Another daily deals site has discontinued operations, amid allegations of non-payment and mismanagement by vendors, customers and staff.
247deals.co.za, formerly 247deals.co, entered the South African e-commerce market at the beginning of last year. Headed by Jerry Biti, CEO of Australian digital solutions company Gambit Global Systems, the daily deals site has been accused of terminating operations and failing to honour its debts to customers, vendors and staff.
However, according to Biti, the site was temporarily put on hold last month, after a group of “fraudsters” targeted 247deals over December and January. Biti says a group of “foreign” conmen set up phoney companies and deals. “The fraudsters were buying their own 'deals' using fake bank accounts. They were very organised.” Biti claims the business lost R600 000 through the incident.
Dishonest deals?
A string of complaints, posted via online customer service site HelloPeter.com, reveals dissatisfaction on the part of both customers and vendors, who accuse 247deals.co.za of not honouring deals and being “dishonest”, “unprofessional” and “non-responsive”.
One daily deal buyer said on 19 May that she was told by a vendor they no longer accept vouchers from 247deals, as they could not get their money from the company. Another post, on 31 May, reads: “I am of the opinion that 247deals is going bankrupt. The suppliers, as well as customers, have been defrauded of their money.”
A number of complainants echo these sentiments, claiming vendors would no longer do business with 247deals due to non-payment.
“I raised my concern about false advertising and [asked for] a refund - to date, I have had NO feedback what so ever! I'm truly disgusted in 247deals.” (sic)
Another complainant, who claims the vendor he purchased a voucher from in January had not honoured the deal, asked: “Do they not screen their vendors?”
Yesterday, a frustrated online shopper wrote: “I bought a voucher for an African shirt. Trying to redeem it is impossible. The phone number of the company on the voucher does not seem to be working and neither is the number at 247deals - have they gone bust?”
In the dark
As of the latter part of last month, 247deals.co.za, which offered deals in various categories typical to that of most daily deal models and served all major cities in SA, has not been available online - nor is it doing business. Biti, however, says it is merely “on hold” due to fraud that “hit [the company] hard”. He says he plans to have the site up and running again “sometime this month”.
According to the domain registration for 247deals.co.za, the domain was not renewed on the designated payment date, 2 April, and the site was subsequently discontinued, last month.
Meanwhile, customers and the 10-odd employees of 247deals have been left in the dark as to what is happening with the business. Karl Stark, GM of 247deals since August last year, says he returned from study leave last month to find the company was no longer operating. He says he does not know what is happening and “cannot get a straight answer”.
Stark says he is fielding calls from angry customers and vendors on a daily basis. “I am being sworn at daily, but I can't give them answers, because I haven't been given any myself.”
Employees claim they have not been paid since March, despite the fact that they were effectively still working up until mid-May. At least one staff member has made a case against Biti with the Commission for Conciliation, Mediation and Arbitration.
Biti says, however, that employees are merely out of work for the time being until “we can hopefully get it sorted out, as well as get assurances from the banks that we do not take all the risk”.
He says 247deals did not issue a notice as to what had happened because “we did not want to jump the gun until we knew the whole picture and knew the next steps”. Biti says he hopes to be able to “address all concerns soon”.
Asked whether 247deals has a vetting process in place for vendor selection, Biti says he has learned “the hard way” that the daily deals business model is “very different” in SA. But he says: “I am a fighter and have no doubt that we will come back bigger and better, no matter how long it takes.”
ITWeb reported on major daily deal site closures in December last year, with the most recent failed venture, Dealify, closing shop after about seven months of operation. This was closely preceded by Zappon, which lasted roughly nine months, and Dealio, which treaded water for about 10 months.