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The Council has received 9 consumer complaints against the company during the past 6 months

  • 1998.01.22

The Council has received 9 consumer complaints against the company during the past 6 months. The amount of money which the complainants have paid out totalled $5,430.

The number of complaints - and the money involved - represents probably only a small fraction of the volume of business which this company conducts regularly through such misleading trade practice at its Shamshuipo store.

The company in question is operating under the name of :
           Kat Lam Trading Company 
           189 Apliu Street
           Ground Floor
           Shamshuipo
           Kowloon

Consumer should take note and be alerted to the pitfalls of such sales tactic which have emerged in recent years in Hong Kong.

The modus operandi adopted by the operator involved building up excitement and expectation of the potential customers present with offers of attractive bargains and free gifts of high value.

According to the complainants, the operator would first entice the crowd by the offer of free gifts of expensive electronic goods - for example, a handheld television set.

After creating the impression that every customer would receive the expensive gift and holding their interest, the operator would begin his sales pitch with bargains of goods supposedly well below market prices - paying just $20 to $30 to buy goods worth $600 to $800 in other stores. The fact is: the goods are worth not more than the selling price.

After this initial round of cheap sundry sales, the operator then proceeded to produce the major bargain of the day - for example, a hand-free earphone cordless telephone (priced at about $280) or a video cassette recorder (at about $1,600) - with lavish claims of quality superiority and competitive pricing.

In high expectation of the ultimate free gift, many who would have already bought goods of one kind or another, were easily influenced by the aggressive salesmanship to make more purchase.

The moment of truth came when it was revealed that not every customer would receive the promised handheld TV set as gift. The TV set, together with other "mystery gifts", all of them wrapped in sealed black plastic bags, would be put in a lucky draw box. Everyone would make a draw and only the lucky one(s) would receive the promised gift.

Further, the customers were strictly instructed not to unwrap the gifts while at the premises but to do so after leaving the shop.

All 9 complainants drew blank - their free "mystery gifts" turned out to be items such as a clock, flash light, wallet or loudspeaker, which obviously fall far short of their expectation of a free gift of high value.

The complainants paid, on average, some $600 each for the purchases. They have approached the Consumer Council not so much to seek refund but to draw its attention to this trade practice.

They alleged that they were misled into buying goods which, in the first place, they had no intention of purchasing.

Despite warning to the company, the Council has continued to receive complaints against the shop. The Council is, therefore, naming the shop in order to alert the public to this repeated sales practice detrimental to consumer interests.