The Top 5 Social Customer Service Fails in Business

Written by on August 22, 2012

For every growing business that seems to “get” the importance of supporting customers on social media, some others make mammoth mistakes. This time we thought we should round up the 5 biggest social media fails, and what every business should learn from it.

Here’s Freshdesk’s list of the Top 5 social customer service fails, in no particular order.


Paypal has been long berated by customers as one of the most insensitive companies around. But they outdid even that reputation when they froze a customer’s accounts because they did not use a particular ‘donate’ button on their site. And what was more, the customer was using it to raise money to buy poor kids gifts on Christmas.

Citing arcane rules and subjective judgement, Paypal made a nuisance of themselves which became a social media nightmare when the customer Regretsy posted the experience on their blog. It promptly went viral, and triggered a vicious backlash that forced Paypal to apologise, unfreeze the account and also offer Regretsy one full year’s free service.

Needless to say, they didn’t use the offer, and Paypal further dented its image in minds of customers.

Key learning
Be nice & evaluate situations thoroughly. It seems like a no-brainer, but when it comes to social media, businesses need to keep it personal.

2. FACEBOOK (yeah, themselves) VS SALMAN RUSHDIE

When Salman Rushdie opened a Facebook account, he probably didn’t realize the extent of the storm he was about to stir up. When Facebook suddenly shut down Rushdie’s account pending confirmation if it really was him , he sent a copy of his passport to prove he was who he said he was.
Which should have been the end of the story. Apparently not.

Facebook wanted Salman to use his first name – Ahmed, as was listed in his passport and not his middle name Salman. Salman protested on Twitter about Facebook’s unfair attempt to make him use a name which he had stopped using. An online firestorm ensued, Facebook backed down and let Salman use the name he wanted to.

What’s in a name, huh, Facebook?

Key learning
Don’t be stuck with T&C’s. Common sense weighs in more than corporate rules.


Two employees at a Domino’s outlet decided it would be cool to post a video of themselves adding certain, um, disgusting ‘extras’ to pizza deliveries. The video was promptly picked up by the web, spread like wildfire and damaged Domino’s reputation heavily. The issue snowballed into a crisis never before experienced by a global brand like Domino’s. Though it was widely acknowledged that they actually did a great job of damage control, they still had to contend with all the lost sales and negative publicity that threatened to undermine a brand built over years. From then on, education about the perils of social media has become paramount among corporations who definitely want to keep their brands away from such a disaster.

Key learning
Social is a culture, not a role. Make sure every last employee has their education, priorities and hashtags right.


The Netflix story will become the classic narrative of how not to move so fast that you end up shooting yourselves in the foot. Technologists still see CEO Reed Hastings’ initiative to divide and charge separately for their streaming and DVD businesses as a sound strategic move. But customers got both for the same deal before, so now they essentially had to pay twice for the same services. The market was just not ready. The move alienated thousands of customers and generated a storm online.
Customers vowed never to use them again. Stock prices plummeted and the media launched a savage attack. What was more, the spun off DVD business, Qwikster, hadn’t gotten hold of the appropriate Twitter handle yet, and the guy in control of the handle let out some racist, hateful messages that further enraged customers, prompting questions if the management was even entirely in control.

Netflix could have avoided all this easily, they were a well loved brand, and had (they still do) a huge following on social networks like Facebook and Twitter. If they wanted to do something so radical, they could have just asked their fans and based their decision on the reaction. And they definitely should have gotten hold of the Qwikster Twitter handle before announcing the spin-off.

Though Netflix went back on its decision and is now rebounding, this is a case study in how not to damage a trusted brand.

Key learning
Don’t alienate your customers. Their tweets and likes got you to where you are, and they can pull you down just as fast.


We included this to make the point that even the best of the best make mistakes. Even someone like Steve Jobs.

When the iPhone 4 was released, several of the users experienced issues with signal reception. When the questions attained critical mass and reached popular blogs and videos on YouTube, Jobs responded with a very simplistic message – “Just don’t hold the phone that way”.

He explained that the signal could be attenuated because of the position of the hands holding the phone, which would affect left handers more. Another solution he gave – buy a case, the prices of which started at $29. Well, everyone knew he was being unreasonable, and this resulted in a minor uproar on the social web.

But this being Steve Jobs, and the product being the iPhone, this was quickly forgotten, along with Jobs’ condescending tone. But even then, the internet never forgot the snub.
So if you’re thinking about pulling a stunt like that, let us give you some sound advice – don ‘t.

The iPhone 4’s sales definitely took a minor beating coz’ of this issue and while Apple can afford to ignore a sales drop, most businesses can’t. So the watchword – be careful.

Key learning
You cannot afford to take chances. There is very little margin for error.

Conclusion & further reading

There you go. Five really easy takeaways from five of the biggest social media disasters. We chose to highlight these specific ones because of the lessons inherent in them.

For further reading, you can check out our Greenpapers on how to use Facebook for Business and Twitter for Business.

What are your takes on these? Or do you have any incidents you would like to share? Please feel free to share your comments.

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