When Matthew Legault graduated from high school in June, his parents figured they’d recognize his hard work by buying the parts he needed to build his own personal computer.
They placed an order with Amazon and it arrived at their Calgary home quickly.
But when Matthew opened the graphics card — a $690 part — he discovered the plastic casing had been hollowed out and filled with a putty-like substance to give it weight.
“It was actually a bit of a shock,” he said. “Everything looked pretty official up to the point where I pulled it out and took a second look.”
The real shock came, though, when Matthew’s father tried to get a refund.
François Legault followed Amazon’s return instructions and sent the item back, expecting a refund.
Instead, Amazon said in an email there would be no refund until the “correct” item was shipped back.
On top of that, the Amazon rep said the returned, fake item had been thrown out, to protect other employees.
“It was absurd,” said François. “It’s just a piece of plastic so I doubt there’s any danger to their employees. And secondly … now they’ve destroyed the piece of evidence.”
Amazon repeatedly claimed it had shipped the correct item.
Legault repeatedly explained he had received and returned “a complete fake” and attached photos to prove it.
Telling customers the item they’ve returned has been disposed of is a great way for Amazon to “end the conversation,” said marketing specialist Marc Gordon, who coaches both small companies and big-name multinationals on interacting with customers.
The fake graphic card, filled with a putty-like substance to provide weight, that Matthew says arrived from Amazon. (Submitted by François Legault)
But “that’s impacting the quality of service they provide.”
Service, Gordon says, may be affected as customers who flocked to the online retailer during the pandemic return to brick-and-mortar stores, forcing Amazon to re-organize.
“They don’t have the time or the resources to deal with every customer complaint, every inquiry, every problem,” said Gordon. “They want this done and they want to move on to something else.”
In an email, Amazon’s Canada spokesperson Ryma Boussoufa said: “Not every returned product can or may legally be resold or donated for hygienic or product safety reasons. In those cases, we will recycle products where possible.”
‘Slap in the face’
François says his history with Amazon should have stood for something — he’s been a loyal customer for years, and rarely returned anything.
“The box had obviously been tampered with,” he said. “We kind of expected that Amazon would have better quality controls, better procedures to ensure that something like this doesn’t happen.”
Amazon’s global profit growth slowed between 2020 and 2021. Industry experts estimate this trend will continue. (Chris Young/The Canadian Press)
“They’re basically saying that we’re trying to defraud them,” said François. “We’ve never had a pattern of returning things, or anything of that nature.”
An Amazon rep had, at one point, said the decision was final.
“That’s a little bit of a slap in the face,” said François. “They’re basically shutting this down and saying that there’s nothing else to discuss. And unfortunately, I beg to differ.”
After Go Public made inquiries, the company refunded François and apologized for taking almost five months to resolve the “unfortunate incident.”
Amazon reported global profits in 2020 of over $386 billion US, a 38 per cent increase over the previous year. It doubled its workforce between 2020 and 2021 and rapidly expanded.
But last year, growth was slower — a 22 per cent increase over 2020 — and growth for the current year is expected to be slower again, according to industry experts.
Matthew games on the personal computer he built with parts ordered from Amazon. The Legaults eventually bought its graphics card from a local store. (Colin Hall/CBC)
Last month, Amazon confirmed it would be laying off some 10,000 employees worldwide.
The returns customers make every day are a major expense for Amazon, Gordon says.
Online retailers in general lose an average of 21 per cent of a returned item’s original value — once costs for shipping, processing and restocking are factored in — according to a U.S.-based study by Pitney Bowes earlier this year.
Go Public asked what percentage of orders were returned last year, but Boussoufa wrote that the company doesn’t release that data “for reasons of commercial sensitivity.”
More returned products ‘disposed’
Go Public heard from more than half a dozen others who said they, too, were frustrated by Amazon’s policy of disposing returned items before a dispute was resolved.
Allan Papernick of St. Davids, Ont., ordered a $280 Citizen watch last April. But it was difficult to read the black hands on its black face, so he sent it back.
Amazon repeatedly told Papernick he had sent back an “older model” watch, which it had then discarded. It asked him to return the correct item.
“If I was scamming them, then let them send that item back to me,” he said. “Getting rid of it is a weird business practice, to say the least.”
He threatened to sue for $10,000 and received a full refund the next day.
Amazon did not answer when Go Public asked whether all outgoing packages are individually inspected to confirm the contents. But every returned item is carefully inspected “to accurately determine its condition,” according to Boussoufa, the spokesperson.
Other customers, like Justin Tabbert of Ottawa, say they will never again order from Amazon after similar, frustrating experiences.
Advice from a customer experience expert
Marc Gordon shares a tip to give consumers the upper hand when opening an Amazon package.
He spent about $700 ordering RAM for his computer last April, but says his package had been opened and was missing half the order.
When he sent it back, Amazon complained it was “missing components.” It ended up resending the full order, but the issue’s still not resolved.
“Now they are saying they will charge me for another [order], because in their view, they’ve sent two,” said Tabbert.
Make an unboxing video
Gordon says Amazon’s tactic of insisting a customer return an item they say they don’t have is designed to put the onus back on the customer to fix the issue.
“The problem is, it doesn’t work,” said Gordon. “You just end up with a really irate customer who feels that they’ve been taken advantage of, or misled or screwed over.”
He says anyone worried about not being able to get a refund if an online order has problems, should make an unboxing video. Have someone grab their phone and film when a package is opened.
“If it’s exactly what they ordered, great, they can delete the video,” said Gordon. “If it is, in fact, something that’s been substituted or fake or fraudulent, well, it’s right there in the video. There’s no denying it.”
As for Matthew Legault, the high school grad is happy his computer is up and running — he uses it to play games with friends and is learning how to write computer code.
His father says the Amazon dispute has taught him something, too.
“This whole experience has really motivated me to shop local again,” said François.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
