"Lemon law" to kick in on Sep 1

SINGAPORE : Singapore's "lemon law" will kick in on September 1.

The new legislation will provide more options through additional remedies, such as repair and replacement, and provide greater clarity on the burden of proof for defective goods.

The lemon law will have a two-stage recourse framework for consumers. At the first stage, consumers may ask the seller to replace or repair the defected goods within a reasonable period of time. But if this isn't possible, consumers can move on to the next stage, where they can keep the defected goods and ask for a reduction in price or return them for a refund.

Currently, the exchange or refund policy can differ between retailers. Some shops may offer up to seven days to exchange products, while others have a strict "no refund" policy.

Customers at Swedish furniture giant IKEA have all along been benefiting from its 100-day return policy.

This means that if customers change their mind on purchases, they can return the items within 100 days from the date of purchase.

With the lemon law in place, they will now have up to six months to take action on any defective product.

Most customers welcome the lemon law.

One customer said: "When there was no such law, I would not be bothered to go back and change (the item), because I am afraid there will be this and that, a lot more issues. So, now that there is such a law, I will definitely bring it back to change."

Another commented: "That is something they do in the US already...And I think it is nice, actually. It is good for business also because in the end, people would end up buying more because they know they can always return them."

Others were concerned that some may abuse the law.

One person said: "What the retailers can do is actually state the terms and conditions clearly, and maybe state it on the cashier counter and on the receipts. Everything should be black and white, and have no grey areas, so that consumers can better know what is a defective product and they can exchange the product."

Minister of State for Trade and Industry Teo Ser Luck said: "With the new lemon law, consumers and retailers now have more options of recourse for defective goods.

"I encourage everyone to familiarise themselves with the provisions under the law. At the same time, we also want to ensure that businesses are not subject to frivolous claims and that limitations and safeguards are in place."

The government will monitor how smaller retailers adjust to the new law.

The Ministry of Trade and Industry (MTI) will gather feedback for some three months and work towards closing gaps, if any.

Mr Teo said: "For smaller retailers, sometimes, it is harder to implement some of the good, excellent measures of the major retailers because of cost issue, because of volume, because of the type of products.

"We will be monitoring the smaller retailers, their responses and how they manage the process more carefully, because we want to make sure that it actually enhances the experience for them, it actually helps them in their business."

Mr Teo added : "It is important to let the law be implemented and accumulate enough experiences for the retailers as well as consumers. And then we monitor and see what is the outcome, how is it done, and then we can figure out what are the gaps to close, if there are any gaps, and figure out some of the measures or counter measures, and see how we can help the smaller retailers or even the consumers go through with the transactions."

To help reduce the impact on business, Mr Teo encouraged smaller retailers to focus on building personalised relationships with customers.

To make it easier for customers to track their purchases, customers of electronics, furniture and IT retailer Courts, can now access their product purchase information online, or 'e-receipts' - so they do not have to worry about losing receipts, which are usually required as proof of purchase.

These 'e-receipts' allow them to easily retrieve vital information such as product purchase dates.

The MTI and the Consumers Association of Singapore (CASE) have organised some 40 seminars and roadshows to brief consumers and retailers on the new law.

MTI said 15 additional briefing sessions are expected to be held over the next two months.

MTI has also worked with CASE and various trade associations to develop lemon law consumer guides.

These will explain the consumers' rights under the law, and the limitations and safeguards against frivolous claims. These guides will be available at supermarkets, and places like community centres and shopping centres.

Cash is still king for some retailers

SINGAPORE: As card issuers Visa and MasterCard gave in to a settlement with merchants in the United States following an anti-trust lawsuit - allowing them to charge customers more when they pay with credit cards - retailers here are also feeling the squeeze as consumers increasingly go cashless, even with purchases for everyday items.

Previously, Visa and MasterCard prohibited merchants around the world from passing on credit card transaction fees to customers - the rule was even written into law in some American states. Merchants are also not allowed to impose minimum purchase requirements for credit card payments.

In Singapore, these rules are stated in the contract that merchants sign with the acquiring banks, which process the credit card payments. Swipe fees here are at least two to four per cent of each credit card transaction.

A check by MediaCorp showed that retailers, especially mom-and-pop stores, are coming up with creative ways to work around the rules, such as discounts or other perks to encourage customers to pay by cash. Some are openly flouting them, taking advantage of the low level of awareness among consumers.

On thin-margin businesses, small purchases made by credit cards are unprofitable. Gaming shop Tec-Drome at Sim Lim Square offers customers a discount on video games if they pay by cash. Owner Woo Liah Meng said it would otherwise be "terrible doing business".

According to Mr Woo, the swipe fees have increased for his business over the years, from one per cent to the current four per cent per transaction.

"I couldn't continue like that, especially these days customers pay everything using credit card, even if it's a small amount. How to survive?" he said.

He added that many other retailers at Sim Lim Square also tell customers to withdraw cash from an ATM when they ask to pay by credit card.

Curtains shop MGL Curtains also started offering a discount for customers in the past year if they pay by cash or Nets.

Italian restaurant Porta Porta, which has two outlets, waives the service charge when customers pay by cash. The restaurant, which has been in business for 13 years, started this practice this year.

"We get to save on the (swipe fees) and, at the same time, reward our customers. So it's a good deal," said owner Daniel Naino, who is paying about two per cent for Visa and MasterCard transactions, and 3.3 per cent for American Express transactions.

While these merchants do not violate any rules by offering incentives to customers who pay by cash, many others do by putting up signs informing customers that they must chalk up a minimum purchase in order to use their credit cards.
Consumers in the dark

The number of credit card transactions are on the rise.

MasterCard figures show that, during the first month of the Great Singapore Sale this year - which ended last Sunday - the number of transactions increased by 15.4 per cent to almost 5.45 million, compared to the same period last year.

On average, consumers are also spending more: According to Credit Bureau (Singapore) statistics, the average monthly balance last year was S$4,807, up by 4.45 per cent compared to 2010.

Without providing figures, a MasterCard spokesperson told MediaCorp: "We do believe that small-value credit card transactions are on the rise as we continue to see an increase in consumers using electronic payments for everyday purchases."

Enforcement actions are only triggered by complaints: Acquiring banks here will serve errant merchants a warning letter based on tip-offs.

What many consumers are not aware of is that they can lodge complaints against retailers who impose credit card surcharges or demand minimum purchases.

While banks here put the onus on consumers to know their rights, Consumers Association of Singapore (CASE) Executive Director Seah Seng Choon reiterated that public education efforts should be stepped up.

Pointing out that the number of such complaints to CASE have been small due to the lack of awareness, Mr Seah said: "Banks need to be a lot more explicit in informing customers about their rights, so that consumers don't pay different prices for the same product or be inconvenienced by the need to pay cash only."

Group-buying deals: A raw deal? 32 complaints in 2011

Bank executive Jeff Lim thought his mid-January holiday was a done deal. He had booked a hotel in Bali last May, and bought air tickets to the Indonesian resort island.

But just three days before he was supposed to fly, the travel agent told him that his hotel coupon - which he had purchased from group-buying website Deal.com.sg - could not be redeemed.

Complaints from consumers about being unable to redeem their coupons as advertised are a growing concern. Last year, the Consumers Association of Singapore (Case) received 32 complaints from customers of three popular group-buying sites: Groupon.sg, Deal.com.sg and BigDeal.sg. The previous year, it had received none.

Some of the common complaints are: customers not being able to make appointments for the services they paid for, and getting a different product or service to that advertised.


COMPLAINTS

• Last year, the Consumers Association of Singapore (Case) received 32 complaints from customers of three popular group-buying sites - Groupon.sg, Deal.com.sg and BigDeal.sg. The previous year, it had received none. 
• The common complaints include customers not being able to make appointments for the services that they paid for, and getting a different product or service to that advertised.

Recourse for consumers
WHAT should one do when a seemingly good coupon deal turns into a dud?

Such deals usually involve consumers buying coupons on websites which are redeemed by businesses providing a particular product or service.

Lawyer Suresh Divyanathan, the head of law firm Oon & Bazul's commercial arbitration practice group, said that usually in such cases, the contract made is between the consumer and the website, and not the merchant.

However, he said there may be scope under the Contracts (Rights of Third Parties) Act to seek redress from the merchant who offered the deal.

He explained: 'If a website and a merchant make a contract to provide a product or service to a consumer, the consumer can hold the merchant liable.'

He added, though, that the merchant is not obliged to give a full refund.

Consumers can approach the Consumers Association of Singapore (Case) for help in negotiating with the businesses.

Mr Seah Seng Choon, executive director of Case, said: 'If the business engages in unfair practice, the consumer can take it to task or Case will be able to take appropriate actions... under the Consumer Protection (Fair Trading) Act.'