RitzCamera.com Explains it All

The people at RitzCamera.com did their homework and finally got back to me. In fact, I had a pleasant conversation with the company’s chief financial officer. We’re all friends again. The problem’s in their order processing system are the government’s fault, apparently, but we’ll get to that later.

Mr. CFO was mortified and apologetic about my prior very bad experience as a customer on his company’s Web site. You’ll recall that my first online order simply disappeared into the ether, beyond the query reach of the customer service rep I spoke with.

“We process thousands of orders every day and it’s inevitable that a few get kicked out of the system for manual processing,” he said. Reasons for this include a bad address, invalid credit card, or issues with a distributor. Though he didn’t know the specific reason my order jumped up and said “fix me,” he did know that the customer service rep (CSR) in India processing the order deleted it from the system. “The rep screwed up,” said Mr. CFO. “He is not doing this job any more.”

The deletion caused the order to disappear – at least as far as this rank-and-file CSR was concerned. Only A super-CSR would be able to find it. The online order eventually was located by the company’s customer service head. “It was never actually out of the system,” says Mr. CFO.

Well, ok. We don’t know why the order got bounced, but we do know it still was in the system.

As for the second order, here’s where our own little financial meltdown happened.

RitzCamera.com, like thousands of other large corporations, uses a variety of distributors to fulfill customer orders. Which distributor the system assigns to a particular line item on an order may not be the one physically closest to the customer’s delivery address. Well, that seems pretty silly, right? Read on.

Here's where the plot takes an unexpected twist. Enter, a new character: tax nexus. It makes life very difficult in the universe we know as online order fulfillment, or eCommerce. In a nutshell, this means that a company based in any state must charge sales tax – regardless of the physical location of the item being purchased, if the company – or even its fulfillment distributor has a brick-and-mortar presence in the state to which the order is being delivered. Yeah, I know.

RitzCamera.com, based in California, has no presence in Massachusetts, where I live. (The Ritz Camera stores you see in the local mall belong to a different corporation, and are not a factor.) What a smart fulfillment application does is find a distributor that has the item in stock AND which has no tax nexus, in this case, in Massachusetts. I think it’s silly, but let’s go along with this just for laughs.

Now, we get to the truly odd circumstance that made the second order bounce. The item I was purchasing, a 36-inch by 50-foot roll of Hewlett-Packard Artist Matte Canvas for my HP Designjet Z3100 printer. (HP is not the issue, either.) It turns out that of the dozens of distributors RitzCamera.com uses for order fulfillment, only one carried the item, and apparently, that distributor has a tax nexus here. As a result, the order-processing application, designed to recognize that as a no-no, disallowed the transaction. (I would have paid the sales tax if they had asked.) We don’t know if this is why the first order bounced. By the way, the two states that are toughest in enforcing tax nexus, according to Mr. CFO, are Massachusetts and Tennessee.

What about a really big electronic shopping site, like Amazon.com? Mr. CFO says that Amazon has “hundreds or perhaps thousands of distributors to avoid nexus issues.”

I’m pretty sure this episode is not what led to the Wall St. meltdown on which the feds are about to spend nearly a trillion of our dollars. But it does go the heart of serving and servicing the customer, doing it quickly, and doing it well. For solutions providers, the message is that the application you install may contain processing logic that is highly nuanced. You need to be prepared for the un-preparable.

Mr. CFO asked that I give RitzCamera.com another try. I promised to do so.

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