The bizarre world of Patrick Byrne's Overstock

A CEO Apart

Come on. It isn't really that bad

And we're not alone.

Looking over various customer feedback boards, it seems that Overstock actually received pretty high ratings a couple of years back. Buyers often gave it five stars for service, price and delivery times.

Recently, however, things appear to have taken a drastic turn for the worse.

Have a look at this board, for example, where one star is the most common rating for the company.

"Initially Overstock was decent, but I've been shopping with them for more than a year now, and their service has lessened to a disproportionate disregard which warrants dismissal!," writes one customer. "Cannot reach them by phone and their email responses to my customer queries such as providing assembly instructions for assembling a piece of furniture, and replacing missing pieces of that same order have verged from infuriatingly rote to completely disinterested!! STAY AWAY FROM THIS COMPANY!"

"I preordered a book from them last month," writes another. "Uptil now... nothing has arrived. I called (4 times), email (2 times) and chat (2 times). Everytime I got different info about my item. All of info i got from customer service is lie. Terrible customer service... Big Liar. NEVER ORDER ANYTHING FROM THEM AGAIN!!!"

"The customer service department is utterly useless," writes another customer. I purchased a watch about 6 weeks ago; it arrived defective, just plain doesn't work. I have been trying to return it, but Overstock contuiously fails to follow through on their 'guarantee' to send me the return shipping labels. After multiple emails and phone calls, I continue to receive the same form letters, about how sorry they are for the inconvenience. Well apologies don't mean a thing if they're not followed through with results."

"Customer service NIGHTMARE," writes another. "They're beyond pathetic. I'll never buy from them again. STAY AWAY FROM THEM!!!!"

Time and again, Overstock customers complain about not being able to track their orders, only receiving partial orders and having trouble connecting with customer service representatives. During its most recent earnings call, Overstock admitted that a large technology problem had made it impossible to track orders. And later representatives confirmed to us that the company's phone lines were malfunctioning.

So, we posed a simple question to the company. Have you noticed an influx in complaints since the technology glitch occurred?

For two weeks, we called and e-mailed Overstock's PR man Scott Blevins, seeking an answer to this question. We received no reply. Blevins seems to have trained at the same academy as the customer service representatives.

Blevins did, however, have this to say.

"I can't speak to issues you've had at Overstock because you won't provide an order or account number. If you would, I will make it right."

It's always nice to see a company offer to help a poor journalist out. If only all customers could receive such service.

After much pressing, we finally got to CEO Byrne who said there was "no" influx in complaints following Overstock's IT disasters. We can't see how that's possible since message boards are littered with gripes from people not able to track their packages or find customer service representatives, but Byrne is sticking by his story.

Overstock informed us that the only accurate measure of customer satisfaction is the annual American Customer Satisfaction Index (ACSI) - a survey done by the University of Michigan Business School, the American Society for Quality (ASQ), and the international consulting firm, CFI Group.

In May of 2004, Overstock issued this release stating that it finished fourth among US retailers in the ACSI survey with a score of 81. That's the only ACSI-related data Overstock has ever released. We went hunting for more.

The ACSI study Overstock cites tracked consumers in 2003. The study the next year showed that Overstock had dropped to 6th place with a score of 77. It fell behind Barnes and Noble, Amazon, eBay, Buy.com and 1-800 Flowers. The only sites Overstock beat out were the travel sites such as Expedia and Orbitz that rounded out the top ten. Overstock didn't issue a press release about this score, and we wouldn't either. Out of the top ten companies, it suffered the most significant year-over-year drop in customer satisfaction.

Now to the good stuff.

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