Tuesday, March 24, 2009

Reader's Digest - a scam?


Below is my complaint to Reader's Digest, (RD) based on another illegal attempt by them to charge my c/card. Lesson learnt - Never provide your credit card number for charges by filling up a form, as they can try to use the same detail and keep on charging you. If you really need to do so, use a credit card you can and are willingly ok to cancel on the spot. I learned my lesson the hard way, cause, I have easy installment payments on my card, so how do I cancel it? Below is my email which I initially faxed and then emailed to them on 18 March 2009.

re-send by email in case fax is not received:

Reader's Digest Customer Number : 030-xxxxxx


xxxx Yew,

Customer Relationship Department

P.O Box 600, Singapore Post Centre

Singapore 914020

Another UN-AUTHORIZED transaction attempt by Reader's Digest

After a long issue just resolved where Reader's Digest (RD) illegally charges my RM58.10 and reverses the charges after complains to KDNHEP and BNM and RD's apologizes,

Now RD is AGAIN trying to charge me RM58.10? This is referring to your letter dated 13/02/2009 (O/N:003 000) stating un-successful charge to my credit card, an amount of RM58.10, further requesting me to make payment.

I have NEVER authorized RD to make any charges on my c/card EXCEPT the first charge of RM89.90 which has already been charged and paid on 01/08/09. RD has also acknowledged on your letter dated 21 November 2008 signed by xxxx Yew it was RD's fault of trying to charge an additional RM58.10 on 05/09/2008,

And now RD is at it again, trying to charge my card.

Another thing : A couple of months, somehow RD sends me another Free Gift - Travel Bag. I call RD at 03-7960 1111 and request to talk to Jennifer Yew, but am told she is in Singapore. Ok, I say can I talk to someone in Customer Relationship Dept and was told they will get back to me. Till date, no one in Customer Relationship Dept has bothered to call me back. So what am I suppose to do with this Bag?

As mentioned during my calls and now again in this letter I DO NOT AUTHORIZE Reader's Digest to make ANY charges on my credit card. All attempt to charge my credit card without my specific written consent is tantamount to fraudulent charges and I will lodge reports to the respective authorities and cc the media.

Also to

RHB - Thank you for not authorizing this new unscrupulous attempt by RD. What disappoints me again though is I called RHB on 27 Feb 2009 to understand these new charges and was told RHB will get back to me but never did. My follow up call on 18 March 2009, the person told me that RHB does not have details of this charge attempt, and I requested to be contacted by someone in Retrieval & Chargeback Unit or a relevant dept but he mentioned I need to FAX a letter first to RHB. So what's the point of having a call centre?

BNM (JPB0xxxx/xxx4 Nov 2008)- Thank you for pushing RHB to investigate the additional initial charges (05/09/2008) which now have been reversed. Initially RHB was hardly bothered and did not entertain my calls nor faxes, telling me that I would need to resolve the matter with RD as it was my problem with the merchant. Interestingly RHB had somehow forgotten that I was an RHB Client till receiving a reminder from BNM.

KPDNHEP (KPDNHxxxxxx, 31/10/2008)- Thank you for pursuing and leading to a closure on the initial fraudulent charges 05/09/2008. Previously before complaining to KPDNHEP I had called Reader's Digest and faxed them multiple times but was ignored, and somehow treated as at fault and I needed to 'proof' my innocence against the charges, even though it was RD which made additional un-authorized charges. .

KPDNHEP - Again as in this letter, there is another unauthorized attempt by RD to charge my card, therefore I would like to bring the above matter to KPDNHEP's attention and hope that KPDNHEP takes stern action against irresponsible merchants.


Bank Negara Malaysia


RHB - Retrieval & Chargeback Unit

Thursday, March 19, 2009

Malaysian Banks and the Current Meltdown

Malaysian Banks and the Current Meltdown - (Based on findings till 24 January 2009)

Initially I was planning to start another blog to post all the MBA reports and essay as well as all the best practices, and learnings I've experienced through my RMIT - MIMS Inti MBA Executive (Part Time) MBA. But then life is always busy busy, and if I procastinate too long, the topics I wrote about might even get out-dated. :p . Furthermore some of the work below e.g. as the one below, is very much related to Penang and Malaysia, so it deserves a post in fyi-penang.blogspot.com wouldn't you say? Anyway, below is my individual report for the Core Course, Global Business Context (GBC). Hope you find this useful, and do leave any comments of what you think of this report. Note I submitted this report on 24 January 2009, so information would be only latest till around that time. This is my personal understanding and study of the recession and its impact, and is in no way a recommendation or advice. -Lukman



Executive Summary
1. Introduction
1.1. Aim of the Report
1.2. Overview of the Financial Sector, specifically in Malaysia
2. Globalization and the Financial Meltdown
2.1. Understanding the Financial Meltdown
2.2. The ASEAN 1997 Financial Crisis
3. Country Analysis
3.1. Trade Interdependence: Commodity Exporter & Manufacturing Dependent
3.2. The Financial Sector: Over-leveraged?
4. The Regulatory Environment 10
5. Scenario Analysis (Anticipating Change)
5.1. The Average Case
5.2. The Worst Case
5.3. The Best Case

6. Strategy - Foreign Banks Strategizing in Malaysia
7. Innovation - Islamic Banking

8. Conclusion
9.1. Appendix 1: Malaysia Monthly Trade Performance 2007-November 2008.

Figure 1: Malaysia Exports by Destinations, January – November 2008
Figure 2: Malaysia Federal Government Finance, 1985-2008.
Figure 3: Malaysia Financial and the Scenarios 2015
Figure 4: Islamic Banking as % of total Banking Assets by Country

Executive Summary
Malaysian financial institutions, both local and locally incorporated foreign banks managed to come out of the ASEAN (Association of South East Asian Courtiers) 1997 crisis, alive but battered. Lessons were learnt, steps taken and regulations setup to avoid a recurrence. Now the financial meltdown spurred by the banks in USA, has put this institutions through their toughest test yet.

The Malaysia economy is highly dependent on exports and many of its trading partners have entered or nearing recession. Besides the already existing pressure on the financial institutions due to the meltdown, the potential fall of the economy and exports will further strain the financial institutions. The strong reserves and manageable debt of Malaysia will be vital to the survival of the country and institutions.

Regulations in place by Bank Negara Malaysia (BNM) ensuring all banks are locally incorporated and execute prudent financial practices will play an important role in ensuring the financial stability locally. These regulations have also been a factor in determining the strategy implemented by foreign banks to operate in Malaysia, giving it benefits of both worlds, having its strong brand and network while insulating itself from the quandary of its parent company.

The scenario analysis concludes three possible scenarios, an average scenario is expected to be most plausible where Malaysian financial institutions manage to weather the turmoil with strong support from BNM and the government, in time for the world economies and banks to slowly recover.

There exists innovation opportunities in the sector to implement key principles from the Islamic finance in the conventional banking, renewing the eroded credibility of institutions world wide.

Finally it is concluded that Malaysia and its financial sector will suffer from the meltdown however to a lesser effect considering the strong fundamentals and prudent financial practices.

1. Introduction
1.1. Aim of the Report
This report will look into the financial institutions in Malaysia and evaluate how they will fare in the current financial meltdown. A global business context view is discussed to assess the above statement.
1.2. Overview of the Financial Sector, specifically in Malaysia
Crane (1995) states from the most aggregated level, six core functions are performed by the financial system:
 Clearing and settling payments to facilitate trade
 Provide a mechanism for the pooling of resources and for the subdividing of shares
 Transfer economic resources through time, across borders, and among industries.
 Provide ways of managing risk.
 Provide price information to help coordinate decentralized decision-making in various sectors of the economy
 Provide ways of dealing with the incentive problems

Bank Negara Malaysia (BNM), the central bank for Malaysia was established on 26 January 1969. The local banking sector comprises of commercial banks, finance companies, merchant banks, discount houses and money brokers which are licensed under the Banking and Financial Institutions Act 1989 (BAFIA) and supervised by BNM (Bank Negara Malaysia 2008a).

Meyer (1999) summarizes central banks as having two core missions; pursuit of monetary policy to achieve broad macroeconomic objectives as well as the maintenance of financial stability, including the management of financial crisis, where the latter is closely connected to regulation and supervision of the banking system.

In 1997 the 36 banks went through a merging process, and as of 2004, the domestic banking institutions were reduced to 25 (Dr. Zeti 12 November 2007).

2. Globalization and the Financial Meltdown
Nayyar (2006) comments there are three manifestation of the globalization phenomenon; international trade, international investment and international finance. It is these factors that will play a major part in deciding its impact to the financial institutions in Malaysia.

2.1. Understanding the Financial Meltdown
Summarizing the financial meltdown into 3 stages, firstly with creditors fleeing from the sub-prime debt in summer 2007 due to large losses, secondly with the Bear Stearns Securities crisis in March and extended through the bailout of mortgage giants caused mainly due to investment banks evolving into proprietary trading houses with large illiquid securities, and given sufficient panic, it becomes impossible to roll over their short term loans. The third stage, with the bankruptcy filing on Lehman Brothers Holdings Inc and the ‘rescue’ of AIG, further eroded confidence. Combined with lax reaction from the Fed and inconsistency, fuelled a run from all entities that might fail, even if they appear solvent. Subsequently the collapse of a fund market and pending lapse of others sent the U.S Treasury into crisis mode. Now the shock waves have spread quickly throughout the world (Johnson 2009).

2.2. The ASEAN 1997 Financial Crisis
Abdelal & Alfaro (2003) argue that Malaysia’s success in applying capital controls during the ASEAN 1997 recession is due to 3 critical factors, being Bank Negara had a high level of foreign exchange reserves, Malaysia had relatively little external debt and finally the links between public authorities and the financial system were deeply institutionalized. These factors will be used as a basis to evaluate the financial sector’s current standing against the meltdown.

3. Country Analysis
Two major points need to be studied in the Malaysia analysis with reference to interdependent and integrated world economy. Firstly is the trade with the world and secondly is the interdependence and integration of the financial sector itself with external forces.

Johnson (2009) observes that while wealthy nations like USA can use their wealthy balance sheets to shore up banks many countries will find this impossible, as happened in the emerging markets after 1997-1998, the withdrawal of credit can lead to steep recessions and major internal disruptions. He further argues that four set of countries stand to lose the most;
• The over-leveraged; i.e. banks and countries that over-borrowed heavily.
• The commodity-dependent exporters especially oil and other major commodities that have dropped in price.
• The extremely poor, e.g. Sub Saharan Africa.
• China, being heavily dependent on manufacturing.

3.1. Trade Interdependence: Commodity Exporter & Manufacturing Dependent
Based on Figure 1 Singapore, USA, Japan and China are Malaysia’s largest customers. USA has already gone into recession, followed by Singapore. China is seeing a slowdown in growth. It short, most of Malaysia’s main trading partners are going through a rough time, and will definitely impact exports and business.

Figure 1: Malaysia Exports by Destinations, January – November 2008
Source : (Ministry of International Trade and Industry Malaysia 2009)

Referring to Appendix 1, Malaysia’s monthly trade performance has started to dip since Sep 2008 and is not expected to recover in the near future. A drop in exports translates into a number of issues, including local business making losses due to lower exports and revenue, thus potentially leading some to default on loans, turning into Non Performing Loans (NPL) and finally go into bankruptcy. This will impact financial institutions due to a higher NPL ratio, and lower liquidity. Consequently, banks will be more stringent in disbursing loans, making credit availability tighter.

3.2. The Financial Sector: Over-leveraged?
Hendrickson (2008) mentions Dr. Zeti, the governor of BNM explains that in the current crisis, the impact on Asian countries is volatility in financial markets—in the stock market and the foreign exchange market as there is a deleveraging process by the international financial institutions going on and as a result, they are liquidating assets all over the world because of their increased demand for dollars.

Hendrickson (2008) further comments that Thailand which was the flashpoint for the ASEAN 1997 crisis, has improved NPL ratios, and are shielded against liquidity strain in the international market, with local deposits funding accounting for about 86% of total liabilities. In other countries like Indonesia, concerns begin to exist; where Dollar liquidity is under strain after the Rupiah fell to a 10 year low in late November 2008. This is just the beginning of the meltdown, and it would be expected that the strain will continue to grow.

Malaysia’s Official Reserve Assets as of January 2009, was RM317.2 billion, equivalent to USD91.5 billion (Bank Negara Malaysia 2008b). Compared to between RM56 - 59 billion in February 1998, six months before the capital controls were put in place (Abdelal & Alfaro 2003). Next the external debt; in the 1997-99 crisis, more than 50 percent of Korea’s and Thailand’s external debt had been short-term before the crisis began, only one quarter of Malaysia’s had been (Abdelal & Alfaro 2003). At end of 2007, Malaysia’s short term debts were still less then 30%, i.e. RM54.4 Billion out of a total external debt of RM187.4 billion (Economic Planning Unit Prime Minister's Department Malaysia 2008).

Figure 2: Malaysia Federal Government Finance, 1985-2008.
Source : Economic Planning Unit Prime Minister's Department Malaysia (2008)

However an important distinction this time round, (Figure 2) is Malaysia has an overall budget deficit estimated at RM21.6 Billion in 2008 verses during the 1997 crisis, Malaysia had a small budget surplus.

Country analysis shows a mix of positive and negative events.

4. The Regulatory Environment
The regulatory environment will either help or worsen Malaysia’s capability to cope with the meltdown. A number of important regulatory requirements for financial institutions in Malaysia were induced by the recessions it had gone through previously. Malaysia is a member of the World Trade Organization (WTO) which has called for the liberalization of the financial sectors from 2003 (Shanmugam & Nair 2004).

Daquila (2007) summarizes that following the ASEAN crisis, BNM implemented various controls aimed at strengthening prudential regulation and supervision, including greater transparency in monetary operations, increased requirements for capital adequacy ratios, and re-classification of NPL from six to three months.

Another important regulation enforced in 1994 for foreign banks in Malaysia, is the revoked authorization of foreign banks to operate in Malaysia unless they are locally incorporated (United States Trade Representative 2006). An interesting positive impact of this regulation is now evident; with major losses reported by parent foreign banks yet the locally incorporated banks did not suffer. Citibank Berhad (the locally incorporated Citibank) issued circulars to its customers stating that the bank is locally incorporated and regulated by BNM and as such is subject to all prudential and other requirements applicable to commercial banks in Malaysia (Nanavati 2008).

After understanding the causes of the economic meltdown propagated by USA in 2.1, it is clear that the rules and regulation set in the USA were too loose and was not well regulated. The discussion above highlights the regulations that have been placed by BNM which would potentially prevent or at least minimize similar issues or faults in the local institutions.

5. Scenario Analysis (Anticipating Change)
A short-medium term scenario analysis is conducted based on two focal questions that have the ability to impact the outlook of Financial Institutions in Malaysia. The focal questions are relevant to both the external implications especially happenings in ASEAN and in Malaysia in particular. :
• Will the Malaysian government, BNM and local institutions be able to govern effectively, spur the local economy and financial sector with appropriate but wise fiscal and lending policies?
• Will the economic meltdown continue to worsen or head towards improvements? Also how this will impact the ASEAN nations in specific. The domino effect during the 1997 crisis points towards significant dependence on these neighbouring countries.

Baig & Goldfajn (1998) conclude that their correlations on the Asian crises suggest during a period of financial market instability, shocks originating from one market readily get transmitted to other markets, thus becoming a source of substantial instability.

Three different paths for the Malaysian financial institutions are depicted in Figure 3, represented by progress through the defined focal questions.

Figure 3: Malaysia Financial and the Scenarios 2015

5.1. The Average Case
(a) 2009-2012: In a continued downturn of world economies and further bailouts of financial institutions in USA and Europe, the region’s economy is shaky. Lessons learnt and steps taken from the 1997 crisis prove to be useful in minimizing the impact to Malaysian banks to a certain extent. BNM policies and close collaboration with banks keeps the financial sector alive. Continued government spending helps avoid an economic halt.
(b) 2013-2015: Major economies remain stagnant but do not collapse. Weaker ASEAN countries with low reserves and export dependent begin to go further into recession. Trade between world economies and ASEAN countries continue to decline. Prudent spending by the Malaysian government helps keep the economy moving while maintaining acceptable levels of reserve. Smaller banks are forced to file for bankruptcy due to low financial reserves and further deleveraging. A number of banks merge to increase capital and the government takes over NPLs to avoid a further collapse of the institution. BNM maintains it policy of low interest rates. The economy survives but at a slow rate.
5.2. The Worst Case
(a) 2009-2012: The government’s efforts to inject capital and increase fiscal spending help sustain the economy. However this is not enough to spur growth and counter the world wide economic recessions. ASEAN economies start to tumble leading to higher default on loans, forcing banks to declare losses. The government continues to try to maintain the economy by lowering interest rates and increase spending. BNM policies to reduce interest rates and encourage borrowing ends up awry with more NPL loans.
(b) 2013-2015: The world economy and financial sectors continue to collapse, specifically USA, China and India. ASEAN countries are badly hit. Trading within ASEAN and world economies reach an all time low. The government has used up most of its foreign reserves to spur the local economy. Debt has grown, further made worse by a continued trade deficit. Middle term loans mature and put more pressure on the public and private sector, forcing the Malaysian economy to collapse and many banks declare bankruptcy.
5.3. The Best Case
(a) 2009-2012: The government’s fiscal policy to stimulate the economy succeeds. BNM lowering the interest rates spurs spending and borrowing, keeping the momentum going. Banks have enough liquidity and manage to give out loans, with a maintained low ratio of NPL. Public and private institutions having not over-leveraged on short term loans manage to maintain liquidity and a healthy cash flow. In the ASEAN region, even with the continued recession world-wide, intra ASEAN trade is healthy. ASEAN governments, banks and financial institutions have in-place good governance, transparency, and strong financial reserves to weather the turmoil.
(b) 2013-2015: A stable region enhances customer confidence and spending while investments grow. The world economies and financial institutions start to show positive growth with new improved regulations and practices. Trade with non-ASEAN countries specifically USA and China reach new highs.

Based on the research and analysis, the average case is most likely to happen due to governments around the world specifically China, USA, EU and Malaysia have started to implement stimulus packages and bank deposit guarantees avoiding a great depression. Malaysia should be able to sustain itself with the current foreign reserves until the world’s economy starts to pickup.

The best case scenario is deemed unlikely due to even though having prudential measures in place, the Malaysian economy is highly dependent on exports, and the meltdown will impact exports, subsequently the economy and business, which will then cascade to the financial sector. Furthermore the impact of the current meltdown is significant, making it unlikely for all economies to recover by 2013.

The worst case scenario is also not highly plausible as the short term debt is manageable and the foreign reserves are significantly higher then the debt. BNM also has a proven track record to steer the financial institution to survive and succeed in a recession. At least some of the major economies should be able to recover by 2013, helping improve exports and raise the economy to sustainable levels.

6. Strategy - Foreign Banks Strategizing in Malaysia
Considerations are made to identify strategies to assist in global expansion, mainly to lower costs of value creation, differentiate the firm’s product or service offering and / or penetrate new markets. Four main strategies can be considered, being International, Global, Transnational and Multi-Domestic.

It is making best of these strategies that for example enabled Citibank to make significant profits in Malaysia even though losing money in USA. However in the same notion of global expansion some Malaysian banks, namely Maybank made losses while trying to expand into Indonesia due to inadequate research on the regulations there.

Generally most banks expanding globally are transnational (Lovelock 1999), but then due to Malaysian law requiring banks to be locally incorporated, banks would need to consider the multi-domestic strategy. In similar considerations, Ennew & White (2006) argue that it is difficult for financial service providers to be truly global because regulatory regimes vary across countries and limit the extent of true standardization. Perhaps HSBC’s motto itself provides an explanation to their strategy, i.e. ‘The World’s Local Bank’. Simply put, foreign banks operating in Malaysia try to maintain their global brand name and network benefits, but localize the company setup and tailor the services to the given market.

Gunasegaram (2008) points out foreign banks that strongly resisted the local incorporation regulation by Bank Negara, are now benefiting during the current meltdown as they must maintain capital funds here thus avoiding capital flight from local investors as well as enjoying Bank Negara’s blanket guarantee of deposits on all banks operating in Malaysia.

In short, the ‘forced’ regulation by Bank Negara, has helped foreign banks to strategize optimally in the Malaysian market, benefiting from existing experience and brand name, yet being insulated from its parent company to a certain extent, as well as not having to fear local customers’ reaction to its parent company’s predicament.

7. Innovation - Islamic Banking
An incremental innovation for the conventional banking sector would be to take a deep look into the principals of Islamic banking. Currently both have distinct different rules, regulations and ethics. It could be said that Islamic banking provides financial services while maintaining compliance with Sharia, the Islamic legal code and maintains lower risks therefore presumably lower returns.

Per Figure 4, Islamic banking is already growing in Malaysia on two bases, one is conventional banks offering an Islamic banking window e.g. HSBC Amanah, and the other is full fledged Islamic banks for example Bank Islam Malaysia Bhd.

Figure 4: Islamic Banking as % of total Banking Assets by Country
Source : Benaissa, Jopart & Tanrikulu (2007)

Presumably Islamic Banking emerged due to the ‘demand-pull’, spurring entrepreneurship to tap this segment while providing a social obligation to the growing desire of many Muslim to conform to Sharia in their day-to-day activities.

In a fresh perspective, maybe it is time to innovate. Conventional banking can innovatively study the benefits and basics of Islamic banking which can be a check and balance to avoid banks from over leveraging and taking high risks as witnessed in the current meltdown. One important point for innovation in conventional banks would be to consider a key requirement in Islamic banking for the creation of a large number of products is that financial instruments must be founded on a physical transaction, such as the underlying sale and purchase of a commodity (Benaissa, Jopart & Tanrikulu 2007). Some might argue this is the basis of any prudent financial management, but due to lack of specific regulations calling this out in conventional banking; banks tend to be over exposed in expectations of higher returns. It has been discussed that this was one of the factors of the meltdown.

Customers who prefer conventional banking but expect a new set of assurance can be targeted, likened to Hamel’s ‘concept innovation’ where companies create different business models compared to previous practices (Hamel 2002). It is interesting to note that even though many international banks including Citibank have started Islamic banking operations, the notion is still new in many countries including its parent country, USA.

Recently a tiny Michigan Bank is getting attention in the industry by turning profit on loans without even charging interest, its specialty being financial products that comply with Islamic law. That means no collecting interest, no short selling and no contracts that are considered exceedingly risky. Mentioned also is that it rules out some of the activity that got Western finance in trouble – subprime mortgages, credit default swaps and the like. It further goes to clarify though, that there is no guarantee that banks will find immunity in Islamic finance from a severe global downturn quoting Afaq Khan the head of Saadiq, the Islamic banking arm of Standard Chartered Bank “I am not doing banking on Mars” (Karoub & Abbot 2009)

In short, there is clearly room for innovating in the conventional banking sector, as well as growing the existing Islamic finance to cater to a larger market.

8. Conclusion
It is clear that the economical and financial challenges will keep on growing as globalization continues. Interdependence and integration will be the norm of the day, and it will depend on how well Malaysia prepares itself with strong fundamentals and diversification to avoid catching a flu when the world sneezes. Robert Shiller, a leading finance professor at Yale University, proposed for a super cross-country macro-hedge, suggesting that government and its agencies should diversify GDP growth, state welfare and state pension internationally (Poon 1999). This would reduce regional dependence and diversify funds. While there exists opportunities for innovation, prudent regulations are necessary to guarantee a healthy structure of financial institutions. Finally it is expected that Malaysia and its financial sector will suffer from the meltdown due to its interdependence on world and ASEAN economies, however to a lesser effect considering the strong fundamentals and prudent financial practices.

9.1. Appendix 1: Malaysia Monthly Trade Performance 2007-November 2008.

Source : Ministry of International Trade and Industry Malaysia (2009)

Abdelal, R & Alfaro, L 2003, 'Capital and Control: Lessons from Malaysia', Challenge, vol. 46, no. 4, pp. 36-53.
Baig, T & Goldfajn, I 1998, 'Financial Market Contagion in the Asian Crisis', International Monetary Fund Working Paper, vol. 98, no. 155.
Bank Negara Malaysia 2008a, The Financial Sector Masterplan, Bank Negara Malaysia, Publication Sales Center, BNM.
---- 2008b, International Reserves and Foreign Currency Liquidity, BNM, viewed 19 Jan 2009, .
Benaissa, N-E, Jopart, X & Tanrikulu, O 2007, 'Rethinking regulation for Islamic banking', The McKinsey Quarterly: The Online Journal of McKinsey & Co.
Crane, DB, Bodie, Z, Froot, KA, Mason, SP, Perold, AF & Merton, RC 1995, The Global Financial System, Harvard Business Press.
Daquila, TC 2007, The Transformation of Southeast Asian Economies, Nova Publishers.
Dr. Zeti, AA 12 November 2007, 'Governor's speech at the Sir Purshotamdas Thakurdas Memorial Lecture - "Managing Financial Liberalisation and its Challenges: Implications for Emerging Economies"', paper presented to Sir Purshotamdas Thakurdas Memorial Lecture, Mumbai, India, 12 November 2007.
Economic Planning Unit Prime Minister's Department Malaysia 2008, The Malaysian Economy in Figures - 2008, EPU, viewed 15 January 2009, .
Ennew, C & Waite, N 2006, Financial Services Marketing: An International Guide to Principles and Practice, Butterworth-Heinemann.
Gunasegaram, P 2008, 'When local banks are safer', The Star, 20 December 2008.
Hamel, G 2002, Leading the Revolution, Harvard Business Press.
Hendrickson, D 2008, 'Revamping regulators', Asian Banker Journal, no. 84.
Johnson, S 2009, 'Confidence, Tricked', MIT Sloan Management Review, vol. Winter Issue 2009, viewed 20 January 2009, .
Karoub, J & Abbot, S 2009, 'Finance the Islamic way at Michigan Bank', The Joplin Globe, 13 January 2009.
Lovelock, CH 1999, 'Developing marketing strategies for transnational service operations', Journal of Services Marketing, vol. 13, no. 4/5, pp. 278-95.
Meyer, LH 1999, 'Lessons from the Asian Crisis: A Central Banker's Perspective', paper presented to Ninth Annual Hyman P. Minsky Conference on Financial Structure, Instability, and the World Economy, April 1999.
Ministry of International Trade and Industry Malaysia 2009, 2008 Trade Statistics, MITI, viewed 22 January 2009, .
Nanavati, S 2008, viewed 22 January 2009, .
Nayyar, D 2006, 'Globalisation, history and development: a tale of two centuries', Cambridge Journal of Economics, vol. 30, pp. 137-59.
Poon, S-H 1999, 'Malaysia and Asian Financial Crisis; A View from the Finance Perspective', African Finance Journal, Special Issue.
Shanmugam, B & Nair, M 2004, 'Mergers and Acquisitions of Banks in Malaysia', Managerial Finance, vol. 30, no. 4, pp. 1-18.
United States Trade Representative 2006, Malaysia Trade Summary, USTR, 2009, .

Tuesday, March 10, 2009

A Hole in Tesco T-Shirt leads to a Big Day

Updated - Received a reply from Tesco on 7th April after my follow up. I've copied their reply and posted it in the comments below. Anyway, my recent visit to Tesco on 10th May 2009 showed that the issues are still outstanding, i.e. same missing price tags and salesperson telling us to take a similar priced item to the check-out counter. I have replied to Tesco's email on the same day (1o May). Let's see what they reply.

To date - 2nd April, it is now nearly 1 month and I have yet to receive a reply. Today, I have sent another f/back based on their online form.

My Feedback to Tesco thru their website. I have removed the individuals' name in this blog, which I had mentioned in the actual feedback form to Tesco. :

Dear Sir/ Madam,
I can either write this feedback in a rude and proud manner as how my wife and I were treated at one of your outlets, or be diplomatic and civilized. And I'm choosing to be the latter.
Today 9th March 2009, around 10.50pm, I went to Tesco Jelutong, Penang to complain about a T-Shirt my wife bought. We bought it on 27Feb2009, and agree that it is past 7 days as your personnel, a Mr Ixxxx Axxxxx (ID 7xxxx) explained to us rather impolitely. I explained to him clearly that yes, the return policy states 7 days, however I am not returning this product neither because we don't like it nor it does not fit. The issue is that a DEFECT product was sold to us by Tesco. It was not a 'clearance' item, nor an item indicated 'reject' anywhere on it. The fact was that there was a hole in the T-Shirt. On that day alone we bought up to 7 T-Shirts from Tesco. And how are we to assume that the T-Shirt would have defects and check each and every or can say we trusted Tesco. Mr Ixxxx further goes and tells us that at least Tesco practices a 7 day return policy where other Hypermarket practices around 4 days return policy only. I replied, "Sorry Mr Ixxxx, Giant also practices a 7 day return policy for non-perishable, and 2 days return for perishable good". It is surprising that your staff has got his facts mixed up. By the way I didn't come there to debate about Tesco and Giant with him.

I request to speak to the Supervisor, and after waiting around 10 minutes, a Madam Lxx comes over. We have the same discussion over, and I explain to her that I was sold a DEFECT product. And she adds that the T-Shirt does not have the tag in-tact. I clearly explain to her, that one the time and date of purchase, the Price Tag was ALREADY missing. After asking a salesperson there on 27Feb 2009, she says take along a similar T-Shirt from the same rack, pointing the T-Shirt to us, and telling us to tell the cashier to scan best on this REFERRAL T-Shirt which was of to be of similar price RM7.90. Madam Lxx goes and talk to her team for a while and comes back again to me and tells me, "But there is no price tag". Either Madam Lxx is a very forgetful person or thinks I'm lying and trying to exchange a non Tesco T-Shirt with Tesco. And it is the least to say that this sounded very rude to me. I again explain to her the same thing, not to forget politely. This time telling her, that if she doesn't believe us, then lets go to the clothes section and see how many T-Shirts can we find without a price tag. I tell there that I am very sure that in less then ten minutes I'll find her some.

Tesco T-Shirt with the hole. Not clear as we only had our camera phone with us

After wasting another approximately 20minutes of our time discussion internally with her team, she says we can go and take an exact T-Shirt to replace, and walks of rudely. Before I get a chance to tell her. Would anyone logically thing I would take a T-Shirt without a price tag IF there was a same exact T-Shirt which had the price tag? Excuse me.

Anyway we both walk to the clothes section and in LESS THEN TWO MINUTES we find SIX T-Shirts without a price tag. Well, now anyone still wondering WHY we bought a T-Shirt without a price tag. We show these T-Shirts to another salesperson nearby, as I mentioned, Madam Lxx had already 'disappeared. So the salesperson say ok, then please take another T-Shirt of similar price. I said, NO, The Tesco Supervisor on Duty, Madam Lxx, strictly told us to take an exact replacement. And now Madam Lxx re-appears. I show the the 6 T-Shirts without price, and tell her, so here's some proof that Tesco is selling stuff without price tags, so PLEASE do not ACCUSE us of not having the price tag once we have explained the reason why. And now we tell Madam Lxx, so how, since there's no exact matching replacement. And yes, we explain to her in simple logic, why would we in the first place take a T-Shirt without a price tag if there was an exact same one available with a price tag?

And at last Madam Lxx agrees to take any other, with no apology. Ms Rxxx (not sure of exact name) was very patient and professional, and a Thank You to her.

Actually we understand it is your policy regarding the 7 days policy and that your personnel are following the policy which they should and we appreciate it. However, the same process above could have been done politely and professionally, and avoided us from writing this feedback and blogging about our experience at 12.30 midnite.

In summary
The rudeness and proud-ness of both Mr Ixxx and Madam Lxx, has painted a very negative impression on us for Tesco, especially my wife who prefers to shop in Tesco. Believe it or not, we were in Giant the day before and she says, she'd rather go to Tesco to shop the next day, and use the RHB Tesco Card instead of the the Giant Citibank. Well after this lousy experience and a waste of our time waiting for the Tesco personnel to figure out what to do, we didn't have any time left to shop in Tesco. And nor do I think we'll be visiting Tesco anytime soon.

In fact we were planning to blog how Tesco price is cheaper compared to the other hypermarkets, eg selling Nescafe 3-in-1 significantly cheaper then Giant based on our latest comparison and many more.

In fact it is saddening for us to go thru such an un-delightful experience in Tesco, after having blogged positively about Tesco's Green Enviromental Friendly Policy at http://fyi-penang.blogspot.com/2008/03/tesco-bag-for-life-guranteed-for-life.html
and also a detailed and rather positive review of Tesco-RHB's newly launched Credit Card at http://fyi-penang.blogspot.com/2009/02/giant-citibank-compared-to-tesco-rhb.html
Also, if Tesco strictly wants to practice not price tag policy, please also strictly ensure
i. All your goods on sale are tagged.
ii. If a customer discovers an item no tagged, instead of asking the customer to take a similar item for the cashier to scan, your personnel should immediately attach the correct price tag to the item. We have also experienced before when asking for an items price which was not tagged, after 15minutes of searching high and low, the personnel comes back to us and say sorry, not sure what's the price.
iii. Please put up sign-boards informing customers NOT TO PURCHASE any Tesco items that are not tagged or be ready to be accused in case of return of goods, and for the cashier not to accept similar items to scan.

As a loyal and frequent customer of Tesco, who has come 'close' to Tesco, this feedback is not meant to be personal or towards any individual. Rather it is the frustration of how we were treated. In fact some time back, when in one of the McDonald branches in Penang we 'discovered' a dead bug in our fries, we just complained to McDonalds Malaysia, and later decided not to blog it because the branch called us an apologized to us and provided a corrective action.

ps- Don't forget to take your digital camera with you when you have a complain, it'll come in useful.

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