Mattress Mack Refunds More Than $7 Million to Customers for Lost "Super Bowl Bet" Promotion
The front page of the Gallery Furniture website Monday morning.
This wager involved folks who were willing to spend $6,000 or more before 5 p.m. Sunday at Gallery Furniture stores. If they did and Seattle won (which, of course, it did), he would refund the money to those customers. According to reports, more than 1,100 people did and it cost the furniture store owner $7 million.
One might think this is a huge loss for Gallery Furniture, but this is a company that makes well over $100 million per year in annual revenue and is one of the most successful independent businesses in America, according to Businesseweek.com. Try to imagine for a moment if 110 people in the span of a week were willing to drop $6,000 each on recliners, theater seating and mattresses (all without the frustrating "back, back, back order slip"), hundreds of additional customers no doubt spent under the mark required for the bet.
Let's be clear, Mack is no dummy. To some, he might appear to be crazy, but the guy is a marketing genius and this was yet another example of how he used a holiday or sporting event to bring customers in the front door. And it isn't like he handed them cash. The markup on his furniture probably runs anywhere from 50 to 200 percent or more depending on what it is. Even though he refunded $7 million, this did not cost him that much, and, more important, he brought in customers who will no doubt become repeat business for his stores.
Additionally, he turned a time where shopping is traditionally slower post-holidays into a sizable chunk of revenue. Not so crazy after all.