Dazhong Electronics, a major chain store for appliances, says it has strengthened its management policies after it and two suppliers were fined for offering false reclaim certificates under the trade-in subsidy program.

Customer service representatives at Dazhong were previously found to have violated regulations by giving government-funded discounts to people who were not entitled to them because they were not real Beijing residents and did not have old electrical appliances to trade in.

The store and appliance makers apparently broke the rules in order to boost sales.

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The Beijing Municipal Commission of Commerce issued a fine of 100,000 yuan each last Friday to Dazhong, Beijing TCL Electrical and Beijing Midea Refrigeration for their mismanagement of the program.

TCL and Midea were fined because their salespersons violated the rules at Dazhong.

The three companies were also warned that if they were involved in similar violations in future, they would no longer be allowed to participate in the trade-in subsidy program.

Under the scheme, the Chinese government offers subsidies for residents who trade in old appliances for new ones.

The measure was begun to stimulate domestic consumption. The subsidies are equal to about 10 percent of the face value of the appliances.

Appliances covered by the program include TVs, computers, washing machines, air conditioners and refrigerators.

The policy is expected to expire on May 31.

According to the rules of the trade-in scheme, only businesses or organizations registered in Beijing and residents with a Beijing hukou can benefit from the discount.

Beijing Daily says the municipal government has committed 270 million yuan to the subsidy program.

Statistics show that 957,000 old appliances had been turned in under the policy as of April 22. The program was launched in August 2009.

Under the scheme, a total of 888,000 new appliances were purchased, realizing sales revenue of 3.6 billion yuan.

People do not have to make new purchases immediately after turning in their old ones.

METRO talked with five customer service representatives from Panasonic, Sanyo and Hisense, about air conditioners and washing machines at Dazhong's Xibahe store, Gome's Xibahe store, and Suning's Anzhen store in Beijing on Monday.

All of them insisted customers must provide valid proof of identity in order to enjoy the trade-in discount.

But for people without a Beijing hukou, all of the salespeople suggested customers use relatives and friends who do have a hukou and who are therefore entitled to participate.

"As long as you can provide a copy of an identity card with a Beijing hukou, and have him or her come in person to apply for the subsidy, you can still enjoy the discount," said one of the saleswomen.