On December 17th, we found out that EzyDVD went into receivership. Stuart has already written about EzyDVD Pty Ltd being placed in receivership, so I won’t rehash the discussion here… what I will share however, is the email I received this afternoon about the fallout that is just starting to occur.
It appears that EzyDVD franchises are not accepting EzyDVD Gift Cards. However, the stores are accepting full payment for new releases… Needless to say that this is upsetting a number of consumers…
Hi Everyone
Just thought I’d send out a warning about Ezy DVD shops in Australia.
See ABC news: http://www.abc.net.au/news/stories/2008/12/17/2448871.htm
Today they went into receivership but are still trading from their
shops.Neil’s Mum had bought us Ezy DVD vouchers for Christmas and he went
into Tuggeranong Ezy DVD to try to spend the vouchers and was advised
that they couldn’t accept them on the instructions of Head Office.At the time, a man next to him was paying for a “future release”.
Pre-paying for a movie that is coming out shortly. They were about to
take his money when he heard the discussion Neil was having with the
sales clerk (Neil is not quiet – particularly when angry). The man
took his money back, ripped up his order sheet and said “you f*&ers
weren’t even going to tell me, were you?”!Needless to say, DON’T pre-order from them or buy vouchers (I don’t
know if they are actually selling vouchers, but they were certainly
accepting furture release payments)!!Neil’s Mum is a pensioner and certainly couldn’t afford to lose $120
on Christmas gifts!Please pass this on to everyone you know!
Best regards and happy holidays (hopefully).
Melanie Buckley
Canberra, Australia
The franchisor is in receivership and they own the money that is taken at the Franchise level for Gift Vouchers, so the Franchisees are left ‘holding the can’ with this one – I feel for them. I know how many Gift Cards we sold in the lead up to Christmas in each of our stores…
I can’t comment about asking for full payment for orders… It was certainly one of our policies with customer orders – to ask for full payment up front. Additionally, we wouldn’t accept a customer order without a deposit.
However, would we – in the current climate that exists for the Franchise – be taking full payment? It’s not a position I would want to be in. Let’s look at the situation, as I understand it from my own experience:
- Here we are, at the end of the Christmas boom, where we make the majority of income for the year
- In little over a week, maybe a little longer, we are faced with the inevitable downturn in sales. Store revenues crash to the lowest they ever are in the year.
- Supplier accounts are 30 days, the stock purchased to cover the December sales isn’t paid for till January. December accounts are generally quite large…
- Revenue for the Gift Cards has been lost… The sales that would normally come from people redeeming Gift Cards just aren’t going to happen…
- And… you still have to have stock on the shelves and fulfill customer orders…
It’s a bleak picture, made bleaker by the current ecomonic climate. I’m certainly glad that we made the decision to exit when we did – regardless of our current financial situation… it would be a whole lot worse now…
What do you think? What should the Franchisee’s be doing?
Andrew Phillips says
December 22, 2008 at 7:31 pmI purchased a DVD player from them and was emailed on the 10/12/08 to let me know it was sent via Australia Post from Adelaide. Todays the 22nd and still no DVD player, I rang EzyDVD to be told, by a very defensive worker, that if an orders was placed before the 16th of December and “goes missing” it bad luck as EzyDVD will not be honoring these orders. They couldn’t even prove to me that it had even been posted. I feel that they just took my order (and money) and kept the goods as well. Makes sense when you think that the busiest time of the year would be up to mid December for internet orders. I hope I’m wrong, it still might turn up, but I doubt I will ever see my DVD player or money again.
Cate Jackson says
December 22, 2008 at 9:15 pmAs someone who has worked for EzyDVD for over 2 years in the past, and as one of the staff left ‘holding the can’ when things went wrong, let me say this:
Christmas is the worst time for retail workers. You know this, we’re busy, we’re underpaid, we’re overworked and we have to dela with complete idiots all the time. Repeatedly I have had to have a smile on my face while being verbally abused by various customers.
Why do we put up with it, you ask? So that you, the consumer can have the Christmas you want. We work so hard, and for so long so that you can have a nioce Christmas, with good presents.
So many times in the last few days I’ve had people complain that it was too busy at the shops for them. You know what, you can leave when you’ve finsihed, we can’t. We’re ther day after day, dealing with the same things over and over. The customers that get angry when we don’t have something, the people that refuse to allow us to serve one customer at a time, those that think that yelling and abusing is going to help them get their way.
So, next time you’re at a shop, any shop in the leadup to Christmas, please, take the three seconds to thank the employee that had been serving you. Saying ‘Have a Merry Christmas’ and meaning it, really isn’t that hard.
Charly Leetham says
December 22, 2008 at 9:56 pmCate – you are entirely correct.
I urge everyone to read what Cate has written and take it to heart. The staff in each of these stores work hard, particularly at Christmas but generally throughout the year. With the news today, please don’t take this out on the staff — if you really are annoyed or upset by the lack, get the postal address for the store owner and voice your annoyance to them….
Please think of the staff, particularly at this time of the year, and take 10 seconds to be nice to them and wish them a Merry Christmas.
Thank you Cate for reminding us of this fact.
Charly.
R.S. says
December 23, 2008 at 7:19 amStaff have also been harshly informed they will be held *personally liable* for all gift cards they accidentally issue/redeem. So we can’t be forced by irate customers.
And it’s across the board. The gift card service contract with the third-party operator was held by head office only, so even the franchisees can’t do anything about gift cards they issued themselves.
All stores have a phone number to give to customers for complaints about gift-cards. Please call them and demand your money back. That cash is not an asset for the recievers to keep, it’s a debt they have to pay back to customers.
Mick says
December 23, 2008 at 7:53 amI am in this situation also. The number they give you is for the Administrators in Adelaide. They request a letter with evidence of the gift card (copy) and you will be placed on the list as an “Unsecured Creditor” to be paid when/if there’s any money left over.
R.S. says
December 23, 2008 at 8:16 pmInteresting. We’ve had customers say that when they phoned, the people on the other end told them their money was forfeit, and that they wouldn’t be getting it back.
I’ve heard its not the receivers that are ‘stealing’ the money, but that it’s the card company that handled the transactions for Ezy that are withholding the money.
At this stage, though, who can say what is rumor and what is truth? One thing is for sure: Hold on to those gift cards and don’t throw them away. Call that number and demand your money back. EzyDVD stores can’t help you, unfortunately.
I dread Boxing Day.
GamesPortal says
December 31, 2008 at 5:26 pmFor those gift cards, if anyone paid by credit card just issue a ‘chargeback’ through your credit card issuer.
You can issue a charge back for goods not received, it’s easy to do and the onus will be on EzyDVD to prove otherwise. I don’t think you’ll have any problems getting your money back this way.
Charly Leetham says
December 31, 2008 at 5:39 pmHi GamesPortal – good tip, I would be interested to see how that goes, if anyone wants to update us!
I have read on other blogs and news services that there is a belief that the Franchisees can choose to honour the vouchers / cards. Whilst technically this is correct – it would be entirely at the Franchisee’s expense – they will not receive the value of the transaction from the Receiver. It really is the way the system works….
Charly.
Steve says
January 7, 2009 at 8:22 amHi Charly, you may not remember me but I started the Macquarie store a few months before your ACT stores. Yes I’m still part of EzyDVD. Macquarie closed at the end of its lease but Penrith is still running.
I just wanted to say that the Gift Cards are a total debacle. We received info from the receivers on 20 December that gift cards will not be honoured. We started issuing in store credit in lieu of Gift Cards from that time but there were a lot of Gift Cards issued which we did not know would not be honoured. The problem now is that customers aren’t taking this news well (as you’d expect). I have to call security at least three times per day to “escort” abusive and threatening customers from the store. I can sympathise with their position because EzyDVD owes me about half a mill so I’m not real happy with the situation either but customers need to realise that the franchisees don’t have their gift card money. We are merely an “agent” if you like for the Gift Card company and EzyDVD. Its not easy for any of us but threatening staff when they have no control is unfair.
My opinion is that Gift Cards issued from company stores will unfortunately become unsecured creditors, but why does this affect franchise stores? The customer has given the money to the franchise store who has then transferred it to the Gift Card. The franchisee is not in receivership. The card should still be honoured. The Gift Card comapny has stopped all transactions on all Gift Cards.We have received info from the receivers on 31 Dec that they are looking into the legality of this and I’d urge all customers to contact Ferrier Hodgson on 08 8100 7600 and ask for Caitlyn Davies or Alicia Kroschel. They are specifically tasked to deal with franchise issued cards.
Cheers
Steve
Charly Leetham says
January 7, 2009 at 11:53 amHey Steve,
Sure, I remember you. Thank you for the frank information about the Gift Cards. It’s a shame that the Franchisee’s are affected by this and it will be interesting to see the outcome.
It’s sad to hear that customers are so frustrated that they feel it necessary to get abusive or otherwise… It isn’t the Franchisee’s fault… please bear that in mind…
Charly.
jordy says
January 9, 2009 at 7:26 ampeople dont know alot about this but i am 16 and my mum kicked (expletive used) up about this for people saying just do a change back u cant ok there banks would of been closed plus terms of conditions on the back of the card read it they can change it at any time they want to people are only (expletive used) if u if u bought the card by a company owned ezydvd please find out where u got them and go on there website and see what is company and franchised owned if u are lucky and it was bought froma franchise they have to accept it no matter what but if company u really cant do anything about it what they are doing is legal and yes i have a gift card of $50 but i found ways around it i used my head beffor i said and today ferrier hodgson will be getting a nasty fone call from me for being verry rude to my mother and to also get there facts straight beffor they put all thies people into this (expletive used) also i know it’s wrong but they are still allowed to trade it is legal they are doing nothing wrong in the point of it is legal but morrely it is wrong but we have to face this stuff in life even more now because are econemy is falling appart and there will be alot more places that go under this is just a small one next it could be one of the biggest food sellers in australia witch is woolworths and there is nothing we can do.
P.S. Sorry about my grammer and the bad spelling
I just hope use all read what i say and comment back to me because yes there is more way arround this just do what i said and go to there website please not all of use would of been cought out by this.
Ill tell u this though if u do send in a form ull be lucky to get a cent back because the people they have to pay back first is the suppliers or rental agents they owe big money first then us way down the list people we are nothing to them and they do not care about are money also if u read up a bit more ull see they are trying to sell ezydvd i dont think it will sell becuase of the econemy crash and they just dont make the sales they need plus i have been told they want quit alot of money for it to so yea.
well just had to have my say
and yet again sorry about the spelling and the grammer beffor people say anything about it … lol
Charly Leetham says
January 9, 2009 at 7:47 amJordy, thank you for taking time to put your thoughts in. I debated whether I should delete your comment or not and decided that I would edit the swear words you used.
Please… you are most welcome to add your thoughts, but please have a care for my readers. We do not appreciate foul language and in future, I will delete any comments that uses it.
In regards to the Franchises being required to accept Gift Cards or not – you are mistaken at this point – they have received official direction from the Receiver and they must comply (if the Receiver direction is not appropriate will be confirmed in the ‘fullness of time’).
Many franchisees are very upset about the whole issue however, if they accept Gift Cards at this point the funds will come straight out their own pockets – they do not receive the proceeds of the Gift Cards at all… If you read this post What Do You Do When Business Goes Wrong, this blog Riches To Rags – EzyDVD Franchisee Having His Say and the comment by Steve on this post… you’ll see that the franchisees are already hurting and many who have put everything they have into their franchise business must be very concerned about their future now.
I think it very unfair that you tell people that a Franchise store has to accept a gift card – I hope one day, you aren’t in the situation of the Franchisee’s… It is not a pleasant place to be and no one should have to go through it.
Kym says
January 9, 2009 at 8:43 amI have just had a chat with the local store that I purchased a gift voucher from in October for a family member who waited for a particular movie to be released at xmas only to find that the gift voucher would not be honoured.
I feel sorry for the franchisees who are in the middle of the whole situation. They would like to do the right thing but are unable to as the EFTPOS machines that the vouchers have to be swiped through are locked for these cards, Receiver’s instructions (and as most of their own assets are tied to the business there is no way for them to be ‘personally responsible’ for money that is ultimately the company’s responsibility to supply). They stand to lose a lot more than the value of a gift voucher.
So spare a thought for them – the real blame in the end is the owner of the company and he should be the one made to pay!
Kym says
January 9, 2009 at 8:55 amWhile all this is going on and the website is showing nearly a dozen stores availoable for ranchise and one in SA lookiing for staff.
You would think that the website would either be updated or shutdown as it does not reflect the current situations and there seem to be a lot of complaints of items being purchased online and then not deliveres!
sean says
January 9, 2009 at 10:43 pmIts sad for anyone who purchased a gift card but spare a thought for the franchisees who have invested in this group. Their future is now in limbo. I very much doubt this group will be salvaged. All the corporate stores will close and franchise stores will have to rebrand. The owner of this group is a comnplete twat!!
Steve says
January 13, 2009 at 7:20 pmThe inside news is that many offers have been received for the sale of EzyDVD but the tip is that Video Ezy has the best overall offer. The receivers are expected to make an announcement tomorrow.
I think Jordy represents the opinion of most narrow minded customers I have had to deal with. I can’t get through to them that the franchisee does not hold the money in the Gift Card. We are an exchange agent for the Gift Card company and Ezydvd.
If I hear the “I’m going to Fair Trading” speil again I’ll flip. I’ve already been to Fair Trading and they have confirmed that referring the customer to the receivers is the correct procedure. Customers think that by mentioning “Fair Trading” that retailers will start shaking in their boots. Truth is we shake our heads because we know its a hollow and baseless threat. Fair Trading also protects the retailer from customers just like Jordy.
John says
March 23, 2009 at 3:21 pmWould it be foolish for me to order an out-of-stock DVD from the EzyDVD website? Do you think EzyDVD are still being supplied by overseas distributors? Other option is to purchase the title from Amazon.com. I’m happy to do that if Ezy is truly out-of-business, but I’d rather help the local guys trade out of insolvency than pipe the money overseas.
Charly Leetham says
March 23, 2009 at 7:56 pmHi John, I really can’t comment about the Franchises deliveries or their fulfillment of customer orders. I do know that the two remaining stores here in Canberra shut recently…
What I do know is that most of EzyDVD’s stock, if not all, came from Australian suppliers – they didn’t use overseas’ distributors to my knowledge. There are some reasonably strict guidelines (or at least there were 18 months ago) about importing DVDs to sell commercially….
I haven’t purchased anything from EzyDVD in the last 18 months. I have however, found a new supplier here in Australia that is easy to deal with. You may find the title you’re looking for there. DVD Orchard