Consumers who buy prepaid packages from spas will get an additional layer of protection under a programme launched yesterday.
The money paid will go into a fund managed by smart card system operator EZ-Link, and will be dispensed to the participating beauty company each time a spa session is redeemed.
Should the spa operator go bust, EZ-Link will return the unutilised funds to the customer.
So far, 12 businesses have signed up for the programme, called Trust, managed by EZ-Link and supported by the Spa and Wellness Association of Singapore and the Consumers Association of Singapore (Case).
The industry's reputation took a beating in 2009 and 2010 when a string of spas closed down suddenly. Thousands of consumers were left in the lurch with paid-up but unconsumed spa or facial sessions.
"The trouble with many businesses is that they collect money upfront and use it for purposes other than to provide service for the customer," said Case executive director Seah Seng Choon.
He added that under Trust, consumers can be assured that their money is protected, as it is held by EZ-Link, a third party that is regulated by the Monetary Authority of Singapore.
Consumers who buy a package from participating merchants will be given a Trust card. They can use it to check their account balance, transaction history and the expiry date of their package. Customers with multiple packages can also store the various package values in one card.
EZ-Link chief executive Nicholas Lee said the programme may be extended to other industries with prepaid payment options in the future.
The first to sign up with EZ-Link was Chinois Spa, which previously did not offer prepaid packages but will do so now. Said its director, Mr Eddie Wong: "We don't believe in holding on to people's money because we'll be tempted to use it to expand the business."
The Trust programme is also another option for businesses that have earned the CaseTrust accreditation by the consumer watchdog, which certifies a business as fair and honest.
Under the CaseTrust requirements, spas offering prepaid packages have to either insure its customers against sudden closures or sign up for Trust.
D'Skin is another beauty company that has joined Trust. It currently does not offer insurance for its customers as the premiums make it costly, said deputy general manager Joyce Chu. "Hopefully, (the customers) will be more assured now that I've signed up for the Trust programme."
Ms Liew Mee Lain, 44, who bought a $2,000 massage package from Verita Advanced Wellness, which closed down suddenly in July last year, thinks that getting her money back would have been easier, had the Trust programme been launched earlier.
"But I'll still consider the spa's reputation... before I sign up for any package now," she said.
This article was first published on May 6, 2015.
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