Wed | Jun 19, 2019

Yaneek Page | Can money-back guarantees work in Jamaica?

Published:Sunday | February 18, 2018 | 12:00 AM
A popular shopping area in Kingston showing retail outlets. Jamaican consumers have a right to refunds and returns under the law.

QUESTION: I have been following you for some time and appreciate the advice you give to entrepreneurs. I have been living in the USA for more than 20 years and now I am thinking of starting a clothing and accessories business in Jamaica.

I have seen where you are constantly encouraging new entrepreneurs to ensure that our businesses have differentiated or unique value proposition. I've thought long and hard about doing something unique, and I want your opinion on it.

I have done research on some clothing stores in Jamaica which could be my competition, and none gives you money-back guarantees. Most have strict refund or exchange policies to prevent refunds and exchanges. I want to be the first store to offer money-back guarantees and easy exchanges. Do you think a money-back guarantee can work in Jamaica, or will people take advantage and abuse it?

- Nash


BUSINESSWISE: I am encouraged by the way you think. A few weeks ago, I visited a Bath & Body Works store in the United States and couldn't help but smile at the beautifully crafted floral backdrop, strategically located behind the cashier, with the following words inscribed in calligraphy:

"We want you to LOVE it. If for any reason you are not 100 per cent satisfied with your purchase, you may return it for a full refund with no questions asked."

The spirit and nature of that unqualified money-back guarantee captured for me the main purpose of business, which is to create customers who are so completely happy with every purchase that they will be motivated to come back repeatedly.

It is wonderful that you want to invest in Jamaica and offer such refreshing service to the public, notwithstanding, I have several concerns about unqualified and unlimited: money-back guarantees for apparel and accessories both in store and online.




It is important to dispel the myth that your competition does not offer refunds, exchanges or warranties, and that by doing so, you would have a unique competitive advantage.

Although many stores don't acknowledge or promote it, Jamaicans are entitled to certain warranties as consumers, including full refunds or exchanges where the goods were unfit for purpose or shoddy as outlined by the Consumer Protection Act, which can be found at

In fact, providers who are in breach could be fined up to $500,000 or face imprisonment of up to six months. It would be useful for you to read the entire 44-page law and the several other laws dealing with consumer rights and fair competition which can be found on the website of the Consumer Affairs Commission Jamaica.

One thing consumer-protection laws do not address, which you seem to want to implement for a strategic advantage, is buyer's remorse and the ability to easily change one's mind after making a purchase without consequence.

While this is a benefit that Jamaican consumers deserve, it is uncommon and one wherein you should exercise caution in executing in anticipation of the level of maturity of the market and cultural nuances.




As you noted, abuse of privilege is a valid concern, therefore, you could consider implementing several safeguards, such as a formal money-back guarantee policy - to include conditions for exchange and refunds - visible in store and on your website, and printed on the back of each receipt.

You could also include special labelling and security tags that once removed or compromised due to wash or wear would void any warranties or guarantees.

However, even if you can manage the risk of fraud and abuse, you still need to account for the significant cost and losses you will likely incur in handling returns.

In the US, the problem of mass retail returns and associated losses is so significant that one report called it a 'ticking time bomb' for online shopping. Retailers are struggling to manage huge returns of up to 10 per cent of all apparel purchases made in store and up to 40 per cent of all purchases made online. It is estimated that the cost of managing these returns is up to 10 per cent of the value of the items.

To make matters worse, most returns must be heavily discounted in order to be sold, due to soil or damage.

The reality is that while your heart and entrepreneurial spirit may be in the right place, the economics of money-back guarantees may not be.

One love!

- Yaneek Page is an entrepreneur and trainer, and creator/executive producer of The Innovators TV series. Email: Twitter: @yaneekpage. Website: