December 30, 1999 4:00 AM PST

Holiday e-tail problems claim another victim

Macys.com confirmed that its online distribution system suffered technical problems during the holiday rush, preventing some Internet customers from receiving gifts in time for Christmas.

"There were definitely some glitches as there will be with this many orders and with technology that is still not perfect," Macys.com spokesman Jim Sluzewski said.

The site was among a host of companies that saw their distribution systems overwhelmed during the countdown to Christmas. Stock prices of many e-commerce companies fell this week on news that retailers such as eToys, Toysrus.com and Amazon.com struggled to meet their shipping deadlines--or missed them entirely.

Earlier this month, Toys "R" Us said it encountered a bug in its distribution system that caused the toy retailer to overestimate its ability to ship goods by Dec. 25. As a result, Toysrus.com chief executive John Barbour offered $100 gift certificates to customers wishing to cancel unfulfilled orders. Plus, customers could keep the goods should they arrive after cancellation.

Analysts had long warned e-commerce companies to be mindful of their distribution systems during the latest holiday season. Moreover, they cautioned online executives to maintain their sites, beef up customer service and soften return policies to keep their customers happy--vital steps to long-term growth, analysts said.

Many online retailers, however, suffered site outages and incurred customer complaints about lack of service and late deliveries.

Dimitri Korahais, a Web developer from Virginia, said he ordered three gifts from Macys.com days before Christmas. He said he paid extra to have the items shipped directly to the recipients' homes the next day, an order he confirmed with a Macys.com representative later that day. But on Dec. 25, one of the recipients told him the gift never arrived.

Korahais contacted Macy's via email to find out what happened, but did not get an answer until this week. The company sent him an email that said the item he ordered was out of stock.

Korahais later contacted another Macys.com representative who offered to refund half of his shipping costs.

"Needless to say I'll never be ordering from Macys.com again," Korahais said.

Sluzewski did not reply to Korahais' case specifically. "Our customer service organization is dealing with those issues and working with customers one by one," he said.

 

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