By  on May 20, 2005

NEW YORK — The clamor is getting louder for vendors to band together and form a committee to fight chargeback abuses.

"This is the first time in 25 years that our industry, on the vendor side, has the opportunity to be offensive instead of defensive," Marketing Management Group principal Allan Ellinger said Thursday.

If retail-vendor arrangements are to be true partnerships, vendors must take advantage of a "limited window in time" to get it back on track and balanced, Ellinger said during a panel discussion at the Princeton Club on "Chargebacks & the Saks Disclosures: Have They Changed the Retailer-Vendor Equation?" The event was hosted by law firm Phillips Nizer.

The two-hour discussion also included perspectives from Arthur Bargonetti, former president of operations at Tommy Hilfiger Corp.; Donald Kreindler, a partner at Phillips Nizer, who on Tuesday filed a lawsuit against Saks on the chargeback issue on behalf of his client, International Design Concepts, and Saul Berkowitz, an accountant and managing director at American Express Tax and Business Services. Kreindler said the firm decided to sponsor the panel discussion because the "hot topic of conversation among clients is the impact of the Saks probe and whether or not it will change the retail-vendor landscape."

By the end of the event, several people gave business cards to the law firm's representatives, suggesting that Phillips Nizer could be a conduit to forming the committee.

Ellinger told the audience that he had approached New York Attorney General Eliot Spitzer regarding chargebacks and that Spitzer's focus was aimed at how the practice affects consumers. Ellinger said he tried to explain how vendors design "cost sheets" for each retailer and how prices for one retailer can differ for another retailer. He said he sought to explain how the end cost to the consumer varies among the retailers as they adjust their prices to reflect the costs associated with a particular vendor.

"Shortly after, I got a letter stating that [Spitzer's office] didn't think that the problem is large enough yet to impact the consumer,'' Ellinger said. "So I urge all of you to call Eliot."

Ellinger said he also spoke with the U.S. Attorney's office in Manhattan, which is handling the Saks investigation.

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