Play.com to shut down direct retail business
Online retailer Play.com is to close its direct retail business and operate solely as a marketplace from March.
Play.com is to shut down the direct sales section of its online shop from March 2013.
The company based in Jersey blamed the move on the end of Low Value Consignment Relief (LVCR) in April 2012.
LVCR was a tax loophole that allowed Channel Island and other EU-based companies to export low value goods worth under £15 to the UK without paying VAT.
The online retailer will be making 147 finance and warehouse staff redundant in Jersey and 67 other workers will go from its Cambridge and Bristol offices.
The marketplace
Play.com said in a statement that the company intends to focus on its successful marketplace and to phase out the direct retail side of the business.
On PlayTrade, the marketplace on Play.com, shoppers can already choose from 20 million new and used listings available from multiple sellers.
Play.com charges 10% plus a 50p per sale fee to PlayTrade sellers or 10% plus a £19.99 a month fee to high volume Pro Traders on the marketplace.
Shopper’s rights
Play.com told us there will be no changes to its current return and refund policy for direct sales in the lead up to the March deadline.
When you order using the marketplace any returns or refunds need to be directed to the individual seller, but if a dispute is not resolved within three days Play.com will take over the case.
Alternatives
If you don’t fancy being forced to shop in the marketplace on Play.com, here are some other online options for when you’re searching for cheap DVDs, CDS and books.
Amazon has a Guernsey-based distribution centre, but has yet to show any signs of suffering from LCVR. You can shop direct with Amazon or use its huge marketplace of sellers.
Tesco Direct/Asda Direct /Sainsbury’s Entertainment - the online shops for these three supermarkets offer great deals on entertainment often undercutting high street rivals by a significant amount.
Find a DVD / Find a Book compare the prices of the major retailers to make sure you find the best price on a DVD or book every time.
What do you think of this move by Play.com? Are you now more or less likely to use the site?
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Comments
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Surely it's reasonable that all retailers active in the UK market work under an even tax regime? Play was cheaper because it didn't pay VAT. In addition to downloads, I'm sure they played their part in the downfall of HMV..
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@davidinnotts - I agree that manipulating retail prices to keep them high seems like a very old-fashioned solution carrying serious inefficiency, however a completely free market approach isn't the answer either. It's not consumers looking for bargains that's unfair, it's companies not being able to compete on a level playing field. If you walk down the high street of any small to medium sized town in the UK and look at the amount of empty or run-down shops, as they can't afford to renovate them, it's pretty depressing: Not only do they have to deal with the competition of the massive Tescos etc. offering their wares at loss-leading prices, which has been on the rise for years, but now also cheap internet imports. It's clear - as a consumer, if I can get something a bit cheaper on the internet, but see it in town, I'll quite likely buy it in town. However, if I know I can get it for, say, half the price via some imported goods, I might well go home and order it online. It's not 'a few companies no longer having the edge', it's more and more local retailers going to the wall as they've no way of competing. I don't have the answer, but at very least there has to be some regulation to ensure import taxes, duties etc. are paid.
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Much as my heart bleeds for those companies who exploited the VAT loophole and it's significance to the earth shattering importance of cheap CD's, I would much rather prefer some answers as to why it is possible for Chinese sellers to post items on a tracked, signed for service, for less than half of what I can send out samples by Royal Mail post in in the UK to UK customers. It is also a THIRD of the cost to send a parcel to the UK from Germany by Deutsche Post and Parcel Force than the other way round. So much for helping small business in the UK !
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16 January 2013