SINGAPORE: In the last week or so, at least two businesses that collected prepayments from customers – UFC Gym Singapore and education chain Genius League – have abruptly shuttered.
Customers who paid in advance for gym packages or tuition fees were left stranded and scrambling for refunds.
Last year, consumers lost more than S$645,000 (US$482,000) in prepayments due to sudden business closures, mainly in the beauty and travel industries.
Unless the contract says otherwise, customers are generally legally entitled to the money paid in advance for unused sessions or membership, said Mr Alvin Tan, partner at Rajah and Tann.
But this does not mean a customer will always get their money back – a company may be in debt and wind up without any money left over for refunds, he said.
Here’s what you can do if you find yourself in this situation:
1. Contact the business for a refund
Try to contact the business to resolve the matter. You may have to show that you’ve done this in order to start other dispute resolution processes, so keep written correspondence of your attempts as proof.
If this doesn’t work, Mr Chia Huai Yuan, partner at Dentons Rodyk & Davidson, suggested concurrently pursuing other methods to get your money back.
“This is because it is hard to predict which option would work, and in cases such as this, time may be of the essence,” he said.
2. Claim a chargeback from your credit card issuing bank
A chargeback claim is when a credit card holder disputes a payment and initiates a reversal of the transaction. Common claims are for goods and services not received, defective goods and services, transaction errors and unauthorised transactions.
Cardholders should contact their bank as soon as possible. Most banks will require them to submit a dispute resolution form within 14 days of the card statement date, according to national financial education programme MoneySense.
If the claim is approved, the acquiring bank will deduct the chargeback amount from the merchant’s account and transfer it to the card issuer. Resolution generally ranges from four weeks for simple cases to 12 weeks for more complex ones.
Mr Chia warned that a bank may not always issue a chargeback, depending on the terms of the contract between the bank and the customer, and the terms of the contract between the bank and the merchant in question.
3. Get CASE’s help with mediation
The Consumers Association of Singapore (CASE) is a non-profit, non-governmental organisation that helps to mediate between customers and businesses.
You must pay membership and administrative fees to engage CASE to negotiate on your behalf, unless you belong to a union or organisation that is already a member.
The complaint can be submitted online, and you will need supporting documents like receipts, credit card statements and any contract that was signed.
CASE can warn the errant business or enter into a voluntary compliance agreement with them, where the business agrees in writing to stop the unfair practice and in some cases, compensate affected customers, said Ms Elsa Chen, partner at Allen & Gledhill.
This can serve as a starting point, but there are constraints as CASE cannot compel businesses to participate, said Rajah and Tann partner Mr Tan.
4. Take legal action at the Small Claims Tribunal
If the amount being claimed is below S$20,000, you can file it at the Small Claims Tribunals of the State Courts. This is meant to resolve claims more quickly and less expensively than a civil trial.
The claim must be filed within two years of the facts causing your legal action.
The court can arrive at different outcomes, including ordering the business to pay the customer a sum of money by a due date, or to make good any deficiency in the goods or services.
If the business does not comply with the order, the customer can start execution or enforcement proceedings.
“Enforcing an order does not guarantee an outcome. You should weigh the pros and cons before proceeding,” advises the Singapore Courts website.
5. Take legal action under the Consumer Protection (Fair Trading) Act
If the business has engaged in unfair practices, the customer may have a claim under the Consumer Protection (Fair Trading) Act.
A clear example is if the retailer had sold the prepaid package when it knew or ought to know that it would not be able to supply the goods or services, said Mr Daren Shiau, partner at Allen & Gledhill.
In such cases, the customer can start an action in the court under the Act if the claim amount does not exceed S$30,000, he added.
This claim can also be filed at the Small Claims Tribunal, said Mr Tan.
6. What if the business is insolvent?
You cannot take the aforementioned legal actions if the business is in liquidation or winding up, unless you get permission from the court. This is to avoid the business’ assets being dissipated under a multiplicity of suits, said Mr Tan.
Furthermore, customers, as unsecured creditors, are ranked the lowest in priority among creditors, said Mr Chia.
If the business has started insolvency proceedings and customers make a claim with the liquidators, they will only be paid after banks, landlords, suppliers and employees, said Mr Shiau.
“If the company’s debts surpass the funds earned through the sale of its assets, the sums owed to customers might not be repaid at all.”
7. Take other legal action
Another option is to take representative action with other aggrieved customers, said Mr Shiau. But he cautioned that there is uncertainty on the time needed to pursue the action and the outcomes.
Mr Tan said the customer can also apply to the court to make an individual personally liable for his or her loss.
“This is if, prior to the company winding up, the company’s business was carried on with the intent of defrauding the customer, and that individual knowingly participated. The success of the claim depends on whether that intent and knowledge can be proved,” he said.
8. Be more careful with future purchases
Consider avoiding prepaid packages that involve large sums or lengthy contract periods.
“Bear in mind that by opting for longer-term packages, some money is saved but in exchange for more risk. Also, consider how long it will take to fully consume prepaid sessions and factor that into the decision-making. The longer it takes, the higher this risk is,” said Mr Tan.
If you decide to go ahead, CASE suggests negotiating for progressive payment instead of prepaying the full amount.
For example, with renovation, ask to pay a 10 per cent deposit, 80 per cent in stages at each step of renovation work, and the remaining 10 per cent of the payment 14 days after all the work has been completed satisfactorily.
Mr Tan also suggested taking time to make sure you understand the refund policy, check whether the business has any insurance or escrow arrangements to protect prepayment and read up on the business to avoid purchasing from those that are in trouble.
If possible, choose businesses accredited by CASE’s CaseTrust scheme. There are more than 800 of them in industries like spa and wellness, renovation, motoring and jewellery.
CaseTrust-accredited spa and wellness businesses are specifically required to protect customers’ prepayments by buying insurance.
When buying from these businesses, Allen & Gledhill's Ms Chen suggested asking for the insurance cover note or an EZ-Link Trust Card, which is a stored value card. Any unused prepaid package value in the card may be refunded.
CaseTrust-accredited renovation businesses are also required to protect customers’ deposits by purchasing a deposit performance bond – a kind of guarantee that the business will meet its contractual obligations.
What happens if my prepaid shipping label isn't enough? ›
Parcels bearing insufficient postage are normally returned to the sender. If the item makes it to the destination post office, the delivery person will attempt to obtain the postage deficiency from the addressee. If the addressee refuses to pay, the article is returned to the sender.How do you deal with wrong packages? ›
When you receive a mistaken delivery, call customer service for the delivery company and explain the situation. Give them the tracking number on the package, as well as the name and address on the package if it's different from yours. The company will come and pick up the product within a reasonable time frame.What happens to packages that can't be delivered? ›
Here's how it works: the USPS processing centers send all their undeliverable mail to the Mail Recovery Center. They scan and open the packages to look for identifying info that may help get the package to its rightful owner—if the item has a value of $25 or more.What to do with a package that doesn t belong to you? ›
If you confirm that the package addressed to you, wasn't ordered by you or anyone you know, report the package online by going to the Report Unwanted Package form. You can also contact Customer Service who will support you in reporting the issue to the investigations team.What if my package weighs more than prepaid label? ›
If it's heavier, you'll most likely want Priority Mail®; otherwise, you could be inadvertently underpaying the amount of postage due. If that happens, the package may come back to you, requiring it to be reshipped (and delaying delivery time), or the customer may be liable for paying the difference in postage.How can I ship a package without a prepaid label? ›
If your package is less than one-half inch thick and weighs less than 10 oz, you may use postage stamps and do one of the following: Put it in your mailbox for carrier pickup. Drop it in a blue collection box or Post Office lobby mail slot.Do you get a refund if a package is returned to sender? ›
No. Once a package has been accepted into the USPS post stream, it can not be refunded. It's imperative that any refund requests for any USPS packages made in error should be done in a pre-transit state.Can I keep a package I didn't order? ›
Is this legal? Under state and federal law, recipients of unordered merchandise may keep the goods and are under no obligation to pay for or return them. The recipient may treat the merchandise as an unconditional gift—and may use or dispose of the merchandise as he or she sees fit.Can I pick up a package from USPS if the address is wrong? ›
If the wrong address is local to you, you might be able to call your Post Office and request that they hold onto the parcel when it reaches them, rather than attempting delivery. They will not reroute the parcel to you, because this is open to abuse, but you may be able to collect it from them.Can I keep a package that was delivered to me by mistake? ›
According to the Federal Trade Commission (FTC), you aren't legally required to return merchandise that was sent to you by accident. You are within your legal rights to keep it as a gift, and merchants cannot demand that you pay for something you did not order.
Can I deny a package sent to me? ›
You can refuse the delivery in person when the courier arrives at your address or have someone else do it on your behalf. If you were not at home when the courier had arrived and your parcel was left at your door, call the courier company and inform them that you refuse the package.What happens if USPS refuses to deliver a package? ›
Call the USPS Customer Service
Rest assured that they will do everything to fix the issue. You can call (800) 275-8777 any day during business hours. You may also leave a message to receive a call back if you missed the business hours.
The addressee may refuse to accept a piece of mail at the time it is offered for delivery. The addressee should endorse the piece “Refused.”Can you open a package that has your address but not your name? ›
The federal statute 18 USC Section 1702 states that it is illegal for individuals to open correspondence that is addressed to other individuals.What if UPS gave my package to someone else? ›
If you are the one that received accidentally the package for someone else, then it will be very important that you reach out to the shipping company to try and get the package delivered to the right person. An easy way to do this, is by simply looking up the name and address that was delivered on your doorstep.Can you refund a prepaid shipping label? ›
You can request a USPS refund up to 30 days from the date on which you printed a shipping label. You can request a USPS refund up to 30 days from the date on which you created the label.What if my package is too big for UPS drop box? ›
Pre-Paid Return Labeled Parcels too large for a campus drop box that are “date/time sensitive”, the sender may call UPS 1-800-PICK-UPS for a site pickup or take the parcel to an alternate local UPS drop-off site (Office Depot, The UPS Store, etc.) or directly to UPS.What if my package is less than a pound? ›
Packages weighing less than one pound start at $2.74 via USPS First Class Package Service. If your package weighs one pound, you'll want to use USPS Priority Mail which starts at $7.02 with Shippo's special Cubic pricing. USPS accepts packages weighing up to 70 pounds.Will USPS pick up a package with prepaid label? ›
Package Pickup service allows you to schedule a pickup for the next delivery day or a designated day of your eligible mailpiece(s) at the same time your mail is delivered by your letter carrier. The mailpiece(s) must have prepaid postage.Will USPS pick up a package without a label? ›
The post office, FedEx and UPS all offer scheduled pickup options for shipping packages. In most cases, you'll need to have the item boxed up and purchase a shipping label before scheduling the pickup. While scheduling a pickup is free when you use USPS and UPS, it'll cost you if you use FedEx.
Can you print a prepaid shipping label at home? ›
Ship Packages Easily from Home or Office
Print: Print your labels (or see other options if you don't have a printer). Ship: Schedule free Package Pickup1 online or drop off your packages. Save: Get lower Commercial Rates with the new, enhanced Click-N-Ship® experience.
The original sender does pay for returns if they used ground service. Priority Mail and First Class Mail is returned at no cost. The customer who refuses it does not pay, unless they opened it. Then it becomes new mail.Who pays for return to sender mail? ›
If you've signed off on the letter or package, then you will need to pay the postage to send it back.Can you send a package back to sender? ›
You can request that the destination Post Office hold the item for you or have it returned to sender. Verify that your shipment is eligible for Package Intercept. If eligible, you can submit your request online after logging in with your USPS.com account.What is brushing packages? ›
Brushing scams occur when a person receives a package from a business containing various items that they never ordered. The packages will be addressed to your residence, but usually do not have a return address or have the return address of a retailer.What happens if you keep a package? ›
You have the legal right to keep it as a free gift, according to the Federal Trade Commission (FTC). Sellers aren't permitted to ask for payment for unordered items, either, and the FTC says consumers are under no obligation to even tell the seller about the wrongly delivered merchandise.What happens when a package is returned to sender? ›
If your order was marked as “returned to sender”, there was likely an issue with your shipping address that made your order undeliverable. You can check your tracking history for details that might explain what exactly went wrong in this case.Can I put misdelivered mail back in the mailbox? ›
Put the item back in your mailbox.
After picking up your mail, put the misdelivered item back in the box and put the red flag up. The flag on your mailbox signals to your mail carrier that you have outgoing mail in the box.
Mail that is undeliverable as addressed is forwarded, returned to the sender, or treated as dead mail, as authorized for the particular class of mail.Is it illegal to open someone else's UPS package? ›
The short answer is “yes.” Opening or destroying mail that is addressed to someone else is a crime called “Obstruction of Correspondence.” It is a serious felony that could lead to prison time.
What happens if you open a package that is not yours? ›
Yes. It is a federal crime to open or destroy mail that is not intended for you. The law provides that you can not "destroy, hide, open, or embezzle" mail that is not addressed to you. If you intentionally open or destroy someone else's mail, you are committing obstruction of correspondence, which is a felony.Does UPS charge for refused package? ›
Packages refused by consignees or which for any other reason cannot be delivered will be promptly returned to the shipper without additional charge.Can USPS be sued for not delivering mail? ›
Yes, depending on the basis of your claim, you may be able to sue the United States Postal Service (USPS).Can I get a refund if USPS doesn't deliver? ›
Priority Mail Express® service items may be eligible for a refund. The United States Postal Service® refunds the postage and, if purchased, the Sunday or holiday premium fee: When the item is not delivered by the guaranteed delivery date and time specified at the time of mailing.Can USPS go through your package? ›
If the package is not classified as Priority Mail Express™ service (domestic or international), Priority Mail® service, First–Class Package Service™, or an international letter package, it may be opened and its contents examined.What happens if I put the wrong size on a shipping label? ›
If you've made a mistake and need to change the address, weight, dimensions, or anything else, the only option is to request a refund from USPS or UPS for that label and start over.What if my package weighs more than shipping label Facebook? ›
If the actual weight of your package exceeds the package weight you selected you are responsible for any additional postage costs. . If you purchase a Return Label from Facebook, Facebook will charge the credit card we have on file or that you provide, as applicable in accordance with our Community Payment Terms.Can you add postage to a prepaid label? ›
It's ok to add your stamps to the label, Bonnie. You can ADD stamps for extra postage. The only time you MUST physically hand over the package at a Post Office would be if it is over 13 oz and has ONLY postage stamps affixed! Mixed postage should be fine.What happens if you put the wrong dimensions on a shipping label? ›
What Happens If Package Dimensions Are Wrong? If your package dimensions don't match your labels, then the mislabeled packages will be subject to a shipping correction fee. Then, if the average correction during an invoice week exceeds $5.00 per package, you will also have to pay a shipping charge correction audit fee.Does USPS care about dimensions? ›
Maximum Parcel Size
Pieces going to a domestic location may not measure more than 108 inches in length and girth combined. USPS Retail Ground® mailpieces are an exception; they may not measure more than 130 inches in length and girth combined.
Does USPS check size? ›
USPS and UPS both have automated systems to verify that your package details align with what you entered when you made your label, and outer dimensions are one of the items they verify (along with weight, and the type of packaging you use).What happens if you underestimate shipping weight? ›
If a clerk or carrier notices a weight discrepancy the item will be checked and weighed by a clerk. An attempt to deliver postage due will probably be made.What happens if I put the wrong weight on a shipping label UPS? ›
The UPS incorrect weight shipping charge applies when the weight of a package is different than what you indicated at the time of shipping. UPS recommends rounding up to the next full pound when weighing your packages to avoid being charged for an incorrect weight.
Priority Mail Retail Pricing
If you prefer to ship an item in your own box, the post office will weigh your package and determine the Priority Mail rate. If you are a Stamps.com customer, the digital scale will weigh the item and automatically calculate the postage rate into the software.
Your online label cannot be altered and must be used as it was printed. If you find an error in your label, print a new label with the correct address and request a refund.Is it cheaper to use a prepaid shipping label? ›
Save Money on Postage Costs
One of the biggest advantages of using a prepaid shipping label is that it can help you save money on your postage costs. This is because you will only be charged for the actual weight of your shipment rather than having to pay for additional fees such as registration or insurance.
For any domestic mail piece that weighs more than one ounce, you must include additional postage along with your Forever Stamp to ensure USPS delivery. Also, you may purchase higher denomination postage stamps for heavier postage at the Post Office™. Avoid placing two Forever Stamps on a mail piece for heavier mail.