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Razer/FacebookRazer CEO Min-Liang Tan holds the Razer Edge. It’s a story we’ve heard before: A retailer posts a coupon or markdown that seems too good to be true, then quickly pulls it when it realizes its mistake.
Usually, the story ends with the retailer announcing that it won’t honor the erroneous coupon, and voiding the transactions of any customers who managed to snag those once-in-a-lifetime deals. But one video game company bucked that trend by agreeing to honor an incredible 90%-off coupon code that was mistakenly circulated earlier this week.
Razer is an online retailer of video game hardware peripherals like controllers, keyboards and headphones. The coupon code, which spread rapidly in social media, was good on purchases at its U.K. Razerzone site. Razer quickly moved to disable the code, but not before many eager gamers snatched up heavily discounted hardware.
On Friday, Razer CEO Min-Liang Tan took to Facebook to explain that the code was accidentally made active by a third party that was attempting to test the website’s shopping cart. Nevertheless, he went on to announce that the company would honor the code for customers who bought “single products for their own use.” That means that opportunists who used the code to buy large amounts of merchandise with the intention of reselling it on eBay and elsewhere may yet have their orders voided. Still, it’s an incredibly consumer-friendly move by Razer, especially when you consider how much money honoring the transactions with cost. The CEO said in his statement that “thousands of orders” were placed in a matter of hours, resulting in “an insane amount of losses.”
And Razer would be well within its rights to void those orders. A couple years ago, for instance, the Sears (SHLD) website accidentally offered the iPad 2 for $69, but quickly took the down the offer and canceled the orders of anyone who had purchase it at that price. More recently, Best Buy (BBY) forgot to exclude gift cards from a 50%-off coupon, resulting in many customers snatching up Amazon gift cards at half-price. It soon realized its mistake and replaced it with a revised coupon.
Razer could have gone the same route and saved itself a lot of money, but the consumer-friendly move is winning the company plaudits on blogs and in social media. No doubt the company hopes that the long-term PR benefits balance out the revenue losses it incurred this week. But even if its choice was based solely on business considerations, it’s still a classy move.