A small appliance business in China specializing in washing machines faced potential losses of up to 30 million yuan ($4.3 million) due to a staff member mistakenly typing the wrong price for some washing machine models on an online shopping website, triggering a rush of orders.
Over 40,000 orders were placed on the store’s website in just 20 minutes on the evening of August 28, according to Red Star News.
To quickly stem the losses, the business apologized and asked customers to withdraw their orders.
The store explained that the mistake occurred due to a misunderstanding by one of its employees regarding the rules of a promotion on the Tmall shopping website, which is operated by the Alibaba Group.
The store calculated that it would lose 30 million yuan if it fulfilled all the orders because the initial price of the total products ordered by customers amounted to 70 million yuan, but customers only paid 40 million yuan.
One customer, Ms. Wang, learned about the incredible discount through social media on August 28. She purchased three washing machines on the online store, two of which were usually sold for 1,699 yuan ($244) but were priced at only 299 yuan ($43). Another washing machine that was supposed to cost 2,499 yuan ($359) was listed at just 439 yuan ($63).
As soon as she saw the store’s apology statement, she immediately heeded the store’s call and canceled her order.
According to the store’s statement, most customers bought multiple washing machines and placed orders “in a professional manner.” This suggests that the bulk orders may have been made by businesses aiming to profit from the mistake rather than individuals merely seeking a bargain.
“Due to negligence, we made a serious mistake. We realize that this issue has caused confusion among the public and has severely disrupted the market,” the company acknowledged.
Little Swan Dongshan, the franchise store, stated that they only had six employees, and their profits had been barely breaking even for several years due to the economic downturn.
“Tens of thousands of orders and tens of millions of yuan are astronomical figures for us. We sincerely apologize to all affected customers,” the company said in a statement.
“I am extremely sorry for my mistake. By the time I realized it, 20 minutes had passed. I don’t have the ability to compensate for such losses to the company even if I sell all my assets,” said the employee who made the mistake.
The local market supervision authority stated that they are investigating the cause of the store’s inaccurate pricing.
Zhao Liangshan, a lawyer from the Shaanxi Hengda Law Firm, told The Paper portal that if a company deliberately misrepresents prices to gain online visibility or boost sales, they would be subject to penalties per regulations.
However, if the mistake is genuine, the company can petition the court to annul the sales contract, allowing them to refund customers without delivering the goods.
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