Refash founder responds to online backlash from sellers who've yet to receive payment for used clothes

When Refash launched in 2016, women in Singapore lauded the local fashion start-up — it was a sustainable way of selling off the pile of unneeded clothes in their wardrobes and purchasing pre-owned ones at a bargain. 

The company has found some success since then, now with nine Refash outlets islandwide. But while shoppers are more than happy to find chic second-hand outfits at rock-bottom prices, the same sentiments can’t be said for the ones who’ve sent in their old clothes in return for cash. 

There has been widespread hostility towards Refash recently and the primary gripe is this: they’ve yet to receive any of the promised payment from the company months (or even a year) since handing in their unused clothes. 

Three months ago, a Redditor questioned if the platform is a scam after failing to receive her $30 payout despite months of chasing for it. On Google, 39 of the 43 reviews by users are negative ratings over the same issue of not seeing their money wired in.

On Instagram, an account with the handle @refash.reveal publishes dozens of feedback from Refash sellers who similarly have not gotten their payments — some have even claimed that the money they are owed amount up to the hundreds of dollars. Police reports have been made as well against the company.

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'No intention to default on payments'

“I feel their pain, I really do,” stated Refash founder and CEO, Aloysius Sng, to AsiaOne when queried about the online reprisal. 

The 32-year-old clarified that the company holds no intention at all to default on the money owed to its sellers on the platform — it'll just take some time to process and clear the payments, he said.

According to Sng, the reason for the severe delays for compensation is due to a combination of a business model revamp and the setbacks of the Covid-19 outbreak. 

Initially, how the platform works is by having users create an account on the Refash website and send in their unwanted clothes for sale. If their item has been bought, the seller will receive a percentage of the proceeds of the sale. 

This pay-as-you-sell model, as they found out, was not sustainable. In early 2019, Refash started pivoting to a model where sellers would simply get a quotation for their clothes and receive a fixed amount of money for the bundle, regardless if the clothes get bought in stores or not. 

Just as the company started to yield better margins and churn enough profits to pay sellers on time, the pandemic hit and the circuit breaker put retail operations on hold. This exacerbated the delays for compensation, though Sng affirmed that the company is indeed making progress with fulfilling payments on a daily basis. Though the company is unable to keep up with paying all of its sellers on time, about 20 to 30 cases are being settled each day, he stated. 

The CEO also told AsiaOne that he has also settled up with the police, which found no reason to probe him after he showed proof that the sellers are indeed being paid, albeit at a slower rate. According to Sng, about 30 reports were lodged against Refash in regards to the delayed compensation. 

Nonetheless, Sng affirmed that he is confident that the company is able to clear payments to all who are owed money by the end of the year, as long as there aren’t any more disruptions to business.

When asked why Refash continues to hold sales and accept second-hand clothes despite facing difficulties in compensation, he said that keeping its stores stocked and running is the only way to continue earning revenue to pay people. 

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“We are here and we still want to repay our sellers,” Sng mentioned.

As for why Refash hasn’t really engaged or combat criticism against the brand, he stated that it would “be no use at all” as the only way to appease them would be to fulfil their promise for a payout. 

“I’d like to extend our sincere apologies to sellers and ask for a little more time and patience,” Sng said. 

ilyas@asiaone.com