Retailer LuxStyle says nothing wrong with its order process, despite new warning from Case

The Consumers Association of Singapore said that it has received a total of 37 complaints against the business since May 2017.
The Consumers Association of Singapore said that it has received a total of 37 complaints against the business since May 2017.PHOTO: SCREENGRAB FROM LUXSTYLE.DK

SINGAPORE - Danish online retailer LuxStyle said on Wednesday (Jan 9) that there was nothing wrong with its order process, despite a fresh warning by Singapore's consumer watchdog a day earlier against some of its practices.

A spokesman for Digital Sourcing, which was previously known as LuxStyle, said in an e-mail statement to The Straits Times that a purchase is made only when a customer clicks on the "order now" button.

This step comes after the customer fills in a delivery address and an e-mail address, and views the prices of the products, said spokesman Jonas Hedegaard.

The Consumers Association of Singapore (Case) said on Tuesday that it received a total of 37 complaints against the business since May 2017, with customers claiming that they were billed for purchases they did not make.

These consumers said that they had come across LuxStyle's advertisements on social media and were asked to provide their personal information before they could take a look at the prices on its website.

However, they claimed that they did not explicitly agree to buy the items they viewed.

A document detailing the order flow process, which was shared with ST by Mr Hedegaard, states that even if the customer closes the Web browser and does not select a payment method after looking at the prices, an invoice will be sent to the delivery address that the customer gave in the first step.

 

"It is technically impossible to order just by clicking on an ad or banner and filling in contact details," Mr Hedegaard said.

He added that Digital Sourcing's parent company, Lux Group, is a global cosmetics vendor with "millions of customers in 141 different markets each year".

"Due to our vast volume, we do occasionally experience consumer complaints, but these are relatively few and do not even account for a fraction of our total, global consumer base," he said.

Mr Hedegaard said that under a 90-day satisfaction guarantee, all customers are able to return their product and get a full refund up to 90 days after the purchase, even if they have used the product.

In December, Singapore consumers received letters from a debt collection agency asking them to pay for debt they allegedly owed to Digital Sourcing.

The debt collection activities prompted Case to issue another warning to consumers on Tuesday, after its first alert in May 2017.

Case is not the only consumer watchdog that sounded an alert on LuxStyle in the past two years. A check online shows statements issued by agencies in Denmark, Australia, Canada, Finland, Sweden and New Zealand, among others.

The Australian Competition and Consumer Commission received 127 complaints against LuxStyle over three months from January 2017 to March 2017. In Sweden, over 220 consumer complaints were filed in 2016.

The Danish Consumer Ombudsman also filed a police report against LuxStyle in December 2016 for violating Danish marketing practices.

But in its e-mail statement, LuxStyle said that the Danish police have not formally accused LuxStyle of any offence.

The company added that it has not been unwilling to comply with legislation in Denmark and abroad, and said that it has contacted the Ombudsman to request for a meeting to discuss the matter.

Retail expert Felicia Wee told ST that LuxStyle’s order process is not common among online retail platforms, as they would typically display product prices upfront. 

“Many even ‘shout’ prices to entice customers or to secure a click-through at least,” said Miss Wee, who is the section head of the diploma in retail management at Temasek Polytechnic’s School of Business.

“Retailers should be transparent and forthcoming with basic product information and pricing, especially if they want to secure that sale,” she added.

Miss Wee said that customers should not be charged for items they did not explicitly agree on purchasing, especially if they have not even keyed in their payment details. 

“They should not have to volunteer information in exchange for basic product information which should be made readily available on the website,” she added.

Miss Wee advised consumers to shop on familiar and trusted websites that have secure sockets layer (SSL) encryption installed. Shoppers should also check their e-mail and credit card statements regularly for any fraudulent charges made, she said.

Mr Elyson Ng, a lecturer at Nanyang Polytechnic's business management school, told ST that online shopping sites should clearly state the price of an item, shipping fees and total expected cost.

"Customers should not be charged until they key in their payment details," Mr Ng said. "A two-factor authentication can also be implemented for an extra layer of security."

He also encouraged customers to perform online searches to understand the background of a company, such as by checking the company's social media accounts for reviews from other customers, as these are indications of the company's trustworthiness.