Newly Caught High-Tech: An example of an E-commerce failure and its causes.

Nowadays, there are many successful e-commerce businesses in the world such as Google, Amazon.com and E-bay. But, there are also have a lot e-commerce failure such as Webvan, Pets.com, eToys.com and Flooz.com. Flooz.com is one of the top ten dot com flops, which is based in New York City. Flooz.com went online in February 1999, started by Robert Levitan and hired Whoopi Goldberg as a spokesperson.

Flooz.com was an online currency that would serve as an alternative to credit cards. After buying a certain amount of “flooz” money, user could then use it at a number of retail partners. By the period of incorporation of Flooz.com, it managed to raise a staggering amount of $35 million from investors. Flooz.com went bankrupt in 26th August 2001 and the unused “flooz” money becomes worthless and un-refundable.

Flooz.com became failure because of credit card fraud. Flooz.com had unknowingly sold $300,000 of its “flooz” currency over the last three months to a group of credit card thieves in Russia and the Philippines and used to purchase goods at online stores that accept the “flooz” money as payment.

Consumers are losing their money when the “flooz” money becomes worthless during dot.com recession is one of the reasons of the failure of Flooz.com. When Flooz.com informed them that their Web site operations had been suspended in early of August, the merchants stopped accepting the currency.

Although Flooz account number is similar to a credit card number and can be used to pay for purchases of goods. But “flooz” money only can be used at selected stores and this will limit the use of “flooz” money.

The merchants that subscribe to Flooz.com are mostly high-end stores with very little offer to the thrifty shopper. Besides that their merchants listed cost much more than many of the online sites offering the same products.

Some causes of Flooz.com failure is lacking in their customer service department. There is a severe lack of communication on the part of the staff as well as between the Flooz Company and their online partners.

Another factor that contributed to the failure of Flooz.com is that the company was facing financial problem. The company began struggling in the earliest of 2001 after its biggest clients, which had formerly bought “flooz” money to use as awards in employee incentive are cuts in spending.