July 31, 2013 by    

96961 envelope VoucherGone: Customers upset with daily deals site VoucherWow over missing ...

Update #1: VoucherWow has responded. Read the article or see unedited response at the bottom.

Update #2: Article is changed to reflect more accurately who the co-founders are.

96961 voucherwow VoucherGone: Customers upset with daily deals site VoucherWow over missing ...


Singapore daily deals site VoucherWow has come under fire from consumers lately for undelivered items.

An online search has found over 30 identifiable complaints made against the site since 2012 on Facebook, mostly over displaced orders and unresponsive customer service. Allegations that complaints were deleted from their Facebook Page have also been made, along with gripes about receiving fake items and defective products.

That’s not all. The unhappiness has spread to the blogs and forums, and the comments on these blog posts are filled with horror stories.

Dexter Chan, a sales support executive, wrote that he ordered a voucher for a portable USB air humidifier that expired on 9 November 2012.  He did not receive the item after a month.

When he contacted a staff member for a refund, he was told that his request was being processed. But he never heard from them again. As a last resort, he left a comment on their Facebook Page, only to have it deleted.

When I contacted Dexter, he told me that he still has not received the item, nine months after the expiry date.

“I decide to stop pursuing them for the money and the goods because the amount is less than $10 and it’s not that worth it pursuing,” he said.

Another unhappy customer is Rohaizad Abdul Wahid, a technical operations manager.

He ordered a night light from VoucherWow and was told to collect the item by 1 July 2013. With his three-year-old daughter in tow, he traveled to the stipulated location to collect it, only to be told on arrival that there has been a “shipment delay”.

A staff told him that they did send out an email informing affected customers about the hiccup. He insisted that he only received the email after he visited the location.

“It’s pretty devious to claim you sent a notification email out when you clearly did not do so and then to try and pull a fast one by sending it out after the customer turns up,” he said.

Having given up, Rohaizad decided to ask for a refund. They refused him, saying that the best they can do is credit to his account.

“I am not unreasonable so I did say I will accept a store credit if I can claim for an item on the spot. No reply from them after that,” he said.

He plans to make a police report if nothing is done by the end of the month.

Alex Bono, COO at 42 Ventures, a company with ties to VoucherWow, has attributed these missteps to “operational issues” that are occurring because the company is growing in terms of traffic and sales, which leads to operations sometimes falling behind.

“VoucherWow has always been meeting all its payments and delivering for customers. We’re proud of being one of the group buying companies that has survived in Singapore,” he told me via email.

Recently, the company has begun focusing on products rather than services, which meant the development of capabilities like redemption centers, on-time delivery and so on.

Alex has promised continuous changes and that the company will “keep pushing” to improve its service.

Missing orders uncommon for e-commerce sites

While online complaints against e-commerce sites are common, it’s rare that a company has attracted such disproportionately negative attention.

Even for Zalora, a huge fashion e-commerce site that has handled one million orders in 18 months, online complaints mostly centered on customer service, wrong items delivered, or missing items in a basket.

But hardly the disappearance of entire orders.

Other e-commerce business owners have told me that displaced items are a small part of the customers’ gripes.

Reuben Lee, who ran Household.sg, an online grocer in Singapore, told me his customers hardly ever complained about items failing to turn up.

“Delayed, yes, but never undelivered,” he said, putting delayed shipments at under five percent of total orders. “In Household we ran our own delivery vans, so we’ve never encountered cases of items not being delivered.”

At Reuben’s current startup ShopAbout, he has carefully picked a courier partner that he believes can perform at scale and possesses experience dealing with e-commerce. Proper relationships have been built to ensure problems can be swiftly dealt with, and standard procedures are in place when things go wrong.

“There’s a paper trace for everything. In the worst case scenario, because there’s paperwork, the courier partner also offers their own insurance up to a certain dollar amount. So even if the item really gets lost in transition, there will be a monetary compensation from the courier partner,” he said.

For one major online retailer, which declined to be named, missing items happen in less than one percent of total orders.

In fact, most displaced orders are rooted out on the first pass, and the company would go out and purchase them to fill the basket before they were sent out to ensure that the customer’s needs are looked after.

And in the event of a discrepancy, the company would offer refunds or an exchange for other products of similar value prior to the delivery.

“We are working hard to bring that number down even further and it is one of the key KPI’s our warehouse team is measured by,” said the founder.

Zalora too has a refund policy in place, offering free returns for up to 30-days after delivery.

While online retailers typically handle their own fulfilments, group buying sites often let their partner merchants handle that aspect of the sales cycle.

Therefore, a failed delivery could have many potential causes, from the inability of a business to handle an overwhelming volume of orders, a weak order tracking system, a group buying site’s delay in payments to merchants, who then arbitrarily decide not to fulfil customer orders, and so on.

Customers hung out to dry

In Singapore, consumers can file a complaint against a merchant at CASE, a non-profit consumer rights organization.

However, CASE has no legal authority, and can only mediate disputes if both sides are willing.

There’s another problem: the mediation process  involves annual membership fees and a per-case admin fee of SGD 10. Without fees, CASE can still draft a complaint letter on a consumer’s behalf to the retailer, but it will not assist in the follow up.

A check with CASE has showed that no complaints were filed against the company.

Going to the Small Claims Tribunal is a legal option, but it is costly and lengthy and would deter most daily deals customers since the items they purchased are unlikely to be expensive in the first place.

This leaves shoppers on their own with no viable recourse, and may deter them from shopping online. While consumers can be more careful in researching where they buy from, e-commerce firms will have to work doubly hard to prove that they’re dependable.

VoucherWow was started in 2010 by Atilla Torgay at the pinnacle of Asia’s daily deals craze. Atilla also runs Brandsfever, a flash sales site.

Since then, the performance of group buying sites has been less than stellar, with shutdowns, botched lawsuits, and customer complaints plaguing the industry.

Outlet.com.sg, a defunct daily deals site, also attracted its fair share of controversy. Angry customers for that business have set up a Facebook group to compare notes, attracting over 700 likes.

However, Singapore market leaders Groupon and Deal.com.sg seem to be doing well. Last year, Groupon Singapore launch a retail store in sprawling mall Suntec City. Deals.com.sg is also on an upward trend, doubling in revenue in Malaysia while registering double-digit growth in Singapore.

The company is making about USD 50M a year from daily deals, with the Singapore site making USD 3M a month and the Malaysian site USD 1.3M. It has also expanded into the food delivery business.

VoucherWow’s full response (unedited):

Actually the issues you point are operational issues in the most of cases and that is why we need to time to find out exactly about it.

Just note  that Voucherwow is together with beeconomic one of the first groupbuying, and I will keep being, however with more humble approach. Also Voucherwow resources are not as huge as may be groupon, however the people working here is committed and loyal to the company. We treat the personnel as human beings.

Usually those issues you named are facing when the company grows. You can see Voucherwow has been growing in the last months and now we are 341 alexa, even ahead of reebonz. Our traffic is growing. Then means more sales and pick up with the operations sometimes falls behind. Unfortunately, yes, some times Voucherwow fail to keep happy to the customer due to many reasons. The approach is always to listen and to solve the origin of the problem, not the issues. However is something that we try to fix for the long run. After more than three years in the market Voucherwow has been always meeting all their payments, delivering customers, and being proud of being one of the groupbuying companies that has survived in Singapore. Not many can tell that. Here we are also proud of employing Singaporeans, even if many times we face issues of personnel shortage. The talent battle in Singapore is very aggressive and getting good hires takes often time.

Last comment also, the approach of Voucherwow turned more into products therefore other capabilities were required to adapt to it (redemption center, delivery on time, etc…) and it has taken some time to adapt, and yet continuous changes to have better delivery.

Our dream is to feature the best products to our customers, with  the best price and deliver the goods on time. No doubt Voucherwow will keep pushing to make all this happen.

Find out more about SGE’s research arm: SGE Insights, providing customized in-depth research reports to help you navigate the business of technology in Asia.

About The Author

96961 980 VoucherGone: Customers upset with daily deals site VoucherWow over missing ...

Terence LEE – Editor

Terence writes mainly about technology trends and startups in Asia. He believes in crafting smart content: Not just a regurgitation of text, but well thought-out pieces that serve the reader using a combination of data, design, narratives, analysis, and visual impact. His articles have been published on Venturebeat, Yahoo!, Straits Times, Today, and The Online Citizen. He also co-founded NewNation.sg, a satirical news site covering Singapore affairs. Engage him on LinkedIn and Twitter.

Read other posts by Terence LEE