Chinese appliance giant Gome in receipt scandal
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Gome Electric Appliance Holdings said it would conduct checks after China's central television company reported the company's improper conduct during trade-in transactions.
Staff from several GOME outlets in China's northern Tianjin and Beijing cities were allegedly selling trade-in receipts to people as a way of attracting customers and boost in-store sales.
Customers who didn't possess a used electric appliance for trading in could buy a receipt from shop staff for 80 yuan (US$12.2) and thus qualified for government subsidies of as much as 400 yuan, granted through China's trade-in policy, CCTV discovered.
The Beijing Municipal Commission of Commerce removed the rights to conduct trade-in transactions at three GOME outlets and ordered the company to correct its behavior.
The Guangzhou-based retailer yesterday apologized to customers through a statement and said that it would conduct investigations to prevent further violations of the trade-in regulations, and would compensate for customers' losses if their discounts had been doctored by GOME staff.
China implemented a trade-in policy in 2009 to boost consumption of electrical appliances. Under the policy, the government offers as much as 400 yuan in subsidies when registered residents trade in used electric appliance in licensed local stores.
"There is no tolerance for companies who cheat on government subsidies in order to boost sales," the BMCC said in a statement.
In order to ensure the smooth operation of trade-in policies, the BMCC also pledged to severely -punish companies if they violate the regulations.
Spokesmen from both GOME Electric Appliance Holdings and Suning Appliance Co in -Shanghai said that all their outlets in the city are complying with trade-in policies correctly.
