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Business Advice

Retailers gear up for 'lemon law'

Some have checklists for shoppers, others train staff to handle returns.
The Straits Times - August 29, 2012
By: Jessica Lim
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Retailers gear up for 'lemon law' Mrs Elsie Chow, co-owner of Teck Yin Soon Chinese Medical Hall, is dreading the “lemon law” as the chain does not have a refund policy with its suppliers. She said shoppers will be made to fill out checklists when they buy costlier items like bird’s

THE "lemon law", which kicks in on Saturday, has led to retailers drawing up plans to cushion the potential blow of refunds, repairs or replacements.

Some are drawing up checklists for shoppers to sign, others are training front-line staff to handle refunds, and a few chains will scrap the practice of selling damaged items at discounted rates.

A check with 15 retailers found that all are taking action one way or another.

Under the new law, all defects reported in faulty goods - commonly known as "lemons" - within six months of delivery are presumed to have existed at the time of delivery.

Consumers would then be entitled to repairs, replacements, reductions in price or refunds.

From next week, shoppers at T2 Mobile will be asked to fill out checklists when they buy new and second-hand phones.

"We will have staff check the phones and list any faults and the conditions of everything like the keypad, battery and charger," said T2's owner Terence Teo, 49, yesterday. "We will get the customer to sign it. We need to protect ourselves."

The three-outlet chain has also told its staff to teach customers how to look after their phones.

Wing Tai Retail, which operates 160 outlets here, including Karen Millen and Topshop, has trained 1,000 of its 1,200 employees on how the "lemon law" works.

Staff have been told to replace or repair faulty items, no questions asked. If all else fails, customers will be given store credit.

"It is difficult to ascertain that an item was sold with a defect. We hope to settle the matter there and then," said executive director Helen Khoo.

The company also plans to stop selling damaged stock at discounted prices to the public, to avoid situations where consumers try to return the damaged items.

"It is too tedious to record the damage on each item and we don't want to make customers sign forms," said Ms Khoo.

DIY chain HomeFix has trained staff to recognise products that have been tampered with.

Furniture giant Courts has met suppliers to make sure they understand their shared liability.

Supermarket chain NTUC FairPrice is updating in-store posters and receipts with explanations on how customers can get refunds.

Petmart, a pet shop in Serangoon North, now conducts pre-sale checks of pets in front of customers as even pets are covered under the law.

For example, it could apply if an illness flared up in a pet that was sold while the ailment was in its incubation period.

Experts think that the "lemon law" will be tougher on small businesses because they will find it harder to absorb the cost of replacements and they have less bargaining power with suppliers on return policies.

However, the law is expected to raise service standards in Singapore in the long run.

Mr Steven Goh, the executive director of the Orchard Road Business Association, said more retailers will introduce a no-questions-asked return policy.

"Disputes can become ugly and make a business look bad. Most would rather give a refund or exchange and compute it into their costs," he said.

The bigger picture of the "lemon law", said lawyer K. Anparasan, a partner at KhattarWong's litigation and dispute resolution department, is that it is meant to encourage best practices among retailers, not punish them.

Meanwhile, the Consumers Association of Singapore (Case) has conducted about 40 seminars to educate consumers and retailers on the new law.

"There is definitely more to be done, and it is integral that the consumer knows how to use the law. If not, it won't work," said executive director Seah Seng Choon.

How the law affects consumers

THE "lemon law", an amendment to the Consumer Protection (Fair Trading) Act and the Hire Purchase Act, comes into effect on Saturday.

This is how it works:

When you buy a defective product now, the retailer is not obligated to repair or replace it, or to provide you with a refund.

From Saturday, if a product is found to have a defect within six months of delivery, the defect is presumed to have been there at the point of sale.

Unless the retailer can prove otherwise, you are entitled to ask the seller to repair it, replace it or give you a refund.

Consumers, however, will not be entitled to any of the above if they damage or misuse an item.


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