CONSUMERS of spas and beauty salons want to be protected.

That was the finding of a study of 149 people by Republic Polytechnic (RP).

The survey was to gauge their response to an insurance scheme offered by the Spa and Wellness Association Singapore (Swas) in July, a move to regain consumers’ trust after the industry was hit by a spate of abrupt closures.

Most of those surveyed said they were more likely to stay with the salons they are currently patronising if they offer package warranties.

Most said they were likely to splurge more on packages if they had such protection.

Only Swas members – there are 300 now – are eligible to join the insurance scheme.

AVA Insurance Brokers will compensate their customers for the unused portions of their packages if they shut down.

But when The New Paper checked with the insurance company, only two beauty salons and one gym have signed up for the insurance plan.

They are BioFocus International, Beaute Hub International and Contours Express. BioFocus has one outlet and Beaute Hub has two. Contours Express, a fitness chain that caters to women and has over 2,000 customers, has 13 outlets, each run by a different franchisee.

Only 10 franchisees have joined the scheme.

AVA Insurance Broker’s CEO Michael Chew, however, said the company has received many calls expressing interest and is expecting “a lot more” to join.

Subtle Senses CEO Gerald Lim said that while joining the scheme is probably a “matter of time”, he is deterred by, among other reasons, the high insurance premiums and limited coverage.

Mr Chew said companies covered by the insurance have to pay an annual premium of 3 per cent of a warranty sum, which is determined by the estimated worth of the company, based on its financial reports and its facilities.

At present, the scheme covers up to only $2,000 per customer, regardless of the premium a company pays.

Mr Lim said he intends to round up a few industry players to get a better deal from insurance companies.

“This way, we can bring premium prices down and provide better coverage,” he said.

Not a factor for some

However, four regular spa-goers we spoke to said insurance protection would not be a factor when it came to deciding if they would sign up for packages.

Civil servant Lynn Tan, 37, was one of 500 customers left stranded when spa chain Wellness Village shut down last November.

She said: “Given the restrictions (for instance, the cap on payouts), I will have my reservations in signing up for an insured package.”

Another consumer, Miss Lim Yu Hui, 30, a marketing executive, has, since June, signed up for five packages worth $5,000 in total with various massage and beauty parlours.

She said: “I select a spa based on its reputation and Internet research. If I signed up only with spas that offer insurance, my choices would be severely limited.
“When only a few sign up, I would rather take a gamble than be limited to a few choices.”

The three companies that joined the scheme said they would not pass on the costs to consumers.

Last year, the beauty industry was the second-most complained-about industry, based on the number of complaints received by the Consumers Association of Singapore (Case).

The timeshare industry drew the most complaints.

Mr Seah Seng Choon, Case’s executive director, said consumers should agree to pre-paid packages only if there is assurance of protection for their payment such as insurance.

“Short of such protection, the safest way for consumers is to pay as they use,” he added.

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