Games retailer GAME has gone into administration, leaving the future of its Australian operations in doubt. Can you still safely buy from the chain? And what happens with existing orders? Here's what we know (now updated with official statements).
While it's hardly a welcome development, voluntary administration is not quite as bad as a firm closing down for good. As the Australian Competition and Consumer Commission (ACCC) helpfully explains in its consumer guide to insolvency explains, the purpose of voluntary administration is to reorganise the business as a functioning concern: "During a period of external administration companies often continue trading under the control of the external administrator." We don't yet know what the long-term outcome for GAME will be, though the most obvious exit strategy would be sale to another retailer or investor.
With that in mind, I'd offer these three pieces of advice for current and potential consumers. (Mark at Kotaku is continuing to dig into this story, and I'll update if any further information comes to hand.)
Buying goods in-store is fine. If you've paid for something and have it in your hands, there's nothing to worry about. And if stores are closed in a relatively orderly fashion, there may well be bargains to be had.
Buying online is very risky. If you order goods and the administrators decide to close the operations before they ship, you'll be very low on the list of creditors to be repaid. (First up are the administrators themselves, then secured creditors such as banks and landlords.) I'd be holding back from ordering online from GAME for the near future.
Pre-orders are uncertain. If you've pre-ordered a title and GAME can't supply it (which seems to be the case for Diablo III), you're unlikely to receive it, but you shouldn't ultimately be charged for it if you don't get it — any moneys paid should be refunded. I'd keep an eye on your credit card statements just to be sure, and the administrators should provide further details, but that's the basic legal position. That said, you won't necessarily see a refund right this minute — with everything else going on, the process could take a while.
UPDATE: GAME's own FAQ says that it's currently business as usual, so pre-orders won't be refunded until it's clear they can't be fulfilled. More specifically:
We are still working to clarify the status of pre-orders. At this stage we are intending on honouring certain pre-orders placed on the Diablo III and Max Payne new releases. We will provide clarity on these and other new releases in due course.
Remember, if you have paid on a credit card, you should also be able to organise a refund via your card provider if you don't receive the goods.
The official statement from GAME doesn't really change what we know, but adds this comment from receiver Kate Warwick:
Ms. Warwick also noted that the company's customers hold various claims against the company under loyalty cards, gift cards and vouchers. Ms. Warwick said "We are working on schemes aimed at giving customers some return on these claims if they are used to make additional purchases." Further details will be available to customers on-line or in store from appointment.
In other words: spending in store at a reduced level is the likely payout on gift cards or loyalty vouchers. That doesn't seem entirely fair, but when the alternative is getting nothing at all, it's the lesser of two evils.