to do exchanges.'
'If every customer wants to exchange products they buy after a few days, it wouldn't be fair to retailers, both big and small,' she said.
Furniture shop owner Kim Low, 30, feels that the term 'defect' needs to be clearly defined. 'If it is clearly our fault, we will replace the item or repair it for our customer,' she said. 'But some customers demand it to be perfect, which is not possible.'
Major retailers feel differently. Welcoming the proposed law, they say it will lift the industry by weeding out substandard products and services.
Mr Terry O'Connor, CEO of Courts Asia, said it would not impact the company because it works with established and major brands. He added that it already has consumer practices and resolution policies in place.
The furniture chain has a seven-day exchange or return policy for customers who are not satisfied with their products. Newly bought items will be replaced immediately. If the customer does not want a replacement, he will be given a refund.
Local shoe and bag retailer Charles & Keith also has a seven-day return policy for defective products. The item is assessed before being repaired or exchanged. But no refunds are offered.
A small watch retailer whose owner wanted to be known only as Mr Tan, 50, said that although he does not allow exchanges, he offers customers a one- or two-year repair service at his Tanjong Pagar shop.
He is worried about customers who may take advantage of the law. 'Some customers are very fickle-minded. They may not like the colour or design of the watch and will try to find fault with it to get it replaced,' he said.
Customers, however, feel retailers need to have such policies in place.
Mr Ng Khee Jin, 48, managing director of an advertising agency, recently bought a 'lemon' $400 Nokia mobile phone from a shop at Funan DigitaLife Mall. He discovered it was faulty after he reached home.
When he tried to return it, he was told that exchanges were not allowed - even though the phone was brand new and had not been used. Instead, he was told to take it to the service centre. It has still not been fixed.
'If I had bought it from a big department store, I don't think it would have been an issue,' he said. 'It's a question of accountability. As customers, this is the minimum protection we deserve.'
[email protected]
LEAVING A SOUR TASTE
'We are not like big companies. We don't have huge profit margins to be able to do exchanges.'
Madam Chan Huey Hoon, 50, who owns an accessories shop in Raffles Place
Shops worry customers may exploit refund rule for defective goods
By Jamie Ee Wen Wei
SMALL retailers are bracing themselves for proposed changes to consumer protection laws that will make it compulsory for them to replace or repair a defective product.
The changes to the Consumer Protection (Fair Trading) Act and the Hire Purchase Act that the Ministry of Trade and Industry proposed last week would empower consumers to demand remedy when goods are not of 'satisfactory quality'.
Most small retailers do not have a clear exchange or refund policy and address the issue only on a case-by-case basis. They are worried consumers might abuse the new law.
Under it, if repair or replacement takes too long and costs too much, the buyer would have the right to ask for a price reduction - or a refund. Such 'lemon laws' are standard in most industrialised countries. The Singapore amendments are modelled after British regulations.
A Straits Times check with 10 small retail shops from a range of sectors revealed that most do not have an exchange or refund policy. But they also said they do not regularly get customers with such demands.
Mr James Tan, 34, who runs two mobile phone shops at Lucky Plaza, tells his customers upfront that they will not be given refunds. They are asked to check their sets before paying for them because they do not come with warranties.
He does make exceptions, though. 'If the phone is in very good condition and the customer hasn't used it, we can replace it or help to repair it,' he said.
Some retailers say they just do not have the margins to make exchanges or refunds feasible. Madam Chan Huey Hoon, 50, who owns an accessories shop in Raffles Place, said: 'We are not like big companies. We don't have huge profit margins to be able to do exchanges.'
'If every customer wants to exchange products they buy after a few days, it wouldn't be fair to retailers, both big and small,' she said.
Furniture shop owner Kim Low, 30, feels that the term 'defect' needs to be clearly defined. 'If it is clearly our fault, we will replace the item or repair it for our customer,' she said. 'But some customers demand it to be perfect, which is not possible.'
Major retailers feel differently. Welcoming the proposed law, they say it will lift the industry by weeding out substandard products and services.
Mr Terry O'Connor, CEO of Courts Asia, said it would not impact the company because it works with established and major brands. He added that it already has consumer practices and resolution policies in place.
The furniture chain has a seven-day exchange or return policy for customers who are not satisfied with their products. Newly bought items will be replaced immediately. If the customer does not want a replacement, he will be given a refund.
Local shoe and bag retailer Charles & Keith also has a seven-day return policy for defective products. The item is assessed before being repaired or exchanged. But no refunds are offered.
A small watch retailer whose owner wanted to be known only as Mr Tan, 50, said that although he does not allow exchanges, he offers customers a one- or two-year repair service at his Tanjong Pagar shop.
He is worried about customers who may take advantage of the law. 'Some customers are very fickle-minded. They may not like the colour or design of the watch and will try to find fault with it to get it replaced,' he said.
Customers, however, feel retailers need to have such policies in place.
Mr Ng Khee Jin, 48, managing director of an advertising agency, recently bought a 'lemon' $400 Nokia mobile phone from a shop at Funan DigitaLife Mall. He discovered it was faulty after he reached home.
When he tried to return it, he was told that exchanges were not allowed - even though the phone was brand new and had not been used. Instead, he was told to take it to the service centre. It has still not been fixed.
'If I had bought it from a big department store, I don't think it would have been an issue,' he said. 'It's a question of accountability. As customers, this is the minimum protection we deserve.'
[email protected]
LEAVING A SOUR TASTE
'We are not like big companies. We don't have huge profit margins to be able to do exchanges.'
Madam Chan Huey Hoon, 50, who owns an accessories shop in Raffles Place
