Chapter 14. Responsible Retailing
In today’s retailing environment, a retailer must concentrate not just on selling but also on being aware of some vital duties fundamental to successful retailing. This chapter highlights three important issues.
Ethical Issues
In any customer-oriented business.
Professionalism, efficiency, speed and reliability are vital elements.
Thus it will be useful if the retailer is aware of some general retail practices which may or may not have legal implications. These practices will serve to enhance Singapore’s reputation as a shoppers’ paradise.
Here are some points to ponder on:
An ethical retailer should:
1. Display and disclose all relevant information on the price tags
2. Mark merchandise prices in Singapore currency
3. Sell merchandise at reasonable prices
4. Issue receipts for all merchandise sold
5. Provide good sales and after-sales service
6. Respond promptly to all customer complaints
7. Ensure that all employees are informed of the merchandise and store policies.
An ethical retailer should not:
1. Sell any counterfeit merchandise
2. Misrepresent any information relating to the merchandise
3. Engage touts to promote the business
4. Impose a surcharge on the use of charge or credit cards
Legal Issues
The proliferation of consumer protection, under civil and criminal law, implies that it is in the interest of all retailers to be knowledgeable about the law as it affects them in their daily dealings with customers. This section aims to give retailers some awareness of the current legal environment affecting retail operations.
The Consumer Protection (Fair Trading) Act
With the introduction of the Consumer Protection (Fair Trading) Act, consumers will be able to sue for monetary compensation by simply showing that the traders have committed dishonest practices. The Second Schedule of the Act specifies 20 unfair practices.
Generally, these unfair practices cover three main areas of trade:
1. False or misleading advertising such as:
• Hiding or lying about important product information
• Trying to attract shoppers by promoting an offer that the traders know they cannot deliver
• Using small print to conceal a material fact from the customer
2. False bargains such as:
• Lying about the duration of a promotion or a sale
• Putting up ‘closing down sale’ signs when the trader has no intention to end the business
• Raising the prices of merchandise just before a sale
3. Unethical sales practices such as:
• Harassing or pressuring people to buy a product
• Withdrawing free gifts that have been promised prior to the purchase
• Including in a consumer agreement, terms or conditions that are harsh or excessively one-sided
It is clear from the above mentioned that the trader should provide the consumer with all relevant information so as not to mislead the consumer. The consumer can then make an informed decision. As such, the trader should begin reviewing his business practices, particularly the type of information to provide or convey to the consumers.
However, consumers will not be the only ones to benefit. By marking out the minimum standards of business practices, the traders will also benefit. The Act protects traders from unreasonable consumers and unscrupulous competitors.
It is important to note that the Act covers all consumer goods and services with the exception of some transactions:
• Financial investments
• Purchase and sale of property
• Transactions with value that exceeds S$20,000
A full copy of the Consumer Protection (Fair Trading) Act may be downloaded from the Internet at www.mti.gov.sg.
I need help...: How can I Avoid the Legal Pitfalls of Irresponsible Advertising?
important for a retailer to be always mindful of the potential liability
each time it decides to advertise its product or service.
Common Irresponsible Advertising Practices of Retailers
1. Puffery
‘Puffery’ is where the advertiser describes his goods with dubious qualities using phrases such as ‘the best in the world’ and ‘super quality’. Under the Consumer Protection (Fair Trading) Act, ‘representing that goods or services are of a particular standard, quality, grade.... if they are not’ is a specific act that would be considered wrongful under the Act. Therefore, it is arguable that puffery may be caught by this prohibition.
2. Subliminal advertising
This is an advertising method that works on the subconscious of the shopper, ranging from hidden verbal communications in piped music to ultra-fast flashing images at the cinema. As far as this particular form of advertising is concerned, the Act is less clear. While there seems to be no specific reference to this form of advertising, it is possible that it may be caught under the provision in the Act which makes it unlawful for retailers to take advantage of a consumer by ‘exerting undue pressure or undue influence on the consumer to enter into a transaction involving goods or services’. This, of course, depends on whether subliminal advertising can indeed have the effect of exerting undue pressure or undue influence on a shopper.
Practical Steps to Take to Avoid Legal Liability
1. Engage a professional to design the advertisement
Choosing a reputable advertising agency will minimise the risk of liability. If the design is undertaken by the retailer or the staff, care should be taken to ensure that it does not offend competitors in any way.
2. Have a lawyer vet the proposed advertisement
Although this may seem to be an overly cautious step, it may well be one worth taking if there is any doubt at all as to whether the advertisement (whether by virtue of its content or presentation) may amount to an infringement of copyright.