CompUSA chief executive Gilbert Fiorentino will have a final chance Tuesday to try to save his job after an internal whistleblower investigation prompted his ouster.
News of the investigation marked a dramatic fall from grace for the man who started TigerDirect as a catalogue retailer and built it into a subsidiary of a public company, eventually acquiring the CompUSA name to fuel a retail expansion. The final decision on his firing will be made after Tuesday’s meeting of the Systemax Executive Committee, the parent company of TigerDirect and CompUSA.
Yet when Fiorentino was escorted out of the CompUSA and TigerDirect Miami headquarters two weeks ago and placed on administrative leave, the news didn’t come as a complete shock to many insiders. A corporate culture of “fear and intimidation” started with Fiorentino and filtered throughout most of the company, employees said.
“I always knew that one day he would piss off the wrong person and they would turn him in,” said William “Cully” Waggoner, a former employee who was fired in 2009 after five years with the company, but won a court settlement challenging the action. “He was making a lot of money for the company and I think people looked the other way for a long time.’’
Vendors and employees describe a company run under a “pay for play” model where suppliers who paid more money got their products the most exposure on the company’s websites or in stores. Small vendors say the costs didn’t always justify the sales.
Smaller vendors like Prolynkz claim that TigerDirect’s practices put them out of business. Owner Sean Pate said he still hasn’t received full payment on his last major shipment, sent about 18 months ago. TigerDirect also regularly demanded credit for products it claimed never arrived and forced his company to take excessive markdowns, he said.
“They just sat on our inventory and bled us dry,” Pate said. “We always had to hassle them to get a check. They would only pay after we sent them more inventory. It was an ongoing cycle where we were always behind.
“They would use the smaller vendors as the bank to pay the big guys,” Pate said. “After they bled you dry, then they would replace you with a new guy.”
Systemax officials declined to comment. The company has not released any details about the whistleblower investigation, other than saying it will not impact earnings. Fiorentino did not return calls to his cell phone or a message on his Facebook account.
David Strasser, managing director at Janney Montgomery Scott, wrote in a note to investors when the firing was announced that Fiorentino “placed his personal interest ahead of the company’s interest, as we understand from our discussion with management.”
The internal findings were no surprise to Waggoner and other employees, who said a corporate culture of “fear and intimidation” permeated TigerDirect and CompUSA. In the call center, supervisors would stand on a platform yelling at employees who weren’t answering enough calls or spending too much time on any one call. The yelling was so loud customers could hear it on the other end of the phone.
Employees described being in constant fear of losing their jobs and being forced to work overtime hours without compensation.
“They browbeat employees and threatened my job several times,” said Sachi Gobeal, one of several personal assistants to Fiorentino for more than two years, who left the company late last year. “It was always about scare tactics. If you didn’t do this you were going to lose your job. You busted your butt and you were never compensated. You were promised a bonus, but it was really just payment for all the extra hours you worked.”
Waggoner and at least a dozen other employees sued the company in federal court alleging violations of the Fair Labor Standards Act. Most received payment from TigerDirect in out-of-court settlements that they and their attorneys are not allowed to discuss, records show.
Waggoner says he and others were unfairly classified as “exempt” employees ineligible for overtime and forced to work as much as 55 or 60 hours a week.
Fiorentino defended requiring the overtime hours in several e-mails written in November 2008, that were filed in court.
“We are all lucky to have jobs,” Fiorentino wrote. “Google cut, Microsoft cut, Ebay cut, everyone is cutting their workforce … Time for EVERYONE to appreciate our situation and work 60 hours a week. I am so glad I don’t need a job today – you should hear these calls I get, real people with real families with NO JOB FOR CHRISTMAS!
“People from Tweeter are willing to take pay cuts and work 60 hours a week, what makes us any different?” he wrote. “60 hours is the standard.”
In the wake of the whistleblower complaint, there are indications that Systemax is trying to alter its corporate culture. A memo last week to employees talked about embracing changes like a more “open management style” and elimination of competitive postings of hours worked by each employee.
“The prior management regime was not the reason for the Company’s success – you were,” the memo stated.
The employee litigation is far from the only federal court battle TigerDirect has faced in recent years. Dell sued TigerDirect for trademark infringement for “repeated and blatant” violations regarding the resale of its computers. The Florida Attorney General’s office sued the company and its subsidiary onrebate.com in 2008 for failing to pay advertised rebates to consumers.
TigerDirect’s philosophy, according to an unnamed former controller referenced in court documents, has been that “if the customer complains, you send them out the check to make them happy. But if they don’t complain they totally forget about it, that is the concept of these rebates.’’
The “rebate program was convoluted and designed to wear down the consumer to the point that the consumer would finally give up their right to the rebate, thereby resulting in an improper windfall” to the company, the attorney general’s office wrote in court filings.
Systemax and TigerDirect settled with the attorney general’s office last October and agreed to pay $200,000 in attorney’s fees and donate $100,000 to the Florida Alliance of Boys and Girls Clubs for the purchase of computer equipment.
The rebate case is just an example, employees said, of how Fiorentino was always looking for ways to boost the company’s bottom line regardless of the impression his actions might create.
Waggoner reports an incident where the company took advantage of an employee-only promotion with supplier AMD, ordering hundreds of computers in employees’ names without permission. Then the company turned around and sold the products on the website or in stores at a higher price.
Gobeal, the personal assistant, said there were multiple instances where the chief executive ordered items with a company credit card that were supposed to be for the company, then appropriated them for personal use. The items included kitchen accessories and a Kindle ebook reader.
Gobeal says Fiorentino regularly used another assistant in the office as his personal handyman and boat captain. The assistant spent most of his time on personal matters for Fiorentino, including errands related to the construction of his new home.
Others tell stories of Fiorentino appropriating free products and gift cards given to employees by vendors, as incentives or rewards for reaching sales targets.
“If he wanted it, he took it, for whatever reason,” Waggoner said.
TL;DR: A bunch of fellow SD'ers tried to take advantage of a very, very obvious price mistake by stacking a huge coupon from a different product onto this TV from TigerDirect. By mistake, the TD system allowed this coupon and SD'ers placed many orders. The $720+ TV (already on a big 30% sale at $500) now became about $240 shipped.
Not surprisingly, the bad coupon was pulled in minutes, but the damage was done.. many orders were placed. Some SD'ers received tracking numbers, but found their deliveries "intercepted by UPS" as TD told UPS to not deliver the TV packages and to instead return their merchandise.
TD offered the sale price of $500 for the $720 TV for customerswho complained, but refused to honor the very obvious price mistake. Some SD'ers even found their card charged the full amount of $720 as the fraudulent coupon code was removed from their orders and totals reset to the normal price.
Please let this be a lesson to us SD. We all want the best possible deal, but when it's an obvious price mistake, it's not always worth it to order and "see what happens". Yo son, how do you know this was a price mistake????? Its pretty hard to say that just because a retailer is havign a sale, means its a price mistake . A company can not alter the amount you agreed to pay. Your argument will NEVER justify a CRIME that TD committed. Morality of SD'ers exploiting a suspected flaw aside ==> that is NOT a crime. What TD did WAS. PERIOD!
While a vast majority just get cancelled and 'no harm done', for every deal with a happy ending and a great deal, there's another that ends like this with customers being overcharged and having their checks bounce or having their money locked up in "authorization limbo" or having to spend a long time disputing before ending up back where they started.
If you see a deal that feels like a price mistake, please, please weigh all the risks before ordering!
#2: TD has/had the RIGHT to cancel all orders, but they do not have the lawful right to alter a transaction and charge MORE money to a CC than the owner of that credit card agreed to pay. The seller decided not simply to cancel all contracts which again would have been fine. But altered a financial transaction w/o the permission of the owner of the CC and profited from that transaction.... NOT FINE!
I agree with #2, all was fine until they overcharged what was listed on the invoice... however, it was a bug in the system and not intentional... these systems are highly automated. The response to the fraudulent $480 coupon code on a $720 order was to delete the code from the system, which (on some orders) reset the price back to $720. Careless by TD? Absolutely! Illegal by TD? Perhaps!
But it doesn't change the "lesson" in that trying to cash in on OBVIOUS price mistakes often times cost us a lot more than a few minutes of our time in "trying". And it certainly seems that they end up in disaster like this with overdrawn cards being charged full amounts rather than these fraudulent orders actually getting fulfilled. My PERSONAL opinion? If you KNOW it's a price mistake, stay away. It's not right and not very nice. For example, these SD'ers who go in and try to overnight the order so they can get the product before the company can realize they're being ripped off? Give it a break! That's not right.
But obviously, that's my personal moralopinion. However, if you do decide to exploit an pricing error by a company, don't ever be surprised from now on when it ends up like this!!! Two wrongs make a right now, huh? I'll edit the memo
TIGER DIRECT'S Groubal response
Has been edited out since it seems to be suspect. TD has not honored ANY of the details
stated in the "official" response, and Groubal has failef to reply to a request to double-check
The veracity of the reply since contacting TD results in the same runaround as before.
Once results are seen that TD is living up to this response it will be updated again.
From Reading the Response ON groubal it sound like If your order is cancelled or yet to be shipped. you will not receive anything. The response is only satisfactory for the orders that are shipped not for all the people who placed the orders.
Dec 6: Approx 6pm est time, Many orders are placed for the LG 32LD550 + LG AN-WF100 Bundle on tigerdirect.com. Using a coupon code found on many sites, total came to 229.98 +shipping (and tax for some)
Dec 6: Order confirmations were received and showed the price of 229.98 + shipping and tax.
Dec 6: Although emailed order confirmation & actual billed price was 229.98 + shipping and tax, the online invoice showed $719 + shipping and tax..
Dec 6: around 10:10 PM, Billing Information was received by UPS from Tiger Direct or their Vendor. 11:53 UPS came and picked up packages.
Dec 7: Around 2:44am, packages left Hodgkins, IL in UPS's hands.
Dec 7: Some customers in IL started receiving the TV, some got the dongle and others got canceled.
Dec 7: Mid afternoon, TD sent out an email blaming their system for causing all of this
Dec 7: Many panicked buyers canceled orders
Dec 7: TD starts to bill $719 to cards with out an authorization for this amount.
Dec 7: By evening a handful of people reported getting their packages.
Dec 8: More packages out for Delivery, some started getting intercepted by UPS (later to be mostly Paypal orders)
Dec 8: TD starts blaming customers for making up the coupon code, and calling customer liars, threatning to sent to collections and ruining credit.
Dec 8: Affiliate email is found with coupon code, proving TD created it
Dec 8: TD refuses to be civil and starts charging everyone 719.xx for the order without any authorization
Dec 8: Delivery intercepts continue to roll in, but more deliveries are made of the TV. Some with dongle, some without.
Dec 8: The 719.xx posts to credit card accounts, debit accounts, going over limits and bouncing accounts.
Dec 8: TD cancels many of the dongles to be sent out with the bundle
Dec 9: More Delivery intercepts done, at times UPS gets to customers door, but then refuses to drop off
Dec 9: More deliveries are made of TV
Dec 9: TD continues to push blame on other people, has not once said they were to blame.
Dec 9: CNET site found displaying code and 229.98 price
People You need to get INVOLVED!!!!
CALL OR EMAIL YOUR LOCAL NEWS
They won't hear us if we make no noise.
TigerDirect is already taking steps to screw as many of us as possible. Sign the groubal to show them that they will need to take us on as one group instead of as individuals if they are going to resort to illegal tactics.
It is likely that what TD is doing in your state is an illegal business practice if you have agreed to a purchase amount only to
see that amount be reversed and inflated after the fact. For the Attorney Generals office in your state follow this link-
Go to tigerdirect.com, sign into your account. You have multiple options here, starting with order history, invoice copies and return authorizations. After that is E-Mail messages. CLICK HERE. It will be a copy of you invoice that was emailed to you in PDF format. THIS SHOWS THE $244.12 PRICE
It won't add to your cart.
Seetachi888: Confirmation email ($244.12) authorization amount ($244.12) charged amount ($734.13) payment methods (Amex) items received (yes) action taken (Signed GROUBALS, emailed VP of TD, complained to AG of FL, disputed the unauthorized charge of Amex) outcome (pending)
Kutty_Jatti: Confirmation email ($244.12) authorization amount ($244.12) charged amount ($719.99) payment methods (Discover) items received (Only TV) action taken (Signed GROUBALS, emailed VP of TD, complained to AG of FL, disputed the unauthorized charge of Discover Reviewed TD at Reseller Ratings) outcome (pending)
Wreckonized: confirmation email 244.12 first authorized amount 244.12 charged amount 719.99 paid with wellsfargo CC item is still in transit signed all the groubals, disputed with wellsfargo, sent them email confirmation, reviewed on resellerrating
I do believe you are not understanding the situation. This is not about price mistake. It is about
- unauthorized and fraudulent charges
- lying to costumers when asked about the situation
- lying to credit card company about the situation
- removing online records of their price mistake.
yet you are only focusing on the price mistake portion and treating it as a price mistake when it shouldn't be. I am sure your users will find it valuable that this company will charge people without authorization or notification. Isn't that what your website is about? Furthermore I believe it is the people on deal sites that made resellerrating a success. I've been contributing to the site when it only had tech websites. So who are you helping anyways???
I believe that you are not understanding the situation. 100% of the reviews posted to our site for TigerDirect will appear within 48 hours.
The guy from RR seems to not be taking the heat too well after reading his comments I haven't used RR as a basis for stores in a couple years since I believe there was an issue a while back with retailers making fake reviews and pretty much screwing over the whole system.
Even the BBB will take a "bribe" (aka fee) to improve your score. Wouldn't be surprised if RR got kickbacks from TD as well to censor all the reviews as "price error related" hilarious.
Long story short: We as SDers know what retailers are good and bad. TD has never really been one of them. Medicore at best. It's not the first time they have screwed SDers over. We can just try to make our best judgment by spreading the word to others and not rely on some site that inconsistently marks "reviews" to be in favor of the merchant, rather than the consumer.
I'm disappointed that a long time SD'er would make such baseless accusations.
I believe that you are not understanding the situation. 100% of the reviews posted to our site for TigerDirect will appear within 48 hours.
I didn't place an order, but have been following this thread. I believe that you are not understanding the situation. You have all of these reviews categorized for "price error", when there is an overcharging/fraudulent issue here. I think you need to re-categorize all of the "bad" ratings given to Tiger Direct that specify an issue with unauthorized charges and actually have them count against TD.
Incorrect. We've been around since 1996. Since that time, we've lost countless sponsors who thought they could pay us to remove bad reviews. We do not play favorites. TigerDirect is not benefiting from the 32+ bad reviews that will appear on their reviews page in 48 hours.
Any BS posts out there about us "extorting merchants" were posted by scammer merchants -- if you read them, you'll see that.
You call them scammer merchants, but it is in your interest to vilify them. Is it not true that you have a tier system that charges more per month depending on the size of the merchant's workforce? The merchants you listed here are hardly considered big, probably the $29 a month tier. Tigerdirect is one of the bigger ones, they flash ads on your front page, you collect affiliate commissions from them in addition to their "monthly fee".
Merchants paying you is a conflict of interest and casts a shadow on any reviews or ratings in your system, which from your own acknowledgement is a flawed rating system, weighted in favor of positive reviews.
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