. In 1992 The Hoover Company offered free flight tickets on the purchase of more than £100 of its product but the offer cost the company almost £50,000,000 after a huge response from customers who were more interested in availing the free flight offer than buying the Hoover products.

In the 1990s the British division of The Hoover Company was having a surplus of washing machines and vacuum cleaners sitting in their warehouse gathering dust. In order to sell them, Hoover began a marketing promotion in August 1992. According to the Hoover free flight promotion, a purchase of £100 of Hoovers products would make them eligible for two round -trip tickets to Europe. Later the destination of flights was expanded and included the USA. The actual cost of the same flight was several times more than £100. So, it was a very cheap bargain.

Soon hundreds of people flocked to Hoover’s stores to take advantage of the offer. Hoover never anticipated such huge response and was overwhelmed by the demand due to which it could not keep its promise. This made the customers sit up and take notice and soon Hoover entered into their bad book. Later an undercover research Journalist from BBC secretly investigated and filmed the loopholes. Armed with evidence BBC created a documentary “Hoover Flight Fiasco” and aired it. The documentary led to the sacking of a number of top Hoover executives and a loss of £50 million to the company.

2. Red Lobster lost $500,000 each week during a 7-week all-you-can-eat promotion in 2003. As a result of underestimating the American appetite, each restaurant started losing money on the third plate of crab legs served.

In 2003 the sea food chain Red Lobster launched its new all-you-can-eat promotion under the direction of the former head, Edna Morris. As per the promotion, the Red Lobster offered an unlimited supply of snow crab legs for a payment of $20. Along with the crab legs, they also offered an array of side dishes. For the seafood lovers, it was a godsend deal.

When the executives of Red Lobster rolled out this deal they believed that people won’t eat more than three plates of crabs. Their underestimation soon came into view as people sat for hours ordering plate after plate of crab legs. At the same time, the price of crab started increasing as the US government capped a number of crabs hauled from the ocean. Soon the seafood chain started piling up huge losses. In the end, the seven-week promotion left the company with a net loss of $3.3 million.

3. In 1981, American Airlines offered unlimited first-class tickets for a one-time fee of $250,000. One of the first-class ticket holders flew over 10,000 flights costing the company $21,000,000.