Kogan to honour discounted goods purchased during online glitch

Online tech entrepreneur Ruslan Kogan has said he will honour discounted goods that appeared on his website due to a glitch, allowing browsers to buy certain items at below cost.

The announcement differs from the approach usually taken by online retailers during glitches, which usually restore items back to their full price and offer customers the opportunity to cancel their orders. Such a mistake was encountered by Dick Smith New Zealand only last month.

Kogan says the glitch was the company’s responsibility, and it will need to endure the cost of nearly $50,000 in order to keep customer satisfaction high.

“During the time of the glitch people were buying products for far below cost, so they were getting a significant deal as for us the price was less than even in the delivery charges.”

“We’ve lost quite a bit of money through the whole thing, but we’ve copped it on the chin and we have to take responsibility.”

The specific glitch allowed customers using PayPal to take advantage of a $30 voucher usable across the entire site’s range of products instead of one item. As Kogan already offers cheap alternatives for products such as televisions, but also for cheaper items such as set-top boxes, some products came in under $10.

While such glitches have occurred for years, they are becoming more widespread now as social media allows users to share news much quicker than ever before. This discount in particular was made known through the OzBargain website.

Several online retailers have suffered this, with Dick Smith in New Zealand last month experiencing a similar problem. Dell has suffered a similar problem in the past, although both companies did not honour the glitches.

Kogan says he chose to take the unusual position “because the last thing we want or can afford is an upset customer”.

“Those customers who are upset end up costing a lot more in the long run than what honouring these deals will cost us. We really just have to take responsibility for our actions.”

“Our terms and conditions could have led us out of it, but in the longer-term I’m sure we’ll benefit based on the reaction.”