WENDY KNOWLER | Never assume a retailer plays by the rules and underinsuring your home could cost you

In this weekly segment of bite-sized chunks of useful information, consumer journalist Wendy Knowler summarises news you can use:

Never assume that a retailer plays by the rules

Always keep in mind that the price you pay for goods includes after-sales service — that means complying with the Consumer Protection Act should a product fail within six months, as well as the retailer’s own voluntary returns policy with respect to taking back non-defective goods.

A retailer can afford to offer the cheapest prices if they offer little to no after-sales support.

Piet bought eight emergency LED globes from a Cape Town retailer during February and March this year to see him through scheduled blackouts. “These globes contain a battery and are said to continue to burn at about a third of their normal luminance during load-shedding,” he said. “For a few days the globes worked fine on both Eskom power and battery power, but some remained glowing faintly, even when removed from their fitting.” And then they all stopped working on battery power, Piet said. “So they were no better than a normal globe at four times the price.”

He put all the globes back into their boxes and returned them to the store for a refund. “The refund department point blank refused to refund me and one of the store managers said the warranty on the globes was only seven days. He said the Consumer Protection Act did not concern him.”

I look forward to tackling the retailer on that, but in the meantime let this tale serve as a warning not to assume that a retailer understands and complies with the Consumer Protection Act’s section 56, which covers the consumer’s right to return defective goods within six months of purchase for their choice of a refund, replacement or repair. Quiz the staff in store or check out their returns policies online before giving them your custom.

Under-insuring your home will cost you at claims time

Many homeowners make the mistake of insuring their homes for the market value, not the replacement value.

A property’s replacement value — the cost of demolishing and reconstructing the building to the same specifications in the case of total destruction — can only be assessed by a qualified and experienced professional valuer. And it’s up to you to make sure the insured value is accurate when you take out the policy, and in the years that follow.

Most insurers won’t ask any questions about the value stated on your homeowners or building insurance, or your possessions, when you take out the policy, so you can’t expect the company to do anything other than insure your home for the value you supply.

A Sandton family’s house burnt down about six months ago due to an electrical fault. The house was insured for R3.6m, and household contents for R484,000. Their insurer has indicated it will pay them R1.3m for the house and R387,000 for house contents, on the grounds that they were underinsured, something they dispute.

“Our entire life was tied up in our home, and now we are expected to rebuild, refurnish and pay our current bond with what they are offering,” the homeowner said. “When I added my home to the policy, the insurer and broker accepted the bank’s valuation as the replacement value. “I was never advised that my sum insured was not enough.”

The case is currently being adjudicated by the ombudsman for short-term insurance.

Don’t let a shop force you to pay their bank fees

South Africa’s poorest are sadly also the most exploited.

Nofikile sent me this email on Worker’s Day: “I want to report a spaza shop owner that charges people R20 fees for paying with their bank cards. “How do I go about doing that?”

I routinely hear of shopkeepers adding a 5% fee to transactions if their customers choose to pay with a bank card, but a flat fee — and a hefty one at that — is even more outrageous.

What that spaza shop owner, and many shopkeepers, are doing is passing on their bank fees for card transactions to their customers, which is illegal. It’s a contravention of the CPA, which states, in brief, that the advertised price may not be inflated. It also violates their merchant’s agreement with their bank, which states that they may not pass on their bank fees to their customers.

Retailers may refuse to accept card payments, but if they accept card payments, they may not bump up the price to cover their fees.

My advice is to report it to the bank which supplies their card facility. Point of sale machines are branded with the bank’s logo and to boycott the shop and warn others.

I’m told the same shop refuses to hand card machine slips to customers — a sure sign that they are up to no good, and don’t want the proof of that to land up in their customers’ hands. They’ll get away with it if their customers continue to support them, regardless.

• GET IN TOUCH: You can contact Wendy Knowler for advice with your consumer issues via e-mail: consumer@knowler.co.za or on Twitter: @wendyknowler.

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