6pm.com Pricing Mistake

6pm.com

Hey everyone – As many of you may know (and I’m sure a lot of you do not), 6pm.com is our sister site.  6pm.com is where brandaholics go for their guilt free daily fix of the brands they crave.  Every day, the site highlights discounts on products ranging up to 70% off.  Well, this morning, we made a big mistake in our pricing engine that capped everything on the site at $49.95.  The mistake started at midnight and went until around 6:00am pst.  When we figured out the mistake was happening, we had to shut down the site for a bit until we got the pricing problem fixed. 

While we’re sure this was a great deal for customers, it was inadvertent, and we took a big loss (over $1.6 million - ouch) selling so many items so far under cost.  However, it was our mistake.  We will be honoring all purchases that took place on 6pm.com during our mess up.  We apologize to anyone that was confused and/or frustrated during out little hiccup and thank you all for being such great customers.  We hope you continue to Shop. Save. Smile. at 6pm.com

Cheers!

Aaron Magness

Director of Brand Marketing & Business Development

Zappos Development, Inc.

Twitter: @macknuttie

Update: Upon further investigation and clarification with our merchandising team, I realized that the statement about "capping everything on the site at $49.95" was not 100% accurate. There are some items that are sold on both 6pm.com and Zappos.com, and those items were not affected by the pricing mistake. The pricing mistake applied to items sold on 6pm.com but not Zappos.com (the vast majority of inventory available on 6pm.com). The actual dollar figure of our loss is accurate - over $1.6 million. Let's just say this was not a boring weekend for us.

Update 2: We've received a number of inquiries asking for more details as to what happened, so here are more details from Tony Hsieh (CEO, Zappos.com, Inc.):

We have a pricing engine that runs and sets prices according to the rules it is given by business owners. Unfortunately, the way to input new rules into the current version of our pricing engine requires near-programmer skills to manipulate, and a few symbols were missed in the coding of a new rule, which resulted in items that were sold exclusively on 6pm.com to have a maximum price of $49.95. (Items that are sold on both 6pm.com and Zappos.com were not affected.)

We already had planned on improving our internal pricing engine so that it will have a much easier-to-use interface for our business owners. We are also planning on adding additional checks and balances to hopefully prevent this type of thing from happening again.

To those of you asking if anybody was fired, the answer is no, nobody was fired - this was a learning experience for all of us. Even though our terms and conditions state that we do not need to fulfill orders that are placed due to pricing mistakes, and even though this mistake cost us over

$1.6 million, we felt that the right thing to do for our customers was to eat the loss and fulfill all the orders that had been placed before we discovered the problem.

PS: To put an end to any further speculation about my tweet (

http://twitter.com/zappos/status/14576863056 ), I will also confirm that I did not, in fact, eat any ice cream on Sunday night.

Tony Hsieh

Follow me on Twitter: http://twitter.com/zappos My new book: http://deliveringhappinessbook.com

Comments

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May 23, 2010 at 8:44 pm StefanieS9281 said:

After reading about the extraordinary customer service of zappos.com in Jeanne Bliss' book "I Love You More Than My Dog", I'm not surprised at the honorable response to this mishap. More companies should stand out as much!

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May 23, 2010 at 9:15 pm JamesT9288 said:

Yet again Zappos you take the higher road, and this is why I purchase from you. If there's a mistake you fix it and you don't charge the client for it.

If only we had more services/websites/vendors like this in our world (ARE YOU READING THIS AIRLINES!).

You show integrity with everything you do and you put the customers first... and we love you for it.

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May 23, 2010 at 10:24 pm JessicaB12njoy said:

I love Zappos because I love FREE shipping both ways. 6pm.com in my eyes you are still an awkward step sister.

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May 24, 2010 at 2:38 am BrendaT9328 said:

i 'didn't' know that 6pm was my favorite shoe site's 'sister'; but i did just order my son's boots from 6pm because they had EXACTLY what he was looking for....although i had to pay $15.00 for 2 day shipping. I love Zappos for their free shipping both ways and the VIP shipping upgrade they give me with every order!!!!

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May 24, 2010 at 2:22 pm BenP9363 said:

August of last year, Best Buy did the same thing, and then refused to honor the sales, canceling everyone's orders. I'm glad to see you have the integrity to honor them, even though you probably don't have to.

I'd never heard of your site before today, but I'll definitely be doing some looking around now. I like doing business with companies that honor their customers, even when it costs them.

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May 24, 2010 at 5:26 pm 172pilot said:

I'm glad someone brought up the Best Buy example for "compare and contrast"... Zappos - Second to none... Best Buy, Worse than EVERYONE on customer care..

Zappos - You probably earned enough good press over this to recoup the 1.6m by saying it was "advertising expense" and I'm just another very thankful customer!!!

Keep it up - Dont let Amazon change you one bit!!

-Steve

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May 24, 2010 at 7:12 pm JessicaB12njoy said:

Ben and pilot I totally agree. Best Buy is so arrogant they act like no ones ever gone broke selling TVs and computers. Zappos, thank you for your Core Values!

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May 24, 2010 at 10:18 pm hutbay said:

Forget Best Buy, dell has the worst pricing engine, I have had so many of my orders canceled I don't bother spending my money with them. Bravo Zappos...you also were right to brag about it and get the publicity worth more than the $1.6M :--)

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May 25, 2010 at 3:55 pm Prussakov said:

Excellent handling of the uneasy situation, Aaron. Just posted my thoughts about it at http://bit.ly/cbEsBU

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May 29, 2010 at 4:07 am GrantO9749 said:

Holy bleep. Zappos, I have never bought anything from you before, but after reading this, I promise to buy all future shoes from you *purely because* I am jaw-droppingly stunned with this level of customer service. I cannot even begin to fathom ANY other company doing this. Amazon wouldn't do this, that's for sure. You are literally the best company (and I mean literally!) for doing this, and for not firing anyone too! I'm telling lots of friends about this, as well as my family and shopaholic sister. This sort of behaviour should not go unrewarded.

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Jun 4, 2010 at 10:42 am HuntingBigfoot said:

I am in awe. It reminds me of my favorite business book, The Radical Leap. When I read it I actually cried and thought to myself how amazing would it be to find, and work with people of that caliber and depth.

Heres to hoping I will be very soon! I really don't know what to say about how you chose to handle this learning experience other than WOW! Talk about grace under pressure.

Oh and one last thing, please hire me! hehehe

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Nov 24, 2010 at 6:25 pm KathyB25575 said:

Zappos....you are awesome!!!

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Dec 2, 2010 at 6:55 am KimberleyB said:

Kudos to you, not only for honoring the erroneous prices in spite of the financial hit, but also for not firing anyone over it. Mistakes happen, and how you handled it shows you're a stand-up company.

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Dec 25, 2010 at 9:52 am NeelD31102 said:

Here are some thoughts about price mistakes in e-retail both for consumer and sellers. http://eretailpricemistakes.wordpress.com/2010/12/24/e-retail-shop-price...

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Zappo's As I have said before, you are the best company I have ever ordered from. Kudos to you for standing by your customers on the major mishap....If I had been shopping during that time, I would be happy to pay full price for the items bought for 49.95....And that is only because you have been very kind to me on all my purchases, your emails make me laugh, and your peeps are truely the finest! I wish that every employer could be half as fun as you! Thanks Zappo's!

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Mar 31, 2011 at 11:54 pm MaraK45261 said:

Don't EVER order from Zappos "sister site" 6 PM!

I ordered boots which are too small. All I want to exchange them for the next size. They told me I have to go to a post office or shipping store and pay to return them.

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My experience with 6pm.com left a very unfavorable impression on me due having received defective merchandise n early May ithat I had to pay to return and pay to order. At the time I didn't even know they are associated with Zappos and the fine customer service I enjoy where I buy most of my shoes. My email to 6pm was never even answered and remained totally ignored. Here I am again reminded of the high standards Zappos has in reading about them honoring a mistaken price to their customers. Integrity wins loyalty.

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Sep 28, 2011 at 8:28 pm DesireeA74563 said:

A very recent negative experience with 6pm is what brought me here. As another person had mentioned, 6pm does not respond to e-mails. After a couple of days of receiving no response, I called and was on hold for over 30 minutes before a live person was available. The gentleman who was "assisting" me wasn't the most professional guy in the world either. Faaaaaaaar cry from the amazing customer service that I've received from Zappos over the years, which made it kind of hard for me to believe that the two companies were in any way associated. :-/

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