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I suspect what happened was that 80percentarms.com grabbed a whole bunch of orders and charged cards with no ability to ship anything at the time. If that's true, it's also quite possible they used all that money as if they had already earned it, leaving little to none left over to deal with cancelation requests.
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I have no opinion on 80%arms, but you just described the furniture store business model.
Sell stuff that hasn't been made yet for twice what you can order it for and take a 50% deposit to secure your cost of ordering from the factory.
But, the way it worked in practice was you had net30 terms with the factory, so the first 50% was your profit and what the customer paid upon delivery would pay the factory. So you'd spend the deposit as soon as you got it.
Then if you go out of business before the stuff is delivered, suddenly the customer is an unsecured creditor when he never realized he was putting himself in that position. The store's broke, customer's money is long gone, and he has to start over with ordering his furniture somewhere else.