UPDATED: The GAME fallout – Where do customers stand?

By Claire Reilly

Following yesterday’s news that the Game Australia has gone into voluntary administration, many consumers have been left asking questions about what will happen to their personal investment with the retailer.

PricewaterhouseCoopers has now provided information to consumers on the Game Australia website, outlining the status of pre-orders, deposits, gift cards and the retailer’s loyalty program.

Unfortunately, when it comes to consumer entitlements, it's not always good news in cases like this.

When a company goes into administration, suppliers take on a new role as creditors in the process and are covered by Australian Consumer Law. These creditors may have unsold stock that they wish to reclaim or outstanding debts to recoup, and they can make a claim to the voluntary administrators known as a ‘Proof of Debt’. However, they won’t know the nature of their claim until after the second creditors’ meeting, when the future of the company is decided.

Administrators also have employee wages and benefits to consider, though these are largely provided for under the Federal Government’s General Employee Entitlements and Redundancy Scheme (GEERS).

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Consumers no doubt feel the sting when a retailer that they have been loyal to goes under. When news broke yesterday, gaming fan sites and internet forums were filled with angry customers venting their losses – including anger that many pre-orders of the popular game Diablo III would go unfulfilled and un-refunded.

According to the ACCC, consumers are generally considered “ordinary unsecured creditors and as such do not have any priority under the Corporations Act and will only be paid after monies owing to other classes of creditors have been repaid”.

Unsecured creditors include customers who have “paid in full for goods or services to be collected or delivered later; paid a deposit, such as in a lay-by agreement or interest-free offer; bought a gift card or voucher and have not used it; returned a product and been issued a credit note”.

This covers a large majority of Game’s disgruntled customers.

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So what have the administrators said about what Game customers are entitled to? PwC outlined the following in the information it provided on the retailer’s website.

Consumers are currently unable to seek refunds on deposits (including on pre-orders).

“We are still working to clarify the status of pre-orders," said a PwC statement on the site. "At this stage we are intending on honouring certain pre-orders placed on the Diablo III and Max Payne new releases. We will provide clarity on these and other new releases in due course.

“We are not able to refund customer deposits and customers who have paid a deposit for a pre-ordered item at this stage should continue to monitor the website for further updates.

Gift cards, gift vouchers and in-store credits are not refundable – Consumers must spend 3 times the voucher value in cash.

“We are prepared to honour existing gift cards, gift vouchers and credit notes for most of the products in our stores or online on the basis that these can only be used for 25% of the total purchase price. For example if you have a $15 gift card, you are required to spend at least $60 in store or online, in order to redeem the gift card, with the balance of $45 to be paid in cash. Gift cards, gift vouchers and credit notes cannot be used in conjunction with other customer benefits such as pre-payments, loyalty programme/GAMEON points etc.

“We are not able to provide refunds to customers who hold gift cards, gift vouchers and credit notes. Customers who are unable or unwilling to apply them in the amended scheme set out above may have an unsecured claim against the Company and should complete the Proof of Debt form…providing details of your claim as well as the original gift card, gift voucher or credit note.”

Game’s loyalty scheme points can only make up 10% of a sale – Consumers must spend 9 times the points value in cash.

“We are prepared to honour existing redemptions under the loyalty program on an adjusted basis as outlined below. Points can be used for up to 10% of the purchase price of existing products (for example if a game was purchased for $20, this would need 1000 points worth $2 and $18 of cash). Points cannot be used in conjunction with other customer benefits such as gift cards, vouchers or credit notes. Unfortunately customers will no longer be able to accrue further points under the loyalty program at this stage.

“Customers who hold points and are unable or unwilling to apply them in the amended scheme set out above may have an unsecured claim against the Company and should complete the Proof of Debt form…providing details of your claim including your loyalty card number and balance of points.”

Where does this leave you? Feel free to respond in the comments box below.

UPDATE

Blizzard Entertainment, the creator of the Diablo gaming franchise, has announced that it will be offering recompense to Game consumers who have been short-changed on Diablo III pre-orders.

The company used announced its official Australia/New Zealand Twitter feed to confirm that it would assist affected consumers, linking to a statement on its Diablo III microsite:

“We're aware that some Australian GAME customers have been left out in the cold on what should be the hottest night of the year — the launch of Diablo III,” the statement read. “To help with this situation and get these players into the game as soon as possible, we've put the following process in place.

“Australian GAME customers with a valid preorder/prepurchase receipt dated before May 15, 2012 can do the following:
1. Purchase the digital version of Diablo III from http://www.diablo3.com now or anytime before May 21, 2012.
2. Download and start playing when the servers go live!
3. Submit your GAME Australia preorder/prepurchase receipt to us before June 30, 2012.
4. Receive a credit from Blizzard, for the amount you paid in advance to GAME Australia for Diablo III. This credit will be applied to the payment method used for the digital purchase.”

Further details on how to submit receipts will be available on the Diablo website as they come to hand.

 


 

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