News that a number of Web sites billed consumers for Sony's PlayStation 2 and then never delivered the product could hurt smaller e-tailers by driving wary consumers to major toy sites.
“It raises concerns for new consumers to e-commerce, and will probably increase traffic to reliable click-and-mortar sites,” said Keven Wilder, owner of Wilder and Associates, Chicago, a retail and e-tail consulting firm.
PS2 is one of the hottest games of the season, with its demand fueled by a shortage of chips that caused Sony to ship only about 700,000 units instead of the intended 900,000.
Police and other officials are investigating sites in the United States and Canada that may have advertised they had PS2 units available when they did not. The Better Business Bureaus in the United States and Canada issued an international alert to caution consumers about Web sites that falsely advertise the availability of the units.
The Canadian Council of Better Business Bureaus received complaints from consumers who ordered PS2 units from two Web sites in New Brunswick, Canada — www.ps2storeusa.com and www.ps2storecanada.net — and did not receive them. The sites advertised “a large supply” of PS2 units.
“We continue to receive 20 complaint calls a day,” said Bob Whitelaw, president of CCBBB, Ottawa. However, the agency has been unable to locate the two sites' business owners.
“What's particularly alarming,” Whitelaw said, “is the fact that purchasers were asked to fax a photocopy of the front and back of their credit cards to assure speedy delivery of their gifts. No legitimate business will request photocopies of your personal financial information.”
Sony Computer Entertainment Canada has asked the Royal Canadian Mounted Police to investigate and has requested a cease and desist order against the two sites. Any commercial site that claims to have thousands of Sony PS2 units for sale is making a bogus claim, according to Sony.
In another possible fraud case, the Fountain Valley, CA, Police Department is urging consumers to stop payments for PS2 units to Gametek/PS2Cart.com, because the site took several orders but did not have products to ship.
Gametek's site was taken offline by the company's owners, so consumers have been unable to cancel payments with the site. The U.S. Postal Inspector's Office also is investigating, and Gametek's bank accounts have been frozen.
However, the Fountain Valley police department has not issued a warrant of arrest for the owner and has not decided that the site intentionally defrauded consumers.
“The owner of Gametek has been contacted and interviewed. The investigation is continuing,” the department said.
When the investigation reaches a conclusion, PS2 buyers will receive a “complete or partial” refund. Those who paid using PayPal's online payment service will receive refunds soon, but people who paid via check or money will have to wait.
Despite the PS2 problems, one e-commerce analyst does not think that will discourage customers from online shopping. Rather, they will be more wary about which sites they order from in the future. “There's always been that risk online,” said Jill Frankle, director of retail e-commerce at Gomez Advisors, Lincoln, MA. “There are a lot of ways people can tell if it is a reliable site, such as whether it is approved by a company like Gomez or the Better Business Bureau.”
The BBB advises Net shoppers to do business with merchants they know, or those that are affiliated with a reputable online consumer protection program such as BBBOnLine.
“If you're not familiar with an online store, do some research before you buy,” the BBB advises. “Responsible merchants will clearly post their physical address and telephone number on their Web site. Use that information to check the business's complaint record with the Better Business Bureau or local consumer protection agency,” said Ken Hunter, president of the U.S. Council of Better Business Bureaus.
The BBB is advising shoppers to be on the lookout for scams surrounding any hard-to-find toys. People buying Beanie Babies, Cabbage Patch dolls and other items have experienced similar fraud. “Some parents abandon common sense when they're on the search for hard-to-find popular toys, and scam artists know this,” Hunter said.
Some clicks-and-mortar sites had problems with the heavy PS2 demand, but nothing that was linked to fraud. BestBuy.com had a surge in volume the day after Thanksgiving, due to rumors it would have PS2 units on the site.
“We've never sold PlayStations on the site, so I'm not sure where those rumors came from,” said Donna Beadle, spokeswoman for BestBuy.com. “That caused a slowdown in response times and with functions such as our search engine, but we weren't down.”
BlueLight.com suffered from “sluggishness” on certain days after it started running “Virtual BlueLight” specials on PS2 units on Nov. 27. Consumers camped out on the site, waiting for the specials to be announced, and many sent shopping bots to the site to find the specials.
“We got 80,000 hits at once on the site, but we were able to disable the bots,” said Dave Karraker, spokesman for BlueLight.
BlueLight is now out of PS2 units, and did not raise any consumer concerns over fraud or false advertising because “we made it very clear when they would be available,” Karraker said. “The only complaint is, 'I've been waiting on the site for it.' “