Frank Rimalovski's Internet shopping troubles began more than a month ago, when he ordered two televisions from Amazon.com. Both were supposed to be shipped within days.
Despite weeks of telephone calls and e-mail messages, the TV sets never made it to Rimalovski's Maplewood, N.J., home for a Thanksgiving celebration. He ended up buying one from an old-fashioned electronics store down the street--just in time for the turkey.
Yet Rimalovski, 34, a venture-capital executive for a technology firm, didn't let the experience dampen his fondness for Internet shopping. He ordered a watch early this month from a different World Wide Web site, as a Hanukah gift for his wife.
Again, the shipment never arrived.
"Traditional shopping is not an easy thing to do, so I look to online shopping for convenience," Rimalovski said. "But I've probably invested seven hours in these problems, most of it on hold. . . . If these companies want to be successful, they better get their acts together."
Happy e-holidays! As a record number of shoppers head online for gifts this year, Internet retailers and shipping companies are scrambling to keep up with the logistical demands of getting millions of packages to millions of customers.
Internet sales are expected to double in the last two months of this year, compared with 1998, to $6 billion, according to estimates by Jupiter Communications. Shipping firms, such as United Parcel Service and Federal Express, are hiring thousands of extra employees to handle the surge. Lillian Vernon Corp. and other retailers that operate online are increasing wages to attract help.
And at Fingerhut Cos., a catalogue company that helps fill online orders for eToys Inc., Wal-Mart Stores Inc. and other retailers, hundreds of white-collar managers, including the chief executive, have been sent to the distribution center to pack orders.
Although many retailers such as Amazon.com declined to reveal how many of their packages go astray, most say fewer than 5 percent of their orders have problems and point out that millions of packages have arrived on time this season. But the Better Business Bureau and consumer watchdog groups say botched deliveries top the list of consumer complaints about Internet shopping, and the holiday frenzy is worsening the problem.
For millions of customers buying online for the first time, this holiday season will determine if Internet shopping is naughty or nice.
"This is a make-it-or-break-it year," said Holly Anderson, a spokeswoman for the Washington-based National Consumers League. "If people are comfortable this year or have a good experience this year, then a lot more people will shop online in the future. If they don't, it could be a real long-term problem for these companies."
Scott Zitano, an avid jazz fan from Fall River, Mass., said he spent hours online and on the phone dealing with his unfilled order for a rare CD from a West Coast company. "I was real high on it until I got stung," he said. "Now I wonder, well, what's the difference between getting it online or just going down the street?"
In some cases, Web merchants have only themselves to blame. The companies have created huge--and sometimes unmanageable--surges in buying this holiday season by flooding the airwaves with ads and offering big discounts. That's because Internet economics so far dictate that attracting large numbers of customers is far more important than profit or marketing costs. In the case of new and inexperienced e-tailers, analysts and retailers said, the companies may not have enough inventory, technological savvy and seasonal employees to ship in time.
Jupiter recently asked 40 online store executives whether warehouses, Web sites and call centers could handle an overnight doubling of business; only 10 percent said they could. One-third of the executives also said their operations were not up to the task of completing all orders, and only 54 percent claimed to have performed tests on their inventory and shipping systems.
"The emphasis and priorities have been more on the front end," said Jill Frankle, an analyst with the e-commerce research firm Gomez Advisors. "They're focusing on getting the customer in the door and are saying, 'We'll deal with other stuff later.' "
Both retailers and shippers insist that they are not the cause of most problems. At Amazon.com, for example, spokesman Paul Capelli said the online retailer has ended its relationship with the company that initially handled shipment of its electronics, including Rimalovski's bungled order.
"What we try to do is set an expectation for the customers so they know when the item they're ordering is due to arrive," Capelli said. "If for any reason there is a delay, we'll notify the customer so they're always aware."
Shippers UPS and FedEx, which together are handling the bulk of holiday package deliveries, each claims its accuracy on shipments is in the high-90s percentile, and both say they have been preparing all year for the record holiday onslaught. UPS expects to ship a record 18 million packages on its peak day Friday. FedEx projects a daily high of 4.5 million packages just before Christmas; last year's peak day was slightly more than 4 million packages.
"A lot more people are shopping online, and someone needs to ship it all," FedEx spokeswoman Carla Boyd said. "It's always challenging, but that's what we're in business to do."
Also targeted for criticism are "fulfillment centers," such as Fingerhut, CyberSource and Keystone Fulfillment, which are companies that fill orders for retailers. Products ordered online from Wal-Mart or eToys.com, for example, may be housed in a warehouse run by Fingerhut, which retrieves and packs the item for delivery by a shipping firm.
Other retailers, including large sites such as Pets.com and Amazon, have opted to spend millions on their own distribution centers. Although industry analysts say both approaches work well, those who run their own warehouses argue that using third parties increases the chance of mistakes.
"I don't think they'll have the same kind of success," said David Rochlin, chief operating officer of Reel.com, an online movie retailer that runs its own distribution network. "If you have 10 to 12 clients, at one point, eight clients might come up to you with problems. You'll have to pick three or five of those problems."
Many complaints stem from a cardinal sin of Internet retailing: not immediately notifying customers that an item is out of stock. Large online retailers such as Lands' End and L.L. Bean have the advantage here, because they have sophisticated systems rooted in the catalogue business that allow them to immediately note if an item is out of stock.
But smaller or less-experienced firms may not know that their inventories have been depleted until it's too late, and often don't adequately inform customers of delays, analysts said.
Cynthia May, a Minneapolis paralegal and antiques dealer, said she ordered a gift set of lipsticks from beauty-aids retailer Eve.com a month ago, only to be told several days later in an e-mail message that the item wasn't available.
"If I had known that when I placed the order, I might have chosen something else," said May, who hopes she still will have time to send the gift to a friend overseas. "They seem to be out of a lot of items, but they don't tell you up front. If they continue to have these problems, people just won't go there anymore."
The company had similar complaints when hundreds recently rushed to order a discounted $1 brush set within a matter of hours. But Miriam Naficy, a co-founder of Eve.com, said many customers don't pay attention to small print that indicates when products are on back order.
"We try as much as we can," said Naficy, who added that the company's success rate with shipping is in the high-90s percentile. "But if there's a big run on a product, of course they won't get the product in the package" with their other products.
Even the largest online merchants and shippers face enormous challenges this year. Low unemployment rates in many markets nationwide have put enormous pressure on companies seeking seasonal workers. At the same time, sales volumes are doubling and tripling.
"It's a little like a race," said William Lansing, Fingerhut's chief executive, one of the hundreds of managers pulling duty in the company's distribution center. "You're getting better, but are you getting better fast enough to keep up with the volume increase?"
Fingerhut, which expects to fill more than 100,000 orders daily in upcoming days, said its own accuracy rate is in the high-90s percentile, but Lansing doubts many of the new e-tailers can boast the same. As an example, he cites the hundreds of Internet firms now on Fingerhut's client waiting list: Some of the companies told him that they couldn't do it by themselves.
"Some of the dot-coms jumped into this," he said. "They didn't plan for the fulfillment pressure. Some of these people wished they planned better."
And it's not just holiday shoppers who are threatened with delays. Scores of customers have complained that Walton Feed Inc., an Idaho-based company that markets Y2K survival packages over the Internet, is months behind on orders.
Kathryn Jones, president of the local Better Business Bureau, said "people are just frantic" at the thought of not having enough pinto beans, instant milk or powdered cheese on Jan. 1. Walton officials did not return telephone calls.
"The whole point is to get it by the end of December," said customer Gayril Gibson of New Orleans, who added that he finally received a year's supply of dehydrated food for his parents after waiting more than eight months. "If you can't get the stuff until next year, that doesn't do a lot of good."
CAPTION: FedEx worker Tim Barden sorts through packages at the L.L. Bean's warehouse in Freeport, Maine.