In this space back in May, 2016, I published an article about the lawsuit against the online flash seller, Wines ’Til Sold Out (WTSO). The article, which I thought was fairly innocuous at the time, has turned out to be my most visited post in the nearly seven years that I have been publishing this blog.
This past January (2018), I published an update about the lawsuit and it is now the third most visited post on this site.
Why so much interest? Well, although I do not have any hard data to support this claim, anecdotal evidence suggests that Wines Til Sold Out is the top (or at least very near the top) “flash” wine merchant on the internet (I have tried several times to get their sales figures, but not one request has received so much as a blunt rejection—other such retailers that I have spoken to have confirmed my assertion that WTSO is #1).
For those of you hearing about this for the first time, here is a quick background on WTSO:
- WTSO is perhaps the original “wine flash site.” They offer a single wine at a time, at a discount* until it is sold out, when they then offer another wine. (At some point over the last year, WTSO started offering additional bottles for sale—not just the singular “flash” item.)
- The site is at least tangentially connected to Jonathan Newman, who was the former Chairman of the Pennsylvania Liquor Control Board (PLCB). At that post, Mr. Newman started the “Chairman’s Selection” program, which offered wines at fairly substantial discounts. It is fairly safe to say that the WTSO business model is based on the Chairman’s Selection model.
- That model is fairly straightforward: the buyer (be it the PLCB or WTSO) agrees to buy the entire stock of a particular wine at an extreme discount. The winery, perhaps in need of cash or looking to move an under-performing vintage, readily agrees, which creates a win-win of sorts.
- My personal feelings and interactions with Mr. Newman aside, I feel I have benefitted from both WTSO and the PLCB Chairman’s Selection Program (which continued even after Mr. Newman was forced out—another story entirely).
And now a bit about the lawsuit:
- In early 2016, a group of plaintiffs filed suit against WTSO with two main complaints:
- WTSO would acquire wine under labels that were not available anywhere else—either via the internet or an actual winery—and would fabricate a Suggested Retail Price (SRP) that would make it appear as though WTSO’s offered price was a substantial discount.
- On wines not produced or bottled specifically for WTSO, the plaintiffs claimed that WTSO artificially inflated the SRP to once again make it seem that the offered price was a better “deal” than perhaps it actually was.
- The plaintiffs, in conjunction likely with their lawyers, decided to make the case a class action lawsuit, thus involving many more litigants and considerably more potential dollars.
- Thus, at the base of this suit is the difference between the stated Suggested Retail Price and the actual price for the wine being offered by WTSO.
As I stated in my previous articles about this suit, I have been a big fan of WTSO pretty much since its inception. I stopped buying from the site a few years ago, not because of any discontentment with the site, but rather since, frankly, I need more wine like I need a hole in the head.
I also asserted in both of those earlier articles that despite buying hundreds of bottles from WTSO over the years, I was never swayed by the amount of “savings” claimed by WTSO since before each purchase I made, I would conduct a fairly cohesive internet search on the specific wine.
Apparently, not everyone does that, hence the lawsuit.
Earlier this year, I received this (A legal notice outlining the potential settlement that had been reached):
The postcard indicated that there would be a credit issued for wine purchased from WTSO “at any point from March 15, 2010 to November 1, 2016.” Those credits would vary between $0.20 and $2.25 a bottle, but the postcard did not any further, stating that further information was available at www.winesettlement.com (a website that no longer exists, apparently).
Before I headed over to the website, I checked Cellar Tracker to see how many bottles I had purchased from WTSO during that period.
425 bottles. Whoa.
After some quick math (I used the median of $1.225/bottle), I figured I would be receiving somewhere around $500 from WTSO, and even though I really did not feel defrauded in any way by the company, 500 bucks is 500 bucks.
Thus, I went to the website and registered.
There I read quite a bit about the case and the settlement. A few important points I gleaned:
- WTSO does not admit to any liability or “wrongdoing.”
- The credits are good for one year and can only be used in increments of $2 per bottle.
- The total amount set aside for credits is $10.8 million.
Then I started to investigate a little further and discovered that there is a fairly elaborate process to calculate the amount of credit per bottle received. Simply put, for most bottles, there is a $0.20 credit. For the select few (mostly brands created for or only available through WTSO), the larger credits would be issued based on the price paid for the bottle.
So I calculated.
Not five hundred bucks, but still better than a sharp stick in the eye.
After the settlement was agreed to in August, I received an email from WTSO informing me that my “reward” was $115 (which was pretty close to what I calculated—I wasn’t going to quibble over $8 even though they were clearly wrong). Originally, I would have been eligible to receive half of that “reward” as a cash payment since WTSO could not (at the time) ship to Texas. That has since changed, so the cash is no longer an option.
I have about eight months remaining to use the credit, but it is only good for $2/bottle and certain wines are excluded (but there is no clear indication on how that will be communicated other than once one tries to buy the wine). I have also noticed that not all wines are eligible to be shipped to Texas, but, again, there is no indication until the time of check out.
So it is not entirely clear what the results of the lawsuit are for me personally, yet. I am not sure if I will be able to use any or all the $115. What is clear?
- WTSO is claiming they are “paying out” $10.8 to their customers. The fact that this is in the form of credits to be applied to (perhaps) wines that have been priced with that discount factored in is not mentioned at all.
- The original plaintiffs in the class action were each awarded $2,500.
- The lawyers for the plaintiffs were awarded $1.8 million. So who really wins here?
So, I “get” $115 that I will probably never use, and the lawyers get $1.8 million even though they may have never purchased a single bottle from Wines Til Sold Out.
Yeah, that seems fair.