Zappos has dropped two of its signature policies: free guaranteed overnight shipping and a promise to refund 110% of the difference between its price and that of a competing shoe retailer.
“We decided to remove our price protection policy from Zappos because we didn`t feel it was consistent with our goal of making Zappos customer service-focused as opposed to price-focused,” CEO Tony Hsieh wrote on his blog this week. He says most customers who took advantage of the pricing guarantee would have saved more by purchasing more deeply discounted shoes on 6pm.com, the discount shoe site Zappos acquired last year from eBags.com.
“Regarding our decision to stop advertising and promoting free overnight shipping on Zappos, it`s actually simply just that: a decision to stop advertising and promoting it, not a decision to actually stop doing it,” Hsieh wrote. “This means that the vast majority of our customers will still get their orders as quickly as they used to (usually overnight). The only difference is that we made the decision to not advertise or promise it, because we found that our customers were happier when they were surprised by the fast shipping.”
Zappos, No. 31 in the Internet Retailer Top 500 Guide, continues to offer free shipping on purchases and returns on Zappos.com, which also permits returns for up to a year. Free shipping is not offered on 6pm.com and products can only be returned for 30 days.
“6pm.com is for customers that are looking for a large selection of products at deep discounts,” Hsieh said. “By reducing our costs, this means 6pm is able to offer really deep discounts, as much as 75% off. As we continue to add more selection to 6pm, look for even deeper discounts in the future.”
Hsieh’s argument failed to impress one person who added a comment to the blog saying that what made Zappos special was the price guarantee and free overnight shipping combined with outstanding customer service. “Without them,” the post said, “you simply are more expensive.”