Thousands of customers who placed orders with the bankrupt online bookstore Booktopia will not receive 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 as it laid off more than 200 staff.
Booktopia was Australia’s largest online bookstore with 54.7 percent of the market, well ahead of its closest competitor Amazon with 11.1 percent 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 sum in August.
Sydney chef and author Nagi Maehashi, who runs the successful RecipeTin Eats website, took to social media on Wednesday to tell followers she would personally refund any orders for her new cookbook that Booktopia was unable to fulfill.
“This is a message to customers who lost money by pre-ordering my new cookbook Tonight from Booktopia,” Ms. Maehashi wrote.
‘Booktopia will not honor previous book orders [July 3]… I have received concerned messages from readers and I completely agree that this is unfair.”
Ms Maehashi said it had soured her mood ahead of the book’s launch date, so she decided to do something about it herself and refund fans from her own pocket.
Booktopia, Australia’s largest bookseller, went bankrupt after customers were told their outstanding orders would not be fulfilled and they would not receive refunds
Booktopia went into voluntary administration in July this year after racking up debts of around $60 million.
Most of that debt is owed to suppliers, mainly book publishers, but with $12 million in unfulfilled customer orders and $3 million in gift cards.
According to some reports, there are approximately 150,000 unfulfilled orders.
The new owner, online electronics store digiDirect, will reportedly offer “special packages to customers with unredeemed gift cards.”
Daily Mail Australia has contacted digiDirect for comment.
Booktopia also owned the Angus & Robertson and Co-Op brands.
Customers with unfilled orders can nominate McGrathNicol Restructuring as unsecured creditors through administrators, but they would likely be at the bottom of the list to receive any recovered money.
Another option is to request a chargeback through a bank or credit card company.
The company went into voluntary administration on July 3, just weeks after announcing more than 200 job cuts
This is a dispute about a transaction made via a card that the customer believes is an error.
“The rules and process for chargebacks are governed by the schemes of Visa, Mastercard and others, not by the banks,” Tyro head of payments Michael Bjazevic told us. MoneyMag.
‘If a customer asks their bank for a chargeback, it will be decided based on the rules of the card system whether it is valid. Banks that are members of card schemes are legally required to pursue chargebacks under contract law.”
Examples of cases where a chargeback may be requested include multiple charges for the same purchase, fraudulent purchases, charges for a canceled recurring payment, and cases where a company has gone bankrupt.
There is a time limit within which a chargeback must be requested.
This varies by card issuer, but can take as little as 45 days or up to 120 days.
If a chargeback is denied, customers can submit a request to the Australian Financial Complaints Authority, which will review the claim.
Booktopia has not taken responsibility for pre-orders coming into administration, but has offered to support customers seeking chargebacks through their lenders.
Ms Maehashi, a former accountant, said pursuing a refund through the new owner would be “pointless” as the agreement to buy the company would have set out that it would not take unfulfilled orders.
‘I used to work in the business world. I know how they work, they’re not going to offer a refund ‘just to be nice’. It is not their problem legally,” she said.
Bestselling author and founder of RecipeTin Eats, Nagi Maehashi (pictured), offers fans a refund out of his own pocket
She said those who purchased her book from Booktopia can contact her for a refund
It is not known how many pre-orders of Ms. Maehashi’s new book have been taken on Booktopia, but her previous title RecipeTin Eats: Dinner is reported to have sold approximately 253,000 copies across all retailers in 2023.
This would make that book one of the country’s bestsellers, with the new book currently the most pre-ordered book on Amazon Australia.
Booktopia’s new owner, digiDirect’s Shant Kradjian, told the Australian Financial Review he plans to immediately invest millions of dollars into the company’s recovery.
“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 benefits. With solvency secured, Booktopia can now resume trading.
While the undisclosed sale price does not cover the company’s current debt, reviving operations revives the company’s revenue stream, which could bring relief to publishers who have delivered inventory and customers with outstanding backorders.
All current staff will be retained and there are plans to recruit a further 100 staff, including possibly some who were made redundant two months ago.
And the fact that the new owner is an Australian company bodes well for a continued focus on promoting titles from local authors.
However, shareholders will see no return from the sale and the company will still have to pay a $6 million fine for making misleading statements to customers about their consumer rights.
Some have also raised eyebrows over past sales and marketing practices, including putting out-of-stock titles for 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 statements, stating that consumers were not entitled to a refund for digital products such as eBooks for any reason, including if the product was defective.