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What’s a small company to do when it makes a very big mistake?

If you’re the premium skin care company California Baby, you cancel every single online order made over a four-day period – a nuclear option that’s preferable to bankrupting the company – after a major coupon oops.

California Baby recently began offering a referral program for dedicated customers, as a way to help them “earn discounts”. One of those discounts was a coupon code for $75 off a $75 purchase. But the coupon code wasn’t unique, wasn’t single-use – so, because the internet exists, it was shared online. And shared, and shared, and shared.

While the folks at California Baby enjoyed their summer weekend in blissful inattentiveness, their website was flooded with orders from shoppers who thought they had hit the jackpot. Some were the opportunistic types who pounce on an obvious “glitch” any time they see one, others legitimately seemed to think it was some kind of sale. Either way, countless orders were placed from Friday through this past Monday, from shoppers who awaited their $75 worth of freebies.

But those freebies won’t be coming. “It has come to our attention that there was a significant glitch in our system that resulted in invalid orders using a single use code that was tied to our Referral Program,” founder and CEO Jessica Iclisoy posted on the company’s website and social media pages. “As a result, we have had to cancel all orders that were placed from Friday 7/19 through Monday 7/22.”

That’s all orders – not just those that were deemed “invalid”.

“We did not know the private code was being distributed illegitimately,” Iclisoy said in response to a customer comment.

The coupon code was TEDDYWTB48. Not a long string of random numbers and letters that was coded as a single-use coupon, but one that was easily shareable and reusable. Referral program members aren’t supposed to share the code with the entire internet – but that’s putting a lot of faith in hoping members won’t be able to resist sharing a deal.

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California Baby is far from the first company to fall victim to a “private” coupon code going viral. Marc Mezzacca, founder of the coupon code site CouponFollow, has seen this kind of thing plenty of times before.

“We’ve seen coupon misuse scenarios happen fairly often over the years. Often the retailer gets upset because of a coupon being redeemed in a manner they didn’t expect, or beyond the expiration date they had in mind,” Mezzacca told Coupons in the News. “This situation can easily be avoided by properly setting coupon usage amounts or limitations… such as the total number of redemptions allowed, or even to tie the code to a specific user account or email.”

In the end, “it’s silly to think that codes won’t be leaked or shared, especially with the amount of chatter on social media,” Mezzacca said. “Having a specific coupon strategy in place and someone charged with managing it can help avoid issues leading to consumer confusion.”

Mistakes do happen. But some angry shoppers aren’t ready to let the company off the hook. “The company should honor their mistake, it was not OUR fault as customers,” one Facebook commenter wrote. “Technically the code was not invalid since it was accepted. Not the customers’ fault that your system allowed the glitch,” another wrote.

Other fans are defending the company against “greedy” shoppers who are upset they couldn’t get something for nothing. “Wonder if all these people expecting this company to honor the website mistake would be feeling the same if they owned a business and made a similar mistake?” one commenter wrote. “What a bunch of entitled individuals without a moral compass. Taking advantage of a glitch is the same as stealing from a store during a riot. You had to know it was not right yet you did it anyway, then want to blame the company,” another added.

While the company didn’t go so far as to blame shoppers for the situation, it didn’t exactly accept blame either. So some simply wished the company would own up to its own mistake. “This was the worst non-apology,” one commenter wrote. “The way this has been handled is a great lesson for anyone in how NOT to handle a mistake like this… you couldn’t get yourself to just own it and apologize.”

After scrambling to cancel orders and issue refunds, the company is now offering a consolation prize in the form of some free samples and a “legitimate” coupon code for 10% off, plus an invitation to join the California Baby referral program for the chance to earn a “legitimate” $75 coupon code in the future. “Our referral program is really fantastic and one of the best ways to earn free products, discounts, etc.,” Iclisoy said.

You can say that again.

If there’s one silver lining in this cloud, it can be summed up in one shopper’s comment: “Never heard of this company until this glitch happened.”

So even at the risk of angering some customers by trying to undo a potentially very expensive mistake – it seems there may be no such thing as bad publicity.

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