10/16/2008 12:10:00 PM
Virgin Mobile to probe Woolworths sales
At least one network is investigating whether it has been misled over its sales in Woolworths, after documents came to light suggesting that the retailer sold thousands of phones to a distributor and passed them off as sales through its tills.
Documents obtained by Mobile suggest that Woolworths and Comment Retail ran a buyback scheme going back as far as 2006. They also reveal that Woolworths advised Comment to connect phones on the network after it had collected them in order to prevent operators detecting the scheme and clawing back retail commissions.
The advice was sent in an email purportedly from a senior mobile buyer at Woolworths to a director at Comment Retail. The email confirms the terms of a specific deal to buy back 5,000 Alcatel C635 handsets priced at £34.99 on the Virgin Mobile network, and states: ‘Due to the revised terms with Virgin, the handsets need to be used in month two to show activity, as discussed you have confirmed that you can manage this. If any premium rate activity is apparent and we are investigated we will have to clawback the commission from you to compensate any shortfall that Woolworths may incur.’
The buyer concerned has denied authoring the note to Mobile. However, the message was accompanied by a spreadsheet entitled ‘Comment Buy Back and Connection Planner’, allegedly recording the sale and connection of 65,000 Motorola, Sagem and Alcatel phones dating back to 2006. It detailed targets for thousands of phones to be collected and the number of phones that were connected to the network.
Mobile has seen further documents, such as a programme for the collection of phones that includes a schedule for the collection of 25,000 phones from 819 Woolworths branches in April 2007 (right).
Mobile understands that at least one operator – Virgin Mobile – is in possession of the documents and is set to raise its concerns with Woolworths.
Mobile has also spoken to former Woolworths branch managers who have confirmed that phones were sold in bulk to a third party. One said: ‘I can confirm that there were people who would come round [from a company], buying particular phones off a list … They bought them at the normal price.
‘In terms of normal sales … you could only ever sell a maximum of two phones to a customer. When this other company came round to buy them back, it was made clear it was alright [to sell more] and there was the authorisation to do that.’
A senior member of Woolworths’ mobile team denied the existence of any buyback scheme: ‘We work with Comment, as you know they’re our preferred distributor. They are not even a distributor. [Comment] has done some work moving stock within stores. We might ask [the company] to move a collection of stock from one store to another. [It] will move that stock with our authorisation. You couldn’t just send someone in, that’s got to be pre-approved.’
Mobile offered all parties the opportunity to see the documents and provide an explanation. Woolworths declined the offer and provided this statement: ‘Woolworths has good trading relationships with all the mobile phone networks and works with them to deliver strong mobile sales for both parties.
‘Woolworths never comments on confidential information relating to any of its suppliers. This includes Comment Retail Services and Virgin Mobile.’
Comment Retail’s public relations company requested copies of the documents, but Comment did not make any response after a week.
Virgin Mobile declined to comment.