Web retailer Appliances Online just lost $50,000 because of a 65% mistaken price cut on a kitchen mixer

Tom Szczerbowski/Getty Images

Appliances Online, the web retail operation founded by John Winning, last week took a $50,000 hit because of a mistake on the price of a kitchen mixer.

OzBargain, Australia’s largest buyer community, discovered that Appliances Online was selling a blue KitchenAid Mixer+Spiralizer for $281, a significant discount from its usual of $799.

Within 12 hours, 190 of the Mixers-Spiralizers had been ordered at the reduced price.

“Of course when we walked into work the next morning and noticed the extreme popularity of this product, we immediately corrected the price to be the same as the other models,” Winning says.

“But what were we going to do about our 190 customers who purchased the product? It was a human error so we could just explain to our customers the situation and apologise, informing them that we would not be honouring the price.”

But in the end Winning decided to go with the low price even though that meant a loss of $50,000 to the business.

“I am pleased to say that each of those customers will be getting their blue KitchenAid Mixer+Spiralizer at the discounted price that they purchased it for,” says Winning.

Winning, who is now also CEO of the family business, Winning Appliances, says the retail industry has never been so competitive and every single customer counts.

John Winning: Image: Chris Pash

“Yes that’s right, every customer counts, because each of those 190 customers will now walk away happy, and that’s powerful,” he says.

“So when we say that customer experience is the cornerstone of our business, we really mean it. We put our money where our mouth is, and literally in this case.”

Winning says not all businesses can take a big loss.

“But I have always believed that a good gauge of a business is how they handle a situation gone wrong,” he says.

“Of course, you can’t always make every person happy, but a business that doesn’t at least try to do that might not be in business for the long term.

“Something as simple as a handwritten letter or even a phone call from the manager or boss to a customer is so valuable in developing loyalty and trust and ultimately a great customer experience.”

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