Zappos sister site zapped by pricing glitch

Online retailer loses more than $1.6 million after accidentally capping prices for all products on its site at $49.95, a Zappos executive says.

A sister site of online retailer fumbled more than $1.6 million in the wee hours of Friday morning when a pricing-engine blip inadvertently made every product on that site available for no more than $49.95. logo

Aaron Magness, director of brand marketing and business development for Zappos Development, said in a blog post that would be honoring purchases made during the glitch, which, he said, took place between midnight and 6 a.m. PT that day.

Touting itself as a bargain retailer of brand name products, features, among other things, a GPS device that sells for nearly $2,000 and a pair of Bruno Magli boots that go for more than $400.

Zappos CEO Tony Hsieh later tweeted the mishap, directing readers to Magness' blog post. Hsieh and Zappos have become renowned for heavy investment in customer service and the use of Twitter to promote corporate transparency.

Hsieh also has a book, "Delivering Happiness," coming out soon--so this million-dollar computer mishap, and Hsieh's response, could evolve into a savvy marketing event. agreed to a stock takeover of Zappos in July 2009.

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