Play.com to shut down direct retail business

ReenaSewraz
by Lovemoney Staff ReenaSewraz on 09 January 2013  |  Comments 10 comments

Online retailer Play.com is to close its direct retail business and operate solely as a marketplace from March.

Play.com to shut down direct retail business

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 (10)

  • Aquasponge
    Love rating 38
    Aquasponge said

    Taxes on the P&L go up and people lose their jobs. Imagine how many jobs would be created if tax was reduced further / eliminated from Income or profit completely.

    The UKs asset base would be given a breath of new life and idle assets would reduce.

    Work for the low paid might actually start to pay and the runaway deficit / welfare could start to be tamed.

    The owners of our society could actually start to pay for the laws and state that exist to protect. Procession is of course nine tenths of the law.

    The ancient Greeks understood this. Its a shame that thousands of years later the modern Greeks or most in the high debted economies are so dumbed down and so easily satisfied with 21st century serfdom.

    Lets hope the next generation are more awake.

    Report on 09 January 2013  |  Love thisLove  0 loves
  • Nickolarge
    Love rating 4
    Nickolarge said

    One problem we have in the UK is that everybody wants to buy stuff at a cut price rate and then wonders why they get a cut price rate of pay from their employer.

    Report on 09 January 2013  |  Love thisLove  1 love
  • rbgos
    Love rating 84
    rbgos said

    A shame for those who want to minimise what they spend regardless of societal cost... a bonus to all the remaining (and struggling) independent music shops in towns around the country, the jobs they support (mostly of people who truly love and know music, beyond knowing how to put a CD in a cardboard envelope), the music lovers who still shop there and search out new and interesting music, and the bands, obscure and mainstream, whose CDs are sold there for a price realistic to both purchaser and artist.

    In our thirst to shave every last penny off each purchase, it's all to easy to ignore the fact that, by doing so, we are killing off the industry that makes the music we love (unless you only buy music by winners of The X Factor).

    (N.B. I am not in the music business, this is not a rant in aid of my own pocket, it is a rant in defence of those recording the music I love listening too)

    Report on 09 January 2013  |  Love thisLove  0 loves
  • alexms
    Love rating 8
    alexms said

    99% of those who were buying from play will keep buying online. The difference is that they will pay slightly more to suppliers in low VAT areas like Luxembourg and Switzerland. The Chancellor has increased purchasing costs on the British public, cost over 200 jobs just at this one company, lost tax revenue on the company's profits and the associated staff income tax etc and for what? To increase revenue from VAT. Shame that VAT will go to the Swiss instead of to him.

    Report on 10 January 2013  |  Love thisLove  1 love
  • ajrr1
    Love rating 19
    ajrr1 said

    Re: Alexms - I wonder how long it will be before the EU changes the rules to go after these low VAT areas?

    Excuse my terminology (which is probably incorrect), but as far as I know the VAT relief on items below £18 costs the Revenue £100m+ per year. Across the whole EU this must be massive.

    I share your disappointment though. They would have had to this handle this a lot better if they wanted to do anything other than cost jobs, tax revenue etc. They've tried to solve a complicated issue with an overly simplified solution.

    Report on 10 January 2013  |  Love thisLove  0 loves
  • meldrewreborn
    Love rating 70
    meldrewreborn said

    The loophole that allowed Play to flourish was a distortion of competition. UK consumers benefited but the Tax raised in the UK (rather than the CI) was minimal and other retailers in the UK felt (correctly) that either they should all have the same benefit or the concession should go.

    I don't weep for Play or its workers, their proposition was founded entirely on the loophole, it is fairly obvious that the more the loophole was exploited the more likely it was to be closed. Its fate was sealed as soon as it got too big.

    Report on 10 January 2013  |  Love thisLove  1 love
  • davidinnotts
    Love rating 2
    davidinnotts said

    Play and Amazon weren't the only CI companies using the loophole. 7dayshop was another, and like Amazon, they've used the grace period to restructure and are still one of the best in the market. I guess that Play had other problems, and I'll miss them for the remaindered bargains, though other have them too. After all, we're only talking about a, what, 16%? differential.

    To argue that people today look for bargains and that's unfair because it costs jobs is nonsense - it always was that way! Or we must follow the logic and have the whole EU and partners go back to the 'good old days' of Retail Price Maintenance (RPM) and manufacturers setting a price which all sellers had to keep to or be refused wholesale goods?

    No way do I want to go there, even though it kept thousands of workers in jobs in small shops, working inefficiently because there was no competition. For those of you too young to remember those times, remember that it's the origin of the Recommended Retail Price that still guides prices in the UK today. Just imagine a world where that is the legally-enforcable selling price!

    Minimum-wage labour in bad conditions was a feature of retail employment ever since there were shops, and just because a few companies have been stopped from having an edge won't alter the overall situation for workers. Though I do agree that it's almost impossible to provide quality service with rock-bottom prices. It's here where consumer power comes in - with enough good information on who can do this quality-with price thing efficiently, and who shouts it but doesn't deliver, we can make safe choices. And that's where LoveMoney, Which? and others help us, along with the good old word-of-mouth.

    Report on 10 January 2013  |  Love thisLove  0 loves
  • electricblue
    Love rating 769
    electricblue said

    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 !

    Report on 13 January 2013  |  Love thisLove  0 loves
  • rojbalc
    Love rating 10
    rojbalc said

    @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.

    Report on 14 January 2013  |  Love thisLove  0 loves
  • yocoxy
    Love rating 152
    yocoxy said

    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..

    Report on 16 January 2013  |  Love thisLove  0 loves

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