A small Chinese company specializing in selling washing machines is facing a potential loss of 30 million yuan ($4.2 million) after an employee mistakenly labeled products with the wrong prices.
Little Swan Dongshan Franchise Shop, a small business based in Anhui, China, has been forced to ask customers to cancel their orders after one employee’s blunder caused a 20-minute online shopping spree that could result in a net loss of $4.2 million. Chinese news outlet Red Star News reported that on August 28, over 40,000 orders for various washing machines were placed on the small company’s Tmall online store until someone noticed the pricing errors and took the store offline. In that 20 window, Little Swan sold 70 million yuan worth of washing machines for only 40 million yuan, which means it might have to incur losses of $30 million yuan if forced to honor the orders.
Photo: Getty Images/Unsplash+
“Tens of thousands of orders and tens of millions of yuan are astronomical figures for us. We feel sincerely sorry for all the affected customers,” the company said in a statement. “We humbly beg you to understand our difficulties and to agree to withdraw orders. We will refund you as fast as we can.”
Apparently, one of the company’s employees accidentally labeled some of its washing machines with the wrong prices because they misunderstood the preferential pricing of its Tmall online store, which resulted in heavy discounts that immediately caught shoppers’ eyes. For example, washing machines usually priced at 1,699 yuan ($240) were priced at just 299 yuan, while models that should have been 2,499 yuan were wrongly priced at 439 yuan.
“Due to the misunderstanding, we made a significant mistake,” the owner of Little Swan Dongshan Franchise Shop said. “We recognize that this issue has caused confusion among the public and has seriously disrupted the market. We feel deeply guilty and upset.”
To convince people that the heavy discount was the result of a person’s mistake, Little Swan Dongshan Franchise Shop released a short clip of the employee responsible for the pricing error in which they apologized for the blunder, adding that they couldn’t cover the losses even if they sold everything they owned.
The local market supervision authority is currently investigating this case, and legal experts told SCMP that “the company must present compelling evidence demonstrating that it has indeed made a genuine mistake so that the court will be persuaded to rule in favor of canceling the purchase contract.” Otherwise, it may have to honor the tens of thousands of orders and potentially go bankrupt.
