Hong Kong beauty companies sit pretty as customers pack it in
Consumers claim they would rather forgo remaining sessions to avoid further aggressive sales tactics
Top health and wellness companies are pocketing a third of their profits from unused beauty treatment packages, according to a Democratic Party report.
Consumers said they felt pressured to sign up for packages and would rather forgo remaining sessions to avoid further aggressive sales tactics.
The report looked at the 2015-16 financial statements of three companies, Sau San Tong, Union Medical Healthcare and Perfect Shape Beauty Technology, which are listed on the stock exchange.
A third of the firms’ earnings came from unused services such as facials, laser and slimming treatments, statements showed.
Customers pay in advance for packages either as a lump sum or by credit card instalments. Companies do not pocket the cash until packages are used or expire.
UMH made HK$252 million out of HK$667 million in revenue from unused services, or 37 per cent.
Some 70 per cent, or 5,881 out of 8,400 customers, did not finish their packages by March 2015, the UMH annual report said.
“I don’t believe consumers will willingly throw their money away,” Ramon Yuen Hoi-man, consumer rights spokesman for the party, said. “A lot of them felt pressured by staff who tried to sell them packages.”
Complaints about sales practices arose last year when a disabled man accused a fitness chain of using strong-arm tactics to force him to sign multiple contracts, leading him to take out a HK$700,000 loan.
In response to inquiries by the Post, UMH said on Tuesday customers could receive a full refund within seven days of making purchases, and staff were required to give the expiry dates of packages sold.
“In the past year, the company has not received any complaints or requests for refund on any unused prepaid service treatments,” it added.
The Post reached out to the other two companies seeking comment.
In another case involving yet another company, a fresh graduate who asked only to be identified by her surname Wong said she and her mother bought HK$70,000 worth of facials. The two accused salespersons of overselling packages that they would be unable to finish before their expiry date.
Wong, 23, said she first bought a bundle of 42 facials that she had to finish within a year.
“After a trial, three of the salespeople cornered me in a room for two hours, trying to get me to buy their discounted package,” she said. “They told me I could finish it in a year if I did it more frequently.”
Wong said she signed a contract not knowing it stipulated that each treatment could only be performed every 21 days, meaning it would take her at least two years to finish the entire treatment.
The Democratic Party is seeking legal advice on behalf of the pair and plans to submit the case to the Small Claims Tribunal.
Yuen said the beauty services industry should be regulated and that a cooling-off period should be introduced to give consumers a chance to change their minds and get a refund.