Tag Archives: credit

Buyer Beware…….

You might remember that I had two friends come visit from the United States in February. We had an amazing time and traveled through quite a bit of India. One of the places we visited was Jaipur. One of the things you are “supposed” to do when you visit Jaipur is go jewelry shopping.

So, we went to the historical sites first – then on the the sparkly stuff. We eeeew’d and awwww’d and tried on lots of fabulous jewelry. We joked how marvelous we would look in this piece or that piece. We tried on necklaces that cost more than a car and we laughed.

We also bought some jewelry. Yep, you know exactly where this is going. Downhill fast.

I want to be careful here not to say that we were not completely swindled. We were taken advantage of – no doubt. But to be honest, my friends trusted me to take them to a reputable place and then we all trusted that we weren’t totally being taken. When we handed over our credit cards, we did it willingly and after negotiating much better prices than we were originally quoted. We even got some free gifts – and yes, that should have been our very first of several warning signs.

The jeweler we met was charming and I am sure he saw us coming a kilometer away – we looked just like tourists straight off the elephant ride and I am sure he smelt rupees. He was patient and explained everything to us. He joked with us and, oddly enough, it turns out  he way over charged us. And like I said, we were happy to pay him because we foolishly trusted him.

Our first mistake was listening to me. I trusted someone with a jewelry referral who has done well by me in the past. But I should have gotten several names and we should have absolutely gone to more than one shop. And my friends and I don’t k.n.o.w. jewelry. Sure we know what we like and we know our price (breaking) points – but we didn’t really understand how the two coincided. That is what we call a big fat recipe for disaster.

So we bought jewelry. And a decent amount of it.

In fact, this ring was so fab that I decided to bring it home. I planned to wait on the bracelet and get it for a special occasion – perhaps my funeral when my hubby learned the full details of the story or my friends realized how badly I misdirected them.

I know, it is pretty, huh?

When we returned to Delhi and spread out our sparklees, my friend noticed that the ring she bought for her daughter was slightly off center. So, we called our guy. No problem. He had a friend traveling to Jaipur the next day and we could just give it to him and the jeweler would fix it and, yes, he would make sure we got it back in time for my friend to return to America with it in hand. Just as charming as we remembered. Promises, promises.

We were slightly concerned about giving this total stranger a pretty expensive ring and were having a hard time believing that it would actually end up at the jeweler in Jaipur. But we were armed with the knowledge that we paid with credit cards and had some protection. That turned out to be about the only thing we did right – pay with credit cards.

That same night we went to a party. My friend was standing with her new bracelet on her arm and it simply broke in 3 places. Nope, she didn’t bang it against a wall – and no, a kid on a skateboard didn’t rip it off her arm while scooting by – and no,  monkeys didn’t fly out of the sky and try to steal it – it just simply fell to the ground in 3 places. She had been wearing it for all of two hours.

That was also not a good sign.

So I called the jeweler and explained that we were not happy. No problem. He would gladly fix it. We asked what would happen if my friend wanted to simply return the bracelet – now that we are none too sure about the quality. We were starting to second guess ourselves about 2 days too late. “Oh,” he said, “that would take about 15 days.” When we explained that was not the right answer because my friend was leaving in less than a week, he simply replied, “that is how it works here. Fifteen days. Or I could bring you cash.”

Holy sapphire Batman.

I had never purchased a large item on a credit card in India and I had not returned anything. So, I didn’t know if this guy was pulling a (nother) fast one or if that was just the way it worked.

There is a jeweler that a lot of expats use in Delhi and I suggested we give him a visit. While there, we asked about the value of our remaining items. The Delhi jeweler (who is well known and well trusted) said that some of the pieces we had he would not even buy – no matter how low the price. It turns out they were hollow and not solid gold/silver pieces – that apparently lowers the value s.i.g.n.i.f.i.c.a.n.t.l.y. hmpf.

So, just for giggles, we asked him to tell us what he would have paid, if he had been so foolish to buy them. None of the pieces appraised at even fifty percent of what we paid.

Yep, I know there is a double sided game going on – if we return the jewelry to jeweler A, we might just have some rupees to spend at jeweler B. But the appraisals were so far off from the prices that we paid. We felt sick to our stomachs and really angry. And of course, I felt the worst of all.

We also asked the Delhi jeweler what would happen if we paid by credit card and decided to return something. That part of the story actually checked out. It appears that it takes about 2 weeks in India to get a credit back on a return. Yikes. Yeah that would have been good to know as well.

(Just a side note – This makes jewelry shopping in India pretty fun though – because the jewelers will let you take pieces home and think about them without paying for them yet. They don’t like dealing with the hassle of returns, so they want you to be sure you like it. And even if a few months after purchasing something, you decide it’s not for you, you can just bring it back and exchange it.)

We left the Delhi jeweler after learning lots and trying on more fun stuff – shhh, don’t tell hubby that part. And we called the Jaipur jeweler. I firmly explained that this was no way to do business with Americans and that I would truly understand if the items were valued 20 or even 30 percent less what we paid – after all, prices are somewhat subjective. But, one piece appraised at 10 percent of what my friend paid. I was shaking. I was furious. And I told him so.

He tried to explain that the price of jewelry is in the eye of the beholder and I further explained that the eyes of these beholders were steaming mad. He (wisely) offered to bring cash to Delhi the next day and pick up the jewelry. Excuse me? You will do what? Okay then. So we set up a time and crossed our ever-loving, ring-encrusted fingers. We laughed that if he offered to reduce the price, we might just keep the jewelry. We did love it after all.

Hubby – ever the pessimist – could not believe that this guy was really going to show up. Now it’s a funny story – but then – hubby was none too amused. My friends had the luxury of having their husbands in the U.S . – 8,000 miles away – and not knowing all the details. Me, I had Mr. Pessimist in all his glory. Not that he didn’t have reason to be doubtful. It didn’t sound or look good.

But half an hour early – God Bless him – that jeweler pulled up in front of the house. He had American $100 bills and he returned our money and took the jewelry back with him. He did not even offer to reduce the prices. I think it was fair to say that he was as done with us as we were with him. It was a pleasant enough exchange that ended with us both agreeing that we simply weren’t meant to do business together.

After he walked out the door and we all started breathing again, my friend looked up and said, “any chance these are counterfeit”?

“Only one way to find out,” I said and we marched ourselves right back to the jeweler in Delhi and bought some replacement pieces.

I guess it really is hard to teach an old mom new tricks. 😉

Follow-up………

Not too long ago, I wrote a post that generated quite the discussion on credit and credit cards in India. As a followup to that, I thought you might find this positive article interesting. It came from one of the Outreach members of the American Women’s Association in Delhi. (You’ll notice the difference in writing in India – in the U.S., the word scheme would immediately hint at a negative program – but this is a positive article.)

Launch of Credit Scheme for Slum Dwellers

Asha made history on Tuesday 28th April by launching a loan scheme for the slum dwellers of India in collaboration with The Ministry of Finance, Govt of India and 9 national banks. The Chief Guest at the function was Mr. Arun Ramanathan, Secretary (Banking), Ministry of Finance, Govt of India, the senior most civil servant in the Banking Division of the Govt of India. The Guests of Honour were Dr KC Chakrabarty, Chairman and Managing Director, Punjab National Bank, and Mr. Gautam Kanjilal, Chief General Manager of State Bank of India, the national heads of the two largest banks in the country.

Dr Kiran Martin, Founder & Director of Asha, delivers the welcome address

Also present were the Chiefs of the other 7 national banks, the New Zealand High Commissioner to India, Mr. Rupert Holborow, Deputy British High Commissioner Mr. Creon Butler, Irish Deputy Head of Mission Pat Bourne, diplomats, dignitaries and over 300 slum dwellers from all over the city.

Loans were given to slum dwellers from all over Delhi for a diverse range of purposes, including the opening and expansion of shops and businesses, purchase of vehicles and construction or improvement of homes. 58% of the borrowers were females and 42% were males. The cheques were distributed to the borrowers on stage by the Chief Guest and the Guests of Honour, in the presence of Asha’s Founder and Director Dr. Kiran Martin and other Asha trustees.

Chief Guest Mr Arun Ramanathan, Secretary (Banking Division), Ministry of Finance, Govt. of India hands out loan cheques to slum dwellers

Dr Martin, the initiator as well as the driving force behind this scheme, remarked in her speech that, when properly implemented, the scheme can greatly increase the country’s GDP through creation of national wealth, and said that “by becoming a force for liberation and transformation, we will be able to change the social and economic landscape of our country”.

This is for the very first time in the history of our country that slum dwellers have been able to directly access formal banking services, a process known as financial inclusion. They have so far always been financially excluded, and have been relying on loan sharks and other exploitative arrangements for their financial needs. This scheme enables slum dwellers to open zero balance bank accounts and receive loans at a very low rate of interest with no collateral required. The application procedures have been made very simple and the loan amount can be as low as US$100 or as high as US$5000, depending on the profile and the repayment capacity of the borrower. The repayment period is between 2 and 5 years, but there are no penalties for early repayment.

Slum dwellers and borrowers from all over the city attend the function

The pilot scheme implemented by Asha and these banks in 2008 created a very substantial enhancement in family incomes and standard of living, and a stunning repayment rate of 99%, proving to all that slum dwellers were indeed bankable. The phenomenal success of the pilot resulted in the Ministry of Finance and the national banks taking a policy decision to implement this scheme all over Delhi and then India.

The major difference between this revolutionary scheme and the traditional self help groups is that in this scheme, each slum dweller has a direct relationship with the bank, and can access the same banking services as any other Indian citizen. The interest rate on loans is much lower (9%) than that paid by members of self-help groups (18-22%), because of the high administrative costs of running the self-help groups and the involvement of intermediaries. Also, most importantly, the loans given to members of self-help groups are very small, usually not more than US$300. This is often insufficient to make a substantial difference to the living standards of a slum family.

Slum dwellers are establishing their creditworthiness in the market, are able to participate in formal economic activity, and are joining the mainstream of society. They will experience not just a cosmetic effect, but a very real improvement in their standard of living, as has already been demonstrated by the 2008 pilot scheme. They can now hold the hope of leading a life of dignity just like other citizens of our country.

Banks are making profits based on large volumes, through funds in the current accounts of slum dwellers, giving loans and receiving prompt repayments, and providing other banking services such as remittances.