Questions, we get questions, we get lots and lots of questions

May 13 2008 by Ellen Roseman

Much of my day is spent handling email from readers. So I thought I’d post a few interesting questions here and let everyone take a crack at answering them. How would you respond?

The first is about a problem with ladies’ swimsuits sold at Sears and a letter to the president’s office that didn’t elicit any response.

DP wrote to Sears president Dene Rogers on March 13 as follows:

Dear Mr. Rogers,

As a long-time Sears customer, I have had an extremely disturbing experience and totally unsatisfactory response from your Customer Service department.

Prior to a recent vacation, I purchased 2 swimsuits from Sears’ website. The swimsuits fit beautifully. However, the first time that I wore each of them, imagine my horror when I got sunburned through the material! My whole abdominal area was bright red and sore after a short time in the sun.

I am 57 years old and take very good care of my skin, always using a sunscreen with a minimum 30 SPF; however, I would never think to put sunscreen on areas of my body that are not exposed to the sun, as the clothing always has protected those areas. Both swimsuits are made by well-known companies; however, both are “made in China.” I can only speculate that the fabric is substandard, similar to other quality issues that have hit the media in recent months resulting in recalls.

On returning from vacation, I contacted your Customer Service department via email to outline my problem and request a refund. I know that Sears does not accept returns of swimsuits that have been worn and fully understand the rationale for that position; however, I am not requesting to return the swimsuits because I don’t like the colour or size — the material is DEFECTIVE!! and Sears needs to return them to the manufacturer and initiate a recall so that other consumers don’t have the same, or more damaging, experience.

Attached are the responses I received to my initial and follow-up email – they definitely do NOT reflect Sears’ Vision Statement: “Sears is committed to improving the lives of our customers by providing quality services, products and solutions that earn their trust and build lifetime relationships.”

I am asking for your immediate attention to this matter, to advise me where to return the swimsuits for a full refund, and your confirmation that you will contact the manufacturer to ensure that these (and any others made from the same material) are immediately recalled, with appropriate warnings to other consumers.

Sears’ president refused to respond, but kept sending her emails back to the same people who had handled the problem before. They offered her token compensation, then retracted it.

Do you think Sears should have done more for this customer than just pay lip service to its concern for her and tell her to contact the manufacturer?

March 2 email:

Hello Ms. P,

Thank you for taking the time to contact us at Sears regarding this matter. We are sorry for the problems that you incurred with your swimsuit. Please be assured that we understand your frustration and sincerely apologize for any inconvenience you may have experienced.

By sharing your concerns, you have enabled us to address the issues and provide feedback to the appropriate department. Truly, your remarks provide forthright feedback that will enable Sears to achieve excellence in everything we do. We appreciate your business and value you as a Sears customer. We certainly hope you will continue to make Sears your choice for quality and value. We apologize for any inconvenience this may have caused you. Again, we thank you for taking the time to contact Sears with your concern.

March 4 email:

Hello Ms. P,

Thank you for taking the time to contact us at Sears regarding this matter. We are sorry for the problems that you incurred with your swimsuit. Unfortunately we do not accept returns on swimsuits that have been worn. In order to resolve the restocking fee issue, we would like to offer you a $25 Sears gift card. Please respond to this email if you would like to accept this offer. Thank you for using Sears online and we look forward to hearing from you soon.

May 5 email:

Hello Ms. P,

Thank you for taking the time to contact us at Sears regarding this matter. We sincerely apologize that we are not able to resolve this matter to your satisfaction. We have addressed this issue in accordance with the policies and guidelines set out by our Executive Board.

We do apologize but the president is unavailable to respond to your inquiry. He has placed us on his team to converse with our customers on his behalf. He does receive weekly reports on our progress.

We are sorry for the problems that you incurred with your purchase.

We are in receipt of your letter dated March 13 and once again your concerns have been noted and we appreciate you making us aware of your complaint. As you did not wish to accept the $25 Gift Card as adequate compensation, we respectfully withdrew the offer as it is our wish that you are satisfied. If there is anything further we can do to rectify the situation, please advise and I will be happy to address any remaining concerns you may have.

We are sorry for the problems that you incurred with your swimsuit. Unfortunately, we do not accept returns on swimsuits that have been worn. We have forwarded your letter of concern to the buying manager for investigation and follow-up.

We appreciate your business and value you as a Sears customer. We certainly hope you will continue to make Sears your choice for quality and value.

Again, we thank you for taking the time to contact Sears with your concern.

May 8 email:

Hello Ms. P,

Thank you for taking the time to contact us at Sears regarding this matter. We are sorry for the problems that you incurred with your swimsuit. You can contact the manufacturer at 1-800-xxx-xxxx.

Please be assured that we understand your frustration and sincerely apologize for any inconvenience you may have experienced.

Again, we thank you for taking the time to contact Sears with your concern.

The second letter was from someone facing a financial dilemma. Should she take on more debt to buy back her pension and retire early?

I am 56 years old, working 26 years at the same company but only on staff for the last 11. There are 15 years of pension buy back available to me at a cost of close to $350,000. In order to buy it back, I would move my $210,000 RRSP over and borrow the rest.

I currently have a $55,000 mortgage, $152,000 credit line and $5,000 in credit card debt. I have an ING savings cushion of about $5,000.

If I buy back my pension, I will be eligible for retirement (unreduced) in June 2009. The problem is that I will be carrying a debt of $300,000 when I go. I will get a severance package of six months’ salary which can go to reduce the debt, but will I be getting myself too far into debt to do this?

Or should I buy back partial pension ($200,000) which will give me a reduced pension in three years?

I am so confused, I don’t know what to do. Can you help me? Or advise me where to go for information?

I’m a journalist who writes about financial planning, but I have no licence to to offer financial advice. So I gave this reader some opinions and options.

I think you should seek help from someone who could do some computer projections for you, showing how long it would take to pay off your debt and how long your money would last under different scenarios. A lot depends on interest rates, inflation, how much of your pension is indexed to inflation and the investment returns your savings would earn.

Ask your bank to help, since it probably has financial planners (with a CFP designation) on staff and will make their services available to clients for free. That’s a good place to start. You can also ask a certified financial planner to do a report for you for an hourly or flat fee. I’m sure this would help clear your confusion.

I don’t think it’s a good idea to go into retirement with a big debt load. You’re fairly young and could be financing your retirement for another 30 years. Carrying debt into retirement puts you at risk. Any sharp upward move in interest rates would increase your monthly costs and put an additional strain on your retirement budget.

What’s the rush? Do you have any retirement plans yet? Can you make money after you retire? You may need to in order to pay off the debt. If you’re incredibly stressed at work, that’s one thing. But if you’re OK with working a few more years, I’d suggest staying and building up your pension entitlement without taking on a whole extra whack of debt.

The reader replied: “Thank you so much for getting back to me. I will see a financial planner!”

It’s tough when employers throw you hard questions — buy back your pension for such a price? — without offering any help with the decision-making process.

7 comments

  1. Rob in Madrid

    May 14 2008

    In this reader’s situation, it is absolutely essential that she sees a For-Fee Financial Planner. To the average person, it may seem like a waste of money to pay for something you can get free. But when you go to a “free” financial planner, the service isn’t free. It’s paid for by the commissions that you pay when you buy his product.

    Same with going to a bank. Most of them aren’t qualified. Just ask anyone who bought Asset Backed Notes being told they were 100% safe.

    Again in her case, she needs to pay someone who has no bias!

  2. bylo

    May 15 2008

    > It’s tough when employers throw you hard questions — buy
    > back your pension for such a price? — without offering any
    > help with the decision-making process.

    Employers have the same concerns that you do, Ellen, and for the same reason: They aren’t licensed financial planners either. So if they offer anything more specific than the excellent advice you gave they’d be vulnerable to legal action if their advice doesn’t work out.

    An employer actually has a conflict-of-interest in that they’d prefer that the employee choose whichever option that would cost the employer the least amount of money. Furthermore, an employee may not want to share their personal financial circumstances with their employer for any number of other reasons. So the only alternative is for the employee to seek competent, independent advice.

  3. DP

    May 22 2008

    Your efforts worked with Sears – thank you so much for your help!!

    I spoke to a Sears executive, who was most apologetic about the way my situation was handled. She assured me that measures have been taken to provide feedback and coaching to their staff on how better to handle this type of customer issue.

    She said she’d been in touch with merchandise managers and the account reps at both swimsuit companies. They have asked to get the swimsuits back in order to have the fabric analyzed.

    She offered me a choice of replacing the swimsuits or getting a refund. Given that swimsuits are such a personal choice (and they have to fit right!), she agreed with me that a refund was more appropriate under the circumstances.

    She also offered to send the $25 gift card, which I didn’t accept when offered in the initial series of emails.

    Thanks again for your help – hopefully other women won’t have a similar problem with these swimsuits.

  4. Rob in Madrid

    May 24 2008

    This may be of interest to your readers:

    How To Launch An Executive Email Carpet Bomb

    over at the consumerist.com.

  5. Michael

    May 14 2009

    Do all FI’s charge Deregistration Fees for RRSP withdrawals? I recently made a withdrawal and was charged $50.00. In this recession seems like the Banks will make a killing with this fee

  1. Canadian Personal Finance Blog » Blog Archive » Long Weekend Random Thoughts