When the Seattle Seahawks won the Super Bowl on Sunday, a Houston-based furniture store lost $7 million because of a promotion in which customers were promised refunds on their purchases if the Seahawks won.
Jim McIngvale, the owner of Gallery Furniture, also did not buy insurance for the promotion, so he is taking the direct hit. He said he was still “thrilled” even though the $7 million his company lost represents five percent of his company’s annual revenue. McIngvale said he feels that “losing the money increases the value of the promotion as it further helps his brand break through the clutter and get more media attention.”
As ESPN noted, “Gallery Furniture flipped a coin to determine that the customers would be rooting for the Seahawks while the store would be rooting for the Broncos,” and “anyone who spent more than $6,000 and had their furniture delivered by kickoff Sunday would get a full refund if Seattle won.”
McIngvale said about 1,000 people “bought enough to be eligible for the promotion with an average bill of $7,000,” and one customer “will get $30,000 back as a result of his big purchase.”
“Doing a promotion like this creates affinity, creates trust with the customer, makes you relevant,” he said. “We already have people sending us videos of them jumping up and down celebrating, so I have no doubt that what we will lose is already worth it to our business.”
Customers will have “two “refund parties” on Feb. 9 and Feb. 23 for the lucky customers to get their money back.