They Did What? 5 Customer Service Disasters!

By Chad Brooks

Customer Service Gone Wrong

Everyone knows that great customer service is what makes the best companies stand out from the rest. But, not all customer service plans are created equally. Here are a few notable customer service tactics that fell short of.

L.L. Bean

One of the earliest marketing failures belongs to outdoor apparel company L.L. Bean.

An avid outdoorsman, founder Leon Leonwood Bean began selling workmen's rubber boots in 1912 out of the basement in his brother's apparel shop. During his initial round of marketing, Bean offered a money-back guarantee to anyone not satisfied with the boots. Of the first 100 orders, 90 were returned after the leather tops separated from the rubber soles.

Refunding the money nearly drove Bean out of business.

He quickly learned from his mistake, however, and corrected the problems. Today, a century after first opening, the mail-order company has grown to more than $1.4 billion in annual sales.

Blockbuster Video

A Blockbuster Video campaign hyping "no late fees" eventually ended in the company's bankruptcy.

In a move to compete with the growing Netflix, the video rental giant announced in 2005 that it was rescinding its long-despised late fees. In reality, the late fees remained, since movies not returned by a certain date meant the renter was charged for the entire cost of the film. When the movies were eventually returned, the customer was refunded the money, minus a $10 restocking fee.

The campaign consequently was investigated in 48 states, and Blockbuster was eventually forced to reimburse the states more than $600,000 for the costs of the investigations.

It was beginning of the end for Blockbuster. The company not only reinstituted its late fee policy in 2010, it also filed for Chapter 11 bankruptcy and closed more than 500 locations.

W.T. Grant

After a highly profitable 70-year run as one of the country's largest retailers, the W.T. Grant variety store empire came toppling down when it started giving its customers a little too much credit.

Looking for a quick way to boost sales, executives at the company began issuing credit cards to anyone and everyone, regardless of the customer's credit history.

W.T. Grant was so eager to issue its cards that store managers and clerks were offered $1 for each customer they were able to sign up. In addition, store managers who failed to meet their quota of new credit customers suffered public humiliation in the form of having to eat beans instead of steak at a promotion dinner, having their tie cut off, getting a pie in the face or having to wear a diaper.

Needless to say, the effort ended terribly for the company, which racked up $800 million worth of bad debts before finally collapsing in 1977.

Gasp

While most companies try to avoid embarrassing customer service missteps, one incident actually left an Australian clothier gloating.

Last September, a Gasp salesperson insulted a customer as she shopped the store for a bridesmaid dress. After helping the customer, Keara O'Neil, find a dress, the salesperson began mocking her weight when she decided against purchasing it.

O'Neil later wrote an email to the store's management about the rude service – and rather than offer an apology, Gasp Area Manager Matthew Chidgey responded with a return email that praised the salesperson and further insulted O'Neil.

In the email exchange, Chidgey wrote, "If you would like to do us any favors, please do not waste our retail staff's time, because as you have already seen, they will not tolerate it. I am sure there are plenty of shops that appease your taste, so I respectfully ask that you side step our store during future window-shopping expeditions."

Even when the email went viral, the company refused to back down, going so far as to ban O'Neil from its stores.

"Notwithstanding (O'Neil's) ill intentions, our business has experienced unprecedented sales volume, and we would like to thank you for all your assistance in helping to achieve this," Chidgey wrote in an email to a local newspaper. "To all the rude and obnoxious clowns, we respectfully ask that you get out and stay out, we don't want you or your business."

Best Buy

If there is one time of year to not disappoint your customers, it is over Christmas, as Best Buy found out last year.

Shoppers who thought they were ahead of the game by ordering presents online from the electronic retailer over Black Friday weekend were alerted just days before Christmas that their gifts were out of stock and would not, in fact, be arriving in time for the holiday.

Unhappy customers took their complaints online, saying they'd never again shop with the retailer and comparing Best Buy to the Grinch Who Stole Christmas.

Best Buy attributed the canceled orders to an overwhelming demand of hot product offerings.

Susan Busch, senior director of Best Buy’s public relations, told the New York Times the problem was that there was an unacceptable delay between order confirmations and cancellation notices once it was determined the products were out of stock.

"It’s important to note that this was a rare situation based on a high volume of orders over a short period of time," Busch said, adding Best Buy was giving electronic gift cards to affected customers as a goodwill gesture to apologize for the mistake.