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When Refash launched in 2016, women in Singapore praised the local fashion startup: it was a sustainable way to sell the pile of unnecessary clothing in their closets and buy used clothing at a bargain price.
The company has had some success since then, now with nine Refash outlets across the island. But while shoppers are more than happy to find stylish second-hand outfits at rock-bottom prices, the same sentiments can’t be said for those who have sent in their old clothes for cash.
Recently, there has been widespread hostility towards Refash and the main complaint is this: They have not yet received any of the promised payments from the company months (or even a year) since they delivered the unworn clothing.
Three months ago, a Redditor questioned whether the platform is a scam after not receiving his $ 30 payment despite months of chasing it. On Google, 39 out of 43 user reviews are negative ratings on the same issue of not seeing your money transferred.
On Instagram, an account with the identifier @ refash.reveal posts dozens of comments from Refash sellers who have similarly not received their payments; some have even claimed that the money owed to them amounts to hundreds of dollars. Police complaints have also been filed against the company.
https://www.instagram.com/p/CDQnhzUB8n8/
https://www.instagram.com/p/CEBKv1lhPLP/
‘No intention of default’
“I really feel your pain,” Refash founder and CEO Aloysius Sng told AsiaOne when asked about the retaliation online.
The 32-year-old man clarified that the company has no intention of defaulting on the money owed to its sellers on the platform; it will only take some time to process and settle payments, he said.
According to Sng, the reason for the severe delays in compensation is due to a combination of a revamp of the business model and setbacks from the Covid-19 outbreak.
Initially, the operation of the platform is to make users create an account on the Refash website and submit their unwanted garments for sale. If your item has been purchased, the seller will receive a percentage of the proceeds from the sale.
This pay-for-sales model, as they discovered, was not sustainable. In early 2019, Refash began switching to a model where sellers would simply get a quote for their clothing and receive a fixed amount of money for the package, regardless of whether the clothing was purchased in stores or not.
Just as the company began to produce better margins and generate enough profits to pay sellers on time, the pandemic struck and the circuit breaker suspended retail operations. This exacerbated the delays in compensation, although Sng claimed that the company is indeed making progress in meeting payments on a daily basis. Although the company cannot continue to pay all of its vendors on time, between 20 and 30 cases are resolved each day, he said.
The CEO also told AsiaOne that he had also reconciled with the police, who found no reason to investigate him after he showed evidence that sellers were being paid, albeit at a slower rate. According to Sng, around 30 complaints were filed against Refash regarding delayed compensation.
However, Sng said he is confident that the company will be able to clear payments to everyone who is owed money before the end of the year, provided there are no further business interruptions.
When asked why Refash continues to sell and accept second-hand clothes despite facing difficulties in compensation, he said that keeping its stores stocked and running is the only way to continue to earn income to pay people.
https://www.facebook.com/refashsg/posts/10157802551586235
“We are here and we still want to pay our vendors,” Sng said.
As for why Refash has not really compromised or fought criticism against the brand, he said “it would not do any good”, since the only way to appease them would be to keep their promise to pay.
“I would like to extend our sincere apologies to the sellers and ask for a little more time and patience,” said Sng.
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