Watch out for the 'watch scam' BY DATUK ALAN TONG

by **Cals** Mon 10 Feb 2014, 05:36

Published: Saturday February 8, 2014 MYT 12:00:00 AM
Updated: Saturday February 8, 2014 MYT 1:48:20 PM
Watch out for the 'watch scam'
BY DATUK ALAN TONG
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What is too cheap to be true may be just that
“IT’S unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money – that’s all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do.
The common law of business balance prohibits paying a little and getting a lot – it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.” a quote from John Ruskin (1819-1900) who was an art critic, an artist, an architect and a philosopher.
This quote has often reminded me to be careful of always going for the cheapest item or award to the lowest tender offer, especially when the price is too good to be true. For instance, I heard recently at a gala dinner that many guests were attracted to a booth that displayed branded watches outside the grand ballroom prior to the dinner. Several guests made purchases as the price of the watches were irresistibly cheap at merely 5% to 10% of the original price and were given to believe that the watches were genuine Swiss brands, except that they were manufactured in another country.
When the dinner started, the event committee came to realise that the watches were fake watches. They were given the impression that the watch exhibitor was there to display their watches for branding purpose only. Unfortunately the watch exhibitor was long gone before the scam was exposed and the event organiser was obliged to make a shocking announcement and assured the affected guests that they would pursue the matter.
I admire the transparency and the immediate action taken by the event committee to address the scam during the dinner. At the same time, it was a reflection that sometimes there is no such thing as “cheap, beautiful and good” in one package, as shared in one of my previous articles.
The above incident is a real-life example of paying too low for an item can end up leaving us the loser. Scarier incidents can tantamount to losing huge sums of money as sometimes published in the newspaper, like the get-rich-quick schemes, or the purchase of stolen cars or houses with caveats.
It is a known fact that when you pay a premium for a good quality product and to a reliable source or producer, you can be sure that you have paid for a longer lasting product that will end up saving you money in the longer term. Some lucky ones will end up gaining much more.
Quality products come with a higher price tag due to the research, effort, materials and services involved, just like the Swiss watches that are associated with durability and high quality.
The same principle applies in many buying decisions. When we purchase a car, we should consider its resale value as some cars hold up well, while others collapse in value after a short period. Other determining factors include the specifications of the car, the after-sales service, and the availability of spare parts. Same goes for items such as household appliances. Most of the time, the premium for good quality products are worth paying due to their quality that gives us peace of mind.
Purchasing a property also requires the same level of sensibility to other key factors apart from the price. To many, acquiring a home is a one-time purchase while others have the opportunity to make at least one additional purchase. Yet, how many would have the experience to consider all factors before deciding to acquire a property? It is important to research the background of developers and projects, consult experienced homeowners regarding the good and bad of a project before committing.
In the overall context of a sound purchase, it is important to balance between price, location and quality. An important phrase to note: if the price of a product is considered too low for a business to operate profitably, it is then true that the same business would not produce a quality product.
As reflected in John Ruskin’s quote mentioned earlier, buying cheap can land us in trouble if the product does not serve its purpose and cause us pain instead. Years of experience tells me that, what is too cheap is too good to be true. So the next time you see an exhibition of cheap “Swiss watches” in a public space, you might want to just walk pass it.

FIABCI Asia-Pacific regional secretariat chairman Datuk Alan Tong has over 50 years of experience in property development. He is also the group chairman of Bukit Kiara Properties. For feedback, please email [You must be registered and logged in to see this link.]