Thousands of customers who placed orders at the collapsed online bookstore Booktopia will not get their purchase or their money back.
The company, founded in 2004 by Steve Traurig and brothers Simon and Tony Nash, went into voluntary administration and stopped taking orders on July 3 this year, making more than 200 employees redundant.
Booktopia was Australia’s largest online book retailer, with 54.7 per cent of the market, well ahead of its closest competitor, Amazon, with 11.1 per cent of book sales.
It is understood that any outstanding orders placed before July 3 will not be refunded or fulfilled by new owner digiDirect, which bought the company for an undisclosed amount in August.
Sydney cook and author Nagi Maehashi, who runs the successful website RecipeTin Eats, took to social media on Wednesday to tell her followers she would personally refund any orders for her new cookbook that Booktopia couldn’t fulfill.
“This is a message to customers who have lost money by pre-ordering my new cookbook Tonight from Booktopia,” Ms. Maehashi wrote.
‘Booktopia will not be accepting pre-orders for books before (July 3)… I have received angry messages from readers and I completely agree that it is unfair.’
Maehashi said that it had been affecting her mood leading up to the book’s release date, so she “decided to do something about it” herself and refund fans out of her own pocket.
Booktopia, which had been Australia’s largest bookseller, collapsed when customers were told their backorders would not be fulfilled and they would not receive a refund.
Booktopia entered voluntary administration in July this year, after accumulating debts of around $60 million.
Most of that debt is owed to suppliers, primarily book publishers, but with $12 million in unfulfilled customer orders and $3 million owed on gift cards.
According to some reports, there are around 150,000 unfulfilled orders.
The new owner, online electronics retailer digiDirect, will reportedly offer “special deals to customers with unredeemed gift cards.”
Daily Mail Australia has contacted digiDirect for comment.
Booktopia also owned Angus & Robertson and Co-Op Brands.
Customers with unfulfilled orders can appoint them as unsecured creditors through administrators McGrathNicol Restructuring, but they would likely be at the bottom of the pile to receive any recovered funds.
Another option would be to request a chargeback through a bank or credit card issuer.
The company went into voluntary administration on July 3, just weeks after it announced that more than 200 jobs needed to be cut.
This is a dispute of a transaction made using a card that a customer believes is an error.
“The chargeback rules and process are governed by the schemes of Visa, Mastercard and others, not the banks,” said Tyro head of payments Michael Bjazevic. money magazine.
‘If a customer requests a chargeback from their bank, a decision is made as to whether it is valid, based on the rules of the card system. Banks that are members of card schemes are legally required to issue chargebacks under contract law.
Examples of where a chargeback may be requested include multiple charges for the same purchase, fraudulent purchases, a charge for a canceled recurring payment, and cases where a business has gone out of business.
A chargeback has a window within which it must be requested.
This varies depending on the card issuer, but can be as little as 45 days or as long as 120 days.
If a chargeback is rejected, customers can make a request to the Australian Financial Complaints Authority, which will review the claim.
Booktopia has not been responsible for pre-orders accrued prior to administration, but has offered to assist customers seeking chargebacks through their credit providers.
Maehashi, a former auditor, said seeking a refund through the new owner would be “futile” as the company’s purchase agreement would have stipulated that it would not accept unfulfilled orders.
‘I used to work in a company. I know how they operate, they won’t offer refunds “just to be nice.” Legally it is not their problem,” he said.
Bestselling author and RecipeTin Eats founder Nagi Maehashi (pictured) is offering her fans a refund out of her own pocket.
She said those who bought her book on Booktopia can contact her for a refund.
It is not known how many pre-orders for Ms. Maehashi’s new book were placed on Booktopia, but her previous title RecipeTin Eats: Dinner sold around 253,000 copies across all retailers in 2023.
This would make that book one of the country’s best sellers, while the new book is currently the most pre-ordered book on Amazon Australia.
Booktopia’s new owner, digiDirect’s Shant Kradjian, told the Australian Financial Review that he intends to immediately invest millions of dollars to transform the company.
“Booktopia’s infrastructure and systems are very good and we believe that with some investment and the right team and strategy, we are well positioned for growth,” he said.
The announcement of a new owner has several immediate advantages. With solvency assured, Booktopia can now resume operations.
Although the as-yet-undisclosed sale price does not cover the company’s current debts, the revival of operations revives the company’s revenue stream, which may provide relief to publishers who have supplied stock and customers with backorders.
All current staff will be retained and there are plans to hire an additional 100 employees, potentially including some laid off two months ago.
And the fact that the new owner is an Australian company bodes well for a continued focus on promoting titles by local authors.
However, shareholders will not make any profit from the sale and the company will still have to pay a $6 million fine for making misleading statements to customers about their rights as consumers.
Some have also drawn attention to past sales and marketing practices that included putting out-of-print titles on sale.
Booktopia was fined $6 million by the Australian Competition and Consumer Commission in 2023 for making misleading statements on its website.
It said consumers were only entitled to a refund, repair or replacement if they notified Booktopia within two business days of receiving a product that was defective or not what they ordered.
Booktopia also admitted to making misleading representations, stating that consumers were not entitled to a refund for digital products such as e-books for any reason, even if the product was defective.