Xbox All Access Pre-orders: A UK Chaos
Last week, the pre-ordering of a next-gen Xbox turned into a chaotic scramble for those purchasing outright. However, an unexpected twist awaited many who chose the payment plan. They were informed that their orders couldn’t be fulfilled, and what’s more, this could potentially impact their credit scores. After several days of bewilderment, customers have now been provided with a guide to determine if they actually managed to secure a console, while credit applications are being examined to ensure that credit scores weren’t unjustly affected by the process.
The Swedish financial technology company Klarna is handling the credit payment process for the Xbox Series X and S All Access Packages in the UK. This bundle enables customers to purchase a next-gen console and two years of Game Pass Ultimate for either £28.99 per month or £20.99 per month respectively. While there’s no upfront cost or interest, the snag is that there are risks associated with buying on credit. Missed payments can result in additional fees, legal actions, or potentially harm your credit score. And this latter issue became a reality for customers when it came to pre-ordering an Xbox, though not through any fault of their own.
The problems kicked off on Tuesday when customers who had pre-ordered an Xbox All Access package from Smyths Toys or GAME had their orders abruptly cancelled. In emails seen by Eurogamer, customers were initially informed that their orders were successful (in some cases by both Smyths and Klarna), but then they received another email in which Klarna stated that it was “unable to approve [their] transaction”, without providing any further details.
Well, @SmythsToysUK keeps throwing this error at me, but apparently I now somehow have a credit agreement with @Klarna. I have absolutely no clue if I’ve bought a console or not… pic.twitter.com/UjlkijwE76
— Andrew Evans (@snavEwerdnA) September 22, 2020
To see this content please enable targeting cookies. Manage cookie settings
Those who reached out to Klarna to inquire about the situation were told, unsurprisingly, that the issues stemmed from a stock shortage, and that their direct debit would be cancelled. But Klarna automatically conducts a hard credit check on all customers when an order is placed. For those whose orders were cancelled due to the stock shortage, this would appear as a decline on their credit report. While some customers were informed by Klarna that this wouldn’t affect their credit rating, others were told it could have an impact – potentially lowering their score and making it more challenging to apply for loans in the future.
Straight from the source at @Klarna regarding declined finance orders through @SmythsToysUK
Not sure what impact this will have on everyone’s credit score.#XboxSeriesXpreorder #XboxSeriesSpreorder pic.twitter.com/OBom7sQpUo
— Matt Clements Gamescom (@ClemFandangoX) September 22, 2020
To see this content please enable targeting cookies. Manage cookie settings
To exacerbate the situation, existing All Access customers – who had signed up on Xbox One and were anticipating a next-gen upgrade – were informed by Smyths that they could apply for an upgrade this week. Those who signed up encountered the same stock problem, with Klarna denying their application and carrying out a hard check on their credit report. As of the time of writing, the Smyths website still indicates that existing All Access customers can apply for an upgrade, although customers are now reporting that they are unable to place an order.
So there’s been no advantage whatsoever to being an existing member of the @xbox All Access programme. Furthermore, I’m tied into @klarna who rejected my order despite taking my money each and every month without fail! Can’t cancel, can’t order elsewhere & now no stock @SmythsToysUK
— Bobbins (@ohbobbins) September 22, 2020
To see this content please enable targeting cookies. Manage cookie settings
The customers we spoke to mentioned that the communication from Klarna and retailers was initially rather limited, mainly in the form of cancellation emails and customer service conversations. One customer told Eurogamer that they were later sent an email from Smyths allowing them to fulfill their order, but it seems the majority of customers didn’t receive this.
“Smyths has emailed anyone who contacted them now – including me even though I did get an Xbox – claiming that anyone who wasn’t contacted by Smyths by this point won’t be receiving an Xbox because Klarna did not approve their credit application,” the customer informed Eurogamer. “Klarna, on the other hand, is asserting that the issue is with Smyths running out of stock while credit approvals were in progress and therefore the lack of Xbox isn’t due to failed credit checks. Neither party is willing to assume any responsibility.”
On Wednesday, Klarna published a blog post clarifying that customers wouldn’t be charged direct debit for failed Xbox orders. Klarna attributed the problem to low stock, explaining that “retailers ran out of stock and had to close online orders while consumers were in the middle of the checkout process, or had just completed their credit applications”. The company also confirmed that those who attempted to place an order multiple times wouldn’t be penalized, as only the first hard check would show up on their credit score. All subsequent attempts would be shown as soft searches, which aren’t visible to other lenders and don’t affect a customer’s credit score.
When Eurogamer requested a comment from Xbox on this article, we were directed to the Klarna blog post. Eurogamer was also sent a Xbox UK Twitter thread which informed existing All Access customers who attempted an upgrade that their “pre-order is secure”, while Xbox is collaborating with retailers to resolve the situation.
Via email, Eurogamer was also informed by a Klarna representative that retailers are working to address the stock shortage.
“For those who underwent the checks and then discovered that the products were sold out, the retailers are getting in touch with them and these customers will still receive their Xbox All-Access bundle as soon as it is back in stock,” the representative told Eurogamer. “For those few customers who have decided that they no longer want the Xbox All Access series (having been informed it’s sold out) but had already gone through all the checks and been approved, Klarna is encouraging them to get in direct contact.”
And, indeed, on Friday evening, Klarna issued a guide to assist customers with the next steps. There seem to be three main scenarios: customers may have received all three order and direct debit confirmation emails, only an email from Klarna, or email confirmation from Smyths and Klarna that was later cancelled by Smyths. It appears that those who experienced scenarios one or three still have an Xbox pre-order guaranteed for them, with scenario one customers set to receive their console at launch. Meanwhile, scenario two customers will need to follow an additional retailer process to secure a console.
Importantly, Klarna is investigating customer concerns that their credit scores may have been affected by the declined orders. “We want to assure all of our customers that we are taking this extremely seriously and will work with the credit reference agencies to remove any mark on your credit file for anyone who shouldn’t have received this,” the post states. “We are currently reviewing every application that was made over the past four days to ensure we rectify this for anyone impacted. If you have any concerns about this, please don’t hesitate to contact a member of our customer service team at customer@klarna.co.uk.”
Bit of an ironic slogan, really.
In a nutshell, it all seems like a rather chaotic mess, with hundreds of customers stuck in various stages of uncertainty between placing an order and actually having their Xbox pre-order confirmed. Although retailers are now working to honor pre-order agreements, and Klarna is checking to ensure that no one’s credit score was unfairly affected, the entire fiasco created a highly stressful situation for customers – and one that could probably have been avoided, given that the rush for pre-orders was something that should have been anticipated.
“We all know that when it comes to game releases, let alone a next-generation piece of hardware, there is a flood of users pre-ordering them,” said former EGX senior account manager Matthew Clements, who was also affected by the pre-order chaos. “There should have been a system in place where Klarna performs soft checks while you’re going through the store to reserve an Xbox, and then once it’s secured, the hard check is made and units are put back into the pool if someone doesn’t meet the financial requirements.”
In a follow-up email sent to customers on Friday, Klarna expressed its deep regret that the Xbox pre-order experience with GAME and Smyths Toys hadn’t been as expected. “We know it has been frustrating and confusing for many of you, and on behalf of Klarna, we sincerely apologize for any inconvenience and distress this may have caused.”
