Nordstrom is refunding $72 million to customers it overcharged
Nordstrom admitted to a multi-million dollar mistake, and investors unnerved.
During its third-quarter earnings call Thursday, Nordstrom said it had to refund $72 million to some credit card users because it accidentally charged them a higher interest rate. The admission sparked a sell-off Friday, sending the stock down more than 12%.
The incident affected roughly 4% of Nordstrom cardholders. Most customers will receive fewer than $100 in refunds.
“We have taken action, including the appropriate steps to ensure the problem is addressed and does not happen again. We sincerely apologize to these cardholders,” co-president Blake Nordstrom said in prepared remarks.
Nordstrom’s quarterly profit fell 42% because of the credit card refunds. The company said if it wasn’t for the screw-up, its earnings would have been “slightly ahead” of its expectations. Sales grew 3%.
The Seattle-based company’s recent shift into digital is still paying off. Digital sales grew 20% year-to-date and its website now makes up 30% of its overall business.