Singapore’s reputation as shopping haven damaged by shady salesmen

City state’s reputation as shopping haven dented as tourists fall foul of shady sales tactics

With its hi-tech, safe and modern shopping paradise image, Singapore has long attracted tourists from around the world keen to splurge on the latest smart phones and other fancy electronic gadgets.

So when Vietnamese tourist Pham Van Thoai came to Singapore last November, one of the first things he did was to head to Sim Lim Square, a shopping mall regarded as the affluent city-state’s version of Akihabara, a district in Tokyo packed with electronics shops.

The factory worker, who had saved for a few months with his wages of about US$150 a month to buy an iPhone 6 for his girlfriend, had never expected his shopping outing would turn into a nightmare.

After having paid S$950 (HK$5,500) for the phone at one of the small shops at the mall, he was also asked to pay S$1,500 for the warranty card. When he tried to walk out of the deal, the shop refused to refund his money. Distraught, he broke into tears and even fell to his knees to beg for his money back. Someone took a video of the scene, and it went viral on the internet, sparking outrage within minutes in the online community.

However, the shop was adamant even when the police and officials from the Consumers Association of Singapore intervened and would only offer a partial S$400 refund to Pham.

Coincidentally, the same shop had also been in the news a few months earlier for paying a refund of S$1,000 to a Chinese national – in small coins only – after the Small Claims Tribunal ordered it to refund the customer who had lodged a complaint for having to pay S$1,400 more than she expected when buying a mobile phone there.

Some small shops at the mall, especially those riding on the back of the smartphone craze, have been engaging in dubious sales tactics and overcharging customers, for years.

Most locals, having heard of the risks, tread warily when they shop there, but many tourists are still not aware and often walk into such traps.

Aside from Sim Lim Square, two more shopping complexes in Singapore – People’s Park Complex in Chinatown and Lucky Plaza in Orchard Road – have been identified as having an alarmingly higher incidence of complaints lodged by customers. Singapore’s Minister of State for Trade and Industry Teo Ser Luck told parliament on Monday that over the last three years, there have been 2,000 complaints lodged against retailers in these three shopping malls alone.

“Foreign tourists are the best target because they don’t have time to complain,” said entrepreneur Gabriel Kang, who set up a crowd funding campaign to raise funds to help the Vietnamese tourist.

“The law needs to change,” he said, while calling for the Consumer Association of Singapore and police to crack down. “Every month these people are cheating millions of dollars. How come they can continue business?”

Pham Van Thoai was made to beg for his money. Photo: You Tube

In the wake of the two incidents, China’s Foreign Ministry and also Vietnamese newspapers warned tourists from their countries to be cautious when purchasing electronics in Singapore.

“Shopping paradise gets a kneecapping. It just takes a few bad sheep for Singapore’s tourist destination status to go to the dogs,” The Straits Times, Singapore’s main English-language newspaper, said in an article after the incident.

That concern was also echoed in Singapore’s parliament on Monday. One legislator, Irene Ng, asked “whether the bad publicity arising from errant retailers in Sim Lim Square has affected the international reputation of Singapore as a tourist destination and shopping hub”.

Almost 10 legislators took up the issue, wanting to know whether the government will step up enforcement action to prevent such acts by errant retailers in Singapore.

Teo pledged that the government “will review the current legislation to strengthen the law so that quicker action can be taken”. It would also try to prevent errant retailers from forming new companies, he said.

“We need to take action against such retailers who affect consumer confidence and dent Singapore’s reputation,” Teo said. The government will study the best practices and experiences of places such as Hong Kong and Australia, and aims to conclude the review and make the changes this year.

Seah Seng Choon, executive director at the Consumers Association of Singapore, said in an email reply to Kyodo that “there are a large number of complaints involving Sim Lim Square as these few errant retailers at the mall often take advantage of tourists and foreigners who are unaware of the reputation of Sim Lim Square or do not speak or understand English properly”.

Seah said they made use of unfair practices such as misleading claims or false claims to persuade consumers to sign on the dotted line and part with their money. One of their tactics was to persuade consumers to sign a contract and add on extra costs, such as the warranty, later. If confronted by the customer, they would claim that it was a case of “willing seller, willing buyer”.

When blacklisted, these shops resort to hiding their names and unit numbers, closing down their business and setting up a brand new company under a different owner.

Sim Lim Square’s management has reportedly said there are about 10 “black sheep” out of more than 500 retailers at the mall.

Muhammad Furqan Khan, who runs a small kiosk that trades in second-hand smartphones and repair services just outside the entrance to Sim Lim Square, said his business had plunged as much as 80 per cent after the recent incident.

“This problem has already been going on for four to five years. But not all shops are like that, only a small number, maybe 10 to 15 shops in this whole building,” he said.

As his shop sits strategically at the entrance to the mall, he “always gets customers who don’t have time”.

But those who do have time to look around would “ask me why I charge $S400 for a second-hand phone when there are shops inside selling a brand new phone for only S$400,” he said, explaining the sales tactic used by shops of appearing to offer much cheaper prices to lure unsuspecting customers.

“Many of them end up being cheated inside there. Because my shop is here, just outside, everybody comes to ask me for help … I see many people come out crying,” he said.

Khan, 48, who has run his business at the site since the 1990s, observed that in the early 1990s, the mall was very popular place to buy computers and computer parts, and was often crowded.

“Tourists from all over the world knew that Sim Lim Square was famous for IT,” he said.

Nowadays, the focus has shifted to smartphones.

“Many tourists, especially those from neighbouring Southeast Asian countries, like to buy smartphones when they come to Singapore because prices tend to be cheaper here than in Europe; cheaper than in other Asian countries,” he said.

“Tourists from other less-developed Asian countries also feel they get the latest model faster here by two or three months. The government has been very slow to take action … It’s too late now. It it’ll take many years to bring back the name.”