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Is Underground Cellar the next Premier Cru?

Wounds have not yet healed for many people who lost thousands of dollars of wine due to the fraudulent activities of the retailer Premier Cru in Berkeley, California. It now looks like a whole new cohort of wine lovers may be joining the ranks of the angry due to the overnight shuttering of Underground Cellar on Monday of this week, which I learned about from this Reddit thread.

If you’re a wine lover and spent any time on Facebook in the last couple of years, you’ve no doubt been served an ad from the seemingly innovative retailer. Its gamified model of selling was seemingly unique in the wine industry. They advertised and sold wines in more or less a standard flash-sale approach, but sometimes instead of the wine you bought, they’d give you a bottle of something worth much more. Screaming Eagle and Opus One featured heavily in their ads and on their website, suggesting you might pay for a $28 bottle of Cabernet and instead get one worth $750.

Kind of fun, right? Unless you let them hang onto the wine you ordered in their “Cloud Cellar” instead of getting it shipped to you as soon as you bought it. Because now that they’ve shut down, presumably having run out of money and/or entered bankruptcy proceedings, you can’t get the wine you’ve bought shipped to you. Some customers are suggesting that the Cloud Cellar was nothing more than the same kind of Ponzi-scheme that occurred at Premier Cru. Many point to the terms and conditions on the Underground Cellar website, which make it clear they reserved the right to substitute wines at their discretion no matter what you actually purchased.

Sounds awfully familiar to a lot of people in the Bay Area. Of course, there’s no clear evidence that Underground Cellar was doing the same thing that Premier Cru was doing (i.e. taking people’s money for wine that they never had to sell and never would), but it’s clearly a problem for people like Reddit user Otherwise-Sample1627: “I have over $3k worth of wine in their cellar. What a scam. How can this be legal? I’ve tried calling and emailing and haven’t heard anything. I feel a lawsuit coming.”

Indeed, a Class-Action suit is being investigated as we speak.

Many more Reddit users are complaining of not being able to get their wines, some of whom report their potential losses in the thousands of bottles and tens of thousands of dollars.

If indeed the company has gone into bankruptcy proceedings (and frankly, even if it hasn’t), things look grim for most of these customers. Most people who were owed large quantities of wine from the Premier Cru fiasco got pennies on the dollar if they got anything at all.

I hope there’s a decent resolution to all this for the company’s customers, but it’s not looking good. Let this be an excellent reminder to take possession of the wine you buy within the time window that your credit card of choice will protect you against non-delivery of your purchase.

Read the full Reddit thread.

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