Hey Al: Check out this WSJ article re: Customer gripes on IBUY. Once again you're correct.
HEARD ON THE NET: Customer Gripes Mount Against Shopping.com
1/5/99 12:41
By Jason Anders
The Wall Street Journal Interactive Edition
NEW YORK (Dow Jones)--It wasn't a very happy holiday season
for some shoppers at online retailer Shopping.com (IBUY).
In recent weeks, online message boards have been clogged with
horror stories about bad credit-card charges, endless busy signals
and products that just never showed up.
And the complaints haven't stopped there. The Better Business
Bureau in Colton, Calif., says it logged 267 complaints nationwide
about the Corona del Mar, Calif., company last year through Dec.
30, almost all of them during the holiday shopping season.
All this comes as Shopping.com is struggling to grab a piece
of the surging online retailing market while trying to put out
several corporate fires at home. The company is involved in more
than a dozen legal disputes, including lawsuits from shareholders,
and the Securities and Exchange Commission is investigating trading
in its stock. What's more, Shopping.com is unprofitable and only
recently secured financing that will allow it to continue operating
beyond this month.
Still, Shopping.com (www.shopping.com) said business boomed
during the holiday season, thanks in part to an online advertising
campaign. The company said it handled as many as 1,700 transactions
a day in the weeks leading up to Christmas. But it admits the
holidays brought an avalanche of unexpected orders, straining
its order system and causing some delays.
Some Shopping.com customers said they're still waiting for
merchandise they ordered months ago. Gerry White, a computer programmer
from Hagerstown, Md., said he ordered a video card and some speakers
for his computer on Oct. 14. Soon afterward, he said, Shopping.com
sent him a message saying the items were out of stock and would
be delayed. White said it was nearly impossible to get through
on the phone to the company's customer-service department and,
despite repeated attempts, he has been unable to cancel his order.
Now, some two-and-a-half months later, White said he still
hasn't received his merchandise, although his credit card was
charged the full $247.89 on Oct. 22. He said he wishes he had
checked out what was being said about Shopping.com on message
boards before placing his order. "I didn't know about their reputation
before I ordered," he said. "If I had, I wouldn't have touched
them."
Shopping.com Chief Executive Frank Denny said White's order
was delayed because the items were on back order from the manufacturer.
Shopping.com canceled the order as requested, he said, and White's
credit card was never charged.
However, White maintains the charge is still on his card and
he has disputed it with his credit-card company. Credit-card issuers
have 90 days to investigate claims before they decide whether
to cancel disputed charges.
Gavin Inman, a computer analyst from Battle Creek, Mich., said
he was able to get his money back for a CD-ROM order that never
arrived, but only after two months of wrangling with Shopping.com
and calling the Better Business Bureau. "I buy a lot of stuff
online, and have never had any problems at all," he said. "I've
never experienced anything like this. I definitely won't order
from them again."
Denny conceded Inman's order "fell through the cracks."
HEARD ON THE NET -2: Shopping.com Removed From Shopper.com
1/5/99 12:46
Recent customer complaints led, in part, to a "mutual decision"
to remove Shopping.com from a popular shopping Web site run by
CNET Inc. (CNET), said a spokeswoman for that company. The site,
called Shopper.com (www.shopper.com), lets users comparison shop
online retailers, displaying product prices from several sites
on a single screen. Other participants in the service include
Egghead.com Inc. (EGGS) and Cyberian Outpost Inc. (COOL).
For its part, Shopping.com said it knows some customers are
unhappy and is working to resolve those complaints. "We're working
on it very hard," said CEO Denny, noting that the company responds
to every telephone call and e-mail message from customers. "One
of the things that makes you win the endgame is to be the most
consumer-friendly site out there," he said. "We are making an
extra special effort to be that site."
Denny said he believes the vast majority of orders are being
filled on time. Most of the shipping delays that happened were
the result of Shopping.com's vendors, who couldn't meet customer
demand, he added.
Shopping.com doesn't stock any of the more than 2 million products
it sells; rather, several vendors around the country ship them
directly to customers.
Denny said he isn't aware of any cases where customers were
charged for merchandise they didn't receive, but said this might
have happened in some isolated cases. "Our policy is that we do
not charge credit cards until the goods are shipped and we have
a tracking number in our hand," he said.
The Federal Trade Commission says by law retailers must ship
merchandise within the time frame promised in their advertising,
or within 30 days, whichever comes first. Shopping.com's Web site
says orders will arrive within seven to 10 days, although Denny
said the actual time frame is usually two to seven days.
"If they are unable to ship within the promised time, the company
must notify you, give you a revised shipping date and give you
the option to cancel and get a full refund," said FTC spokesman
Howard Shapiro. Companies must return the money to customers'
credit-card accounts within one billing cycle, or about a month,
he added.
Denny said he believes Shopping.com has resolved all of the
customer complaints and shipping and order problems are now behind
it. The company has formed a task force to deal with customer
complaints to make sure they're all handled quickly and completely,
he said.
Meanwhile, he said, the brisk holiday season should significantly
boost sales for the fourth quarter. For the nine months ended
Oct. 31, Shopping.com reported a loss of $19 million, or $4.67
a diluted share. In early December, it secured a line of credit
worth up to $100 million from Swartz Private Equity LLC of Atlanta
that will allow it to continue operations. Without it, according
to SEC filings, Shopping.com would have run out of money in January.
The company still faces several corporate headaches that started
shortly after it went public in November 1997 for $9 a share.
The stock climbed quickly even though Shopping.com was losing
money and sales were thin. By March, the stock was quoted at $39
a share on the Nasdaq Over-the-Counter Bulletin Board, giving
the company a market capitalization of more than $120 million.
HEARD ON THE NET -3: Shopping.com Faces Lawsuits, SEC Probe
1/5/99 12:49
Soon after, the SEC halted trading in Shopping.com shares for
10 days, citing "recent market activity in the stock that may
have been the result of manipulative conduct."
In its most recent quarterly report, the company said the SEC
is investigating whether Shopping.com or its underwriter, Waldron
& Co. Inc. of Irvine, Calif., or their officers "engaged in activities
in connection with transactions in the company's stock in violation
of the federal securities laws." Waldron officials weren't immediately
available for comment.
Four lawsuits filed on behalf of shareholders in April and
May and seeking class-action status claim Shopping.com and Waldron
violated securities laws and manipulated the price of the stock.
The defendants have denied the allegations. In December, the National
Association of Securities Dealers suspended Waldron's registration
for failing to pay an arbitration award.
In August, Waldron, Shopping.com's biggest market maker, stopped
trading the stock, which soon plummeted to 1. It has since recovered
some of those losses, trading recently at 13.437.
In June, Shopping.com founder and then-chief executive Robert
McNulty resigned for personal reasons. In his letter of resignation,
McNulty expressed his frustration over the lawsuits and the SEC's
investigation.
At that time, according to SEC documents, Shopping.com agreed
to pay McNulty $500,000 in cash and immediately hired him as a
consultant through March 31, 2001. As a consultant, he is paid
$258,000 a year, considerably more than the $175,000 a year he
earned as CEO.
Shopping.com faces a breach of contract lawsuit from its former
chief financial officer, demands for $328,819 in legal fees from
its former attorney, and a claim from its former networking provider
for $120,000.
Shopping.com says it disputes the claims.
The company said Tower Records on Sept. 12 demanded $25,000
in damages for losses it says it suffered because Shopping.com
sold the video "Titanic" below cost, violating California's business
code.
Most recently, the company says it received a letter from Yahoo!
Inc. (YHOO) on Dec. 4 alleging breach of contract for a canceled
advertising agreement and seeking damages in excess of $2 million.
Shopping.com said it is reviewing the Tower and Yahoo cases.
Chief Executive Denny said he doesn't believe any of the legal
actions will have any significant impact on the company's profitability. |
