Seller beware

There is a famous Latin phrase in contract law, caveat emptor, which means “let the buyer beware.” This is but logical as in any sale, the buyer has less information about the good or service being purchased and it is usually only the seller that is aware of any defects thereon. This is called information asymmetry.

But a 2010 Department of Trade and Industry (DTI) administrative order provides the opposite. This pro-buyer Administrative Order 10-04 sets guidelines on the issuance, use and redemption of gift checks, certificates or cards. Issued during the watch of then Secretary Jesli Lapus, these rules are in line with Republic Act No. 7394 or the “Consumer Act of the Philippines.” Which, among others, mandates the State to “promote and encourage fair, honest and equitable relations among parties in consumer transactions and protect the consumers against deceptive, unfair and unconscionable sales acts and practices.”

The DTI concluded that the placing of expiration dates on gift checks, certificate and cards is unfair sales act. It recognized that the latter represent value held in trust by the issuer thereof (i.e., the seller) on behalf of its beneficiary/buyer, and so it promulgated the rule so that the latter is not unduly deprived of his money.

Thus, commencing July 1, 2012, any supplier can no longer issue and/or sell gift certificate/check/card that contains an expiry date. Holders of unused and unexpired gift checks/certificates/cards after June 30, 2012 shall be entitled to replacement after revalidation by the suppliers.

Certain suppliers sought to invalidate the order but on December 13, 2013, the Department of Justice under Secretary Leila de Lima issued an opinion sustaining its legality. DoJ Assistant Secretary Geronimo Sy who heads the Office for Competition, said that “gift certificates are equivalent to cash and cash does not expire.”

To be fair, gift checks/certificates/cards that are lost mutilated or defaced through no fault of the supplier or distributed by the supplier to consumers under an award, loyalty or promotional program are not covered by the Administrative Order. Gift certificates connected to promos are exempted from the no-expiration rule as well.

Notwithstanding the order, I recently noticed that pre-paid mobile phone cards still contain an expiry date. In fact, an office mate complained to me that after such expiry date, these cards no longer work. So your four centavos has written Atty. Ramon Nolasco of the Consumer Welfare and Protection Division of the National Telecommunications Commission, to inquire about the continuing legality of this expiration date. It is argued that a prepaid telephone card and a gift certificate share the same basic purpose: a storage of a value to pay for specific items or services. Hence, the applicable rule for gift certificates should also be applied to prepaid telephone cards. I will let you know if and when a response from the NTC is received. 

Speaking of mobile telephone and internet providers, Atty. Teddy Boy Locsin in his Teditorial the other night spoke about a UK report showing that the Philippines having the slowest LTE (Long Term Evolution or otherwise referred to as 4G) broadband and internet access among the 16 countries surveyed. We were also last in terms of time spent on LTE. The findings of British firm OpenSignal were based on data provided by the six million users of the application. Unfortunately, our two main providers, Globe and Smart, were classified under “poor coverage and slow” in the quadrant graph entitled “The Breadth of LTE Performance.” Apart from poor LTE connection and the growing frequency of dropped calls, their subscribers have also been complaining about the networks’ data caps on unlimited postpaid plans when after reaching a certain limit, 3G connections are reduced to 2G, further slowing down data retrieval. The NTC should look into these issues as well.

*      *      *      *

Consumer power: My Taclobanon colleague, Maita Chan-Gonzaga, highly recommends a visit to the Bangon Negosyanteng Bisaya at Megatrade Hall 3 this week-end.   Considering the devastation brought about by typhoon Yolanda, patronizing the native products would help in stimulating the affected local economies. Given her predisposition, she vouches for Vino de Coco — Tacloban’s world-class coconut wine.  You may also consider purchasing banig products and other local delicacies.

*      *      *      *

In memoriam: Today marks the 50th death anniversary of Gen. Douglas MacArthur.  He died in Washington, D.C., on April 5, 1964, at the age of 84.  MacArthur visited and lived in the Philippines during several stages in his illustrious military career.  

He first served in the country in the early 1900s as a second lieutenant in the US Army Corps of Engineers. (His father, Arthur, also spent time here, having fought the Spaniards and subsequently appointed as military governor of the Philippines from 1900 to 1901).  Douglas was again stationed in the Philippines from 1922-25. In 1935, he served as chief military adviser to the Philippine Commonwealth government. Upon his retirement from the US Army in 1937, he was also given the rank of Field Marshal in the Philippine Army.  

In July 1941, MacArthur was recalled to the army to assume the position of Commanding General of the United States Armed Forces in the Far East.  Following the Japanese attack on Pearl Harbor, he was ordered to defend the Philippines. However, given the deteriorating military situation, he was ordered to leave for Australia on February 22, 1942 after delivering his famous “I shall return” message.  He did return to the country via Leyte on October 20, 1944.  

His final visit to the Philippines occurred in 1961 when he was awarded the Philippine Legion of Honor. 

*      *      *      *

Greetings:  With the passing of Douglas MacArthur came the birth of Dr. Angelo “Forest” Favis. However, Forest’s line of work is in music. He received his degrees from the Manhattan School of Music, San Francisco Conservatory of Music, and the University of the Philippines. Dr. Favis is currently an assistant professor at the Illinois State University School of Music.  Forest also turns golden 50 today.

*      *      *      *

“Hopefully you get what you pay for, because you always pay for what you get.” – James W. Love Jr.

Email: [email protected]