Toysrus.com Suit So Far Is Just A Party of One

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Toysrus.com at press time said it had yet to see the papers from a class-action lawsuit filed in Seattle's Superior Court of Washington for King County charging the beleaguered retailer with intentionally and deceptively accepting orders for Christmas, knowing it couldn't deliver on time.


"Toys 'R' Us has not been served with the actual complaint in this matter," company spokesman Stephen Jones said, "but based on the allegations in the press release issued by the law firm, Toysrus.com sees no merit to the claims."


Sole plaintiff Kimberly S. Alguard of Lynnwood, WA, is angry that the online retailer failed to deliver toys ordered Dec. 7 by Dec. 22. The toys were bought for her 4-year-old son.


Meanwhile, Alguard's law firm of Hagens Berman, claims others have approached it to join the suit, but would not disclose how many, or how much the suit is for.


Alguard said in her suit that she asked for a three- to six-day delivery, but got suspicious when the order didn't arrive in the time-frame requested.


When the exasperated parent finally contacted Toysrus.com, Alguard claims company representatives told her the order would reach her by Dec. 22. "But it wasn't until 9:30 p.m. on Dec. 22 I found out that my order was not going to arrive by Christmas," she said in the news statement.


Alguard said she spent the next 48 hours searching frantically to replace the gifts she expected delivered by Toyrus.com.


Hagens Berman, which specializes in class-action cases, stepped in and agreed to sue on behalf of Alguard and other Toysrus.com customers who bought toys on the site by Dec. 14 - the cut-off set by the company for guaranteed delivery - but did not get delivery by Dec. 25.


Meanwhile, some think Toysrus.com is taking a bad rap for being courteous enough to apologize for its delivery mistakes with a $100 gift certificate redeemable at Toys 'R' Us stores.


eToys.com and Macys.com were among several online retailers that also faltered in delivery this Christmas, and they weren't as contrite as Toysrus.com in trying to appease disappointed customers, said Seema Williams, senior analyst at Cambridge, MA-based Forrester Research.


This lawsuit has enormous implications for e-commerce and online retailers, she pointed out.


"Online retailers are going to necessarily limit the number of orders that they take to make sure that they can commit to actually deliver in getting those products out the door," Williams said. "Because it used to be that if you got 90-something percent of your boxes out - fine, close enough. But a hundred percent is now required."


In November, Toys 'R' Us parent dropped 62 million catalogs nationwide inviting consumers to visit Toysrus.com for a $10 discount on a $25 purchase. So many people responded that the site crashed several times in the ensuing days.


Those who managed to reach the home page saw this apology: "Due to the overwhelming popularity of the Toys 'R' Us Big Book of savings, we have had to limit the number of guests to our Web site. Please accept our sincere apologies and try again later."


Meanwhile, John Barbour, CEO of Toyrus.com, said the week of Nov. 8 that "in order to meet customer demand for the holidays, Toysrus.com will be tripling the number of servers ... to prepare for the rush, on top of the quadrupling of servers we implemented last month, as well as continued investment in the technical infrastructure."


The class-action suit by Hagens Berman said these were early signs of Toysrus.com's inability to meet Christmas delivery commitments. The retailer promoted itself heavily during the holidays, and had 1.75 million visitors weekly Nov. 22 through Dec. 12, the suit alleges.


"There are a lot of things in life that are excusable, but ruining Christmas for thousands of children isn't one of them," Steve W. Berman, partner at Hagens Berman, said in the statement. "The thought that Toysrus.com had full knowledge they couldn't keep the Christmas Eve date but continued to accept orders makes it even worse. To thousands of kids, Toysrus.com is the e-grinch who stole Christmas."
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