From the Toledo Blade the other day:
Online Version
Toledo BBB among agencies flooded with complaints about computer site
By GARY T. PAKULSKI
BLADE BUSINESS WRITER
VERMILION, Ohio - When GPS Computer Services, Ltd., here began advertising laptop computers at the low price of $500 on its web site last year, orders poured in from around the country.
But now, the Toledo area Better Business Bureau, Ohio Attorney General, and Chamber of Commerce in this 12,000-resident Lake Erie resort community are flooded with complaints from angry customers saying they?re sick of waiting for merchandise.
"I feel their pain and I?m trying to help them out," replied Terrance Holmes, GPS?s 37-year-old founder and chief executive.
He was unprepared for the huge response to the offer, he conceded. A bank account holds $169,000 collected from customer credit cards for laptops and other computer equipment.
But the money is controlled by an online payment service, which, because of complaints from anxious buyers, will issue refunds to them but no money to the company to buy computers to fill orders, Mr. Holmes said.
"We have closed the account for excessive consumer complaints for non-delivery or delayed delivery and are holding the funds to process existing and expected consumer refund requests," said Vince Sollitto, spokesman for PayPal, Inc., of Palo Alto, Calif.
About 500 orders, dating to November, remain unfilled, the GPS chief conceded.
Officials at the BBB in Toledo are frustrated by the problems. "We?ve received about 200 complaints," said Jan Muir, dispute resolution specialist. "Most end up being resolved with a refund or delivery of the merchandise. But they keep rolling in."
The GPS chief met in December in Columbus with an aide to Attorney General Betty Montgomery. Mr. Holmes said he has been working with the agency to resolve complaints. Ohio?s deceptive sales practices act requires mail-order firms to deliver orders within eight weeks or offer the customer a refund. Firms that violate the law can be fined and are subject to other civil penalties.
Stephanie Beougher, a spokesman for the attorney general, said agency policy prevented her from saying whether an investigation is under way. She confirmed, however, that GPS customers have filed 58 complaints, including 20 since Jan. 1.
The firm has dropped the online payment service, PayPal. GPS now bills customer credit cards directly. But the card isn?t billed until five days before delivery, eliminating a big source of complaints, Mr. Holmes said. PayPal billed when the order was placed, he said.
Price increases have helped reduce problems. The cheapest laptop advertised on the web site now is $725.
Mr. Holmes described himself as a computer systems specialist who was unprepared for the rapid growth experienced by his firm when he went from a firm offering computer classes to an Internet retailer a year ago. Sales soared from $200,000 in 2000 to $2.5 million in 2001. "I was caught off guard," he said.