Alshaya stores scrap cash refunds to buyers

Buyers returning faulty or unwanted goods to stores owned by Alshaya will no longer receive cash or credit card refunds under a new scheme that replaces refunds with store credit.

Staff in five Dubai Alshaya-owned stores, including Debenhams, H&M and Oasis, said they were only allowed to give customers store credit in exchange for returned items, even in cases where the goods were faulty, out of stock or repeatedly defective.

The new scheme gives customers 12 months to spend their ‘Alshaya gift card’ but also forces buyers to use the money within the company’s network of stores.

The ruling may also breach Dubai consumer protection laws, which state that stores are obliged to give customers a cash refund if goods are found to be faulty.

In a statement to Arabian Business, Mohammed Lootah, deputy CEO of the consumer rights agency at the Department of Economic Development (DED), said: “If the product is out of stock, then the stores are obliged to refund in the same means of payment and cannot force the consumer to get store credit.”

The manager of a River Island store in Dubai told Arabian Business that cash refunds were “strictly” forbidden in line with the new company rules.

“All the refunds now are [going] through this card only. Money back [will be] in card form, not by cash,” said a Boots employee when asked if the shop would refund a faulty product.

In a statement, Alshaya said: "Alshaya considers consumer rights to be of pre-eminent importance to its business. In line with consumer statutory rights, it is company policy across all of our stores that customers returning any goods which are defective, or have a manufacturing fault, are entitled to a full cash refund.

"For all other returns, we have recently introduced the Alshaya Card to provide extra value and convenience to our customers.

"This means that while previously customers had just seven days to spend a refund in the store where they made their original purchase, they now have a full year and can use the Alshaya Card across Alshaya's wide portfolio of retail brands.

"We believe this is something that our customers will love and appreciate, and that they will recognise that our policy is one of the most flexible and generous in the region."

A report by Dubai’s consumer protection agency in June showed the majority of disputes between retailers and shoppers arise from refunds and exchanges.

According to the DED, complaints from consumers soared in the first quarter of 2011, with 2,900 shoppers registering complaints against retailers, up from 2,300 last year.

The spike in complaints from consumers in the first quarter followed an advertising campaign aimed at improving awareness among shoppers of their legal rights, Lootah said.