Sunday February 17, 2013

What’s the deal with deal sites?

Stories by LISA GOH
lisagoh@thestar.com.my

If the deal sounds too good to be true, go back to the end-provider or supplier to check if the offer is genuine.

FINDING the perfect rocker for your newborn baby, at a reasonable price, is no easy feat.

So when Ann Yap, 35, came across a Fisher-Price Newborn to Toddler Portable Rocker at a discounted price on a deal site, she jumped at the offer.

“I heard about the deal from a mother's forum. The deal site promised a free rocker if the main purchaser could find three other people to shop under the same link.

“So I got together three other mothers to buy the rockers and share out the savings (from the free rocker). I paid RM189 for it. Normal retail price is over RM300,” relates Yap, an accountant.

The purchase was made in November at the deal site itself, and collection was to be made at the end of December.

“We later found out that another mother had bought a similar baby rocker from the same deal site and discovered that hers was not a genuine product.

“We got worried so we contacted Fisher-Price directly. They told us they had received such complaints before, and that products sold through these deal sites could not be genuine as the prices were far too low. They also gave some pointers to identify a genuine product from a counterfeit.”

Upon collection, the rocker was inspected according to Fisher-Price's specifications and found to be a counterfeit.

“The colour was a different shade from the original, and the safety buckle did not have an embossed Fisher-Price logo, unlike the original product. It was also very flimsy,” Yap says.

The mothers refused to accept the counterfeit products, informing the deal site that they had checked directly with Fisher-Price. The deal site agreed to a refund.

“But what about buyers who do not take the initiative to double-check? They would have accepted a dud with compromised safety standards for their precious babies,” Yap says.

“I am disgusted that people would do such a thing for a baby's product. It's really unacceptable! If we didn't know the rocker was a fake, we would have exposed our babies to unnecessary risks just by using it.”

<b>Ravin:</b> ‘If the deal sounds too good to be true, that should sound the alarm bells that something is not quite right somewhere’.

Ravin: ‘If the deal sounds too good to be true, that should sound the alarm bells that something is not quite right somewhere’.

Besides baby products, many other items have also been found to be counterfeit.

Makeup blogger Sue, 36, says she has her suspicions about the cosmetic products offered on some sites as their prices were extremely low.

“I got curious, so I started reading the fine print and checking out who the suppliers were,” she says.

Cosmetics in Malaysia are only brought in by a few official distributors (such as Sephora and Suria Meriang Sdn Bhd), but these were not the suppliers listed on the deal sites.

“Some of the suppliers don't even have a proper company name, others only have mobile phone numbers as contacts. When I ran a check online, many of them appear only on a variety of deal sites but nowhere else. It just seems very dodgy to me,” Sue says.

“As for the products, some have been found to be counterfeit but they are marketed as original (using photographs of the original product), which is wrong.”

One makeup product which has been sold by the hundreds, if not thousands, is the Urban Decay Naked2 eyeshadow palette, a cult favourite among beauty circles.

In Malaysia, Urban Decay is brought in only by Sephora, and the Naked2 palette is priced at RM179. The palettes sold on the deal sites are priced between RM70 and RM80 each.

Products from other brands, such as Bobbi Brown and Estee Lauder, have also been found on some deal sites.

According to Paul Slavin, managing director of Estee Lauder Companies Malaysia, brands such as Estee Lauder, Clinique, MAC, Bobbi Brown and La Mer are “wholly owned by Estee Lauder Companies, which is based in the United States”.

“We distribute our own brands, and for some of our smaller or specialist brands, we appoint a local distributor. We do not sell any makeup, skincare or fragrance via online deal sites,” he says in an email interview.

Slavin adds that even if the products sold are OEM (original equipment manufacturer), the deal sites are not allowed to market them as an original product.

“Not without our express approval, since we own the copyright and/or trademark of the brand names, the product names and the photography,” he says, adding that legal action can and has been taken against some deal sites before.

(It is learned that many beauty companies practise contract manufacturing', whereby their products are manufactured by another company according to the standards set by the brand. However, the licence to use the brand name, and the right to sell the product, is held exclusively by the brand and its official distributors.)

Drina Chee, regional marketing director for Sephora Asia concurs.

“Urban Decay is an exclusive brand with Sephora, and as with all exclusive brands, Sephora is the sole retail channel. It would be best to purchase the products from brand-approved retail channels, whether online or in stores,” she says in an email interview.

Ann is not alone in her complaint about certain deal sites. The National Consumer Complaints Centre (NCCC) registered over 400 complaints against some 10 deal sites between September and December last year, with 61% of them lodged over the issue of quality.

This year, as of Jan 22, NCCC has received over 100 complaints pertaining to deal sites.

“Of course, not all the complaints are serious ones. Some are about delivery (late or no delivery),” says NCCC deputy director K. Ravin.

“When we contacted the sites, some were quite professional but some did not even acknowledge the complaints. They don't even get back to us.”

Food deals seem to be the least problematic, he says. “There are usually no problems with food deals. They seem genuine enough. It's usually new restaurants trying to woo customers.”

Misleading information

Not so for beauty or spa packages, where many complaints revolve around misleading information.

“For example, a facial package, which is originally priced at RM2,000, is being offered at RM150. It sounds really good, but when you get there, there are other things you need to pay for before you can get the package at RM150. In the end, the customer may still have to fork out close to RM2,000. That is misleading,” Ravin says.

This is not a matter to be taken lightly, as misleading consumers is running foul of the law, says lawyer Sankara Nair.

“We have laws to protect consumers, such as the Consumer Protection Act 1999. If a fake product was represented to be an original, it is outright fraud.

“It does not matter whether the transaction took place over the Internet or directly. The impact and effect is the same,” he says.

Section 10(1)(a) of the Consumer Protection Act, for example, states that “No person shall make a false or misleading representation that the goods are of a particular kind, standard, quality, grade, quantity, composition, style or model”.

So in such cases, who is the liable party?

“The deal sites, because they are in the best position to know if they are getting their supplies from a supplier of original products. It is incumbent upon them and they cannot just absolve themselves from responsibility,” Sankara says.

He adds that “a mere exclusion clause is not an automatic defence or exclusion of one's liability”.

“It doesn't take a lawyer to write a sentence to say I'm not liable'. But you have an element of responsibility when you make a representation as a vendor. There is a legal and moral responsibility on you to represent it correctly, accurately and honestly.

“It's a common law principle, and it has been established that a mere exclusion clause does not automatically absolve you from liability,” he says.

On the other hand, there is caveat emptor (buyer beware).

Duty to check

“There is a duty on buyers to check before they buy. Under such circumstances, they cannot sue the original manufacturers or brands, because they take the risk in believing the representations made by the deal sites,” Sankara explains.

With Internet retailing growing from strength to strength, this is a matter consumers should be aware of.

According to Euromonitor International, in a report published last February, Internet retailing (which includes deal sites) in Malaysia saw a 13% value growth in 2011 to reach sales of RM842mil, from the year before.

Consumer electronics and video games hardware Internet retailing were the biggest product area in 2011, accounting for sales of RM256mil, followed by media products at RM222mil. Apparel Internet retailing accounted for RM191mil of sales, while food and drink, and beauty and personal care Internet retailing accounted for sales of RM67mil and RM8mil respectively.

Euromonitor forecasts that Internet retailing here will be worth some RM1.7bil by 2016.

Ravin has this advice to share with consumers.

“Whatever the product or service you are buying from these deal sites, always go back to the end-provider or supplier to check if the offer is genuine. I personally practise this.

“For example, if a deal site is offering an 80% discount for a night's stay in Hotel A, call up the hotel directly and ask them if there is such an offer. By doing so, you are minimising your chances of getting cheated.”

Sometimes, Ravin adds, all it takes is a little common sense.

“The deal has to sound reasonable. Logically, how can a RM2,000 product be sold for only RM150? That's more than a 90% discount.

“If the deal sounds too good to be true, that should already sound the alarm bells that something is not quite right somewhere,” he concludes.

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Sunday February 17, 2013

What’s the deal with deal sites?

Stories by LISA GOH lisagoh@thestar.com.my

Stories by LISA GOH
lisagoh@thestar.com.my