Store bug costs Kogan over $46k

Summary:A glitch affecting online electronics retailer Kogan Technologies that saw special offers applied to the wrong products this morning has cost the company over $15,000 of lost revenue on one product alone.

A glitch affecting online electronics retailer Kogan Technologies that saw special offers applied to the wrong products this morning has cost the company over $15,000 of lost revenue on one product alone.

The glitch allowed PayPal customers to use a special $30 loyalty voucher across the whole site instead of just for particular products, meaning that some products, like Kogan's digital set top box and PVR product, rang up at $9 with free delivery, as opposed to the usual $39 price.

The glitch was naturally interpreted as a hot deal, which saw it posted to retail bargain hunter site OzBargain at 9.15am this morning, sparking a flood of orders.

Kogan Technologies spent over an hour trying to rectify the problem.

"This was a bug that we were unable to plug until 10.39am, resulting in hundreds of Kogan products being sold at well below cost price," CEO and company founder Ruslan Kogan said today in a statement.

Over 500 orders were placed for the $9 PVR alone, meaning that Kogan Technologies lost over $15,000 in an hour just on that product. The e-retailer added that the glitch had also enabled drastic mark downs for other products, with the total damage for the morning amounting to $46,800.

Kogan said in his statement that his company would honour customer purchases.

"We know we could hide behind our terms and conditions to get out of having to honour these transactions.

"But, we believe the bug in our website was entirely our responsibility, and as a result will be honouring every single purchase made this morning at a significant cost to our business," the outspoken CEO said.

Kogan isn't the only company to suffer a sales hit due to a website glitch, with Dick Smith's New Zealand online store last month discounting all items, from expensive 3D televisions to cheap headphones, to $0. The site was quickly taken offline as a result.

Topics: Outage, CXO, E-Commerce

About

A fresh recruit onto the tech journalism battlefield, Luke Hopewell is eager to see some action. After a tour of duty in the belly of the Telstra beast, he is keen to report big stories on the enterprise beat. Drawing on past experience in radio, print and magazine, he plans to ask all the tough questions you want answered.

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