Peloton Buyers Demand Refunds Amid Logistical Nightmare

Despite a growing market and rising profits, logistical blunders are causing customers to turn on luxury exercise machine company Peloton (PTON). With shipping dates months out and frequently canceled the night before, thousands have joined groups sharing their frustration, canceling their orders and recommending competitors, the Wall Street Journal reported.

The pandemic has been a boon to Peloton, with Americans quarantining and seeking guided in-house exercise Peloton’s machines and services offer. Its latest report is expected to confirm a third-straight quarter of profits, accompanied by its share price soaring.

That deluge of customers, however, has meant new arrivals have to wait for months before their machines arrive as Peloton struggled to scale up its operation. Stories abound of frequent cancellations hours before delivery, the new date adjusted to months further out.

“They are taking our money, not delivering a bike and then continuing to sell and deliver new bikes to new customers,” Laurie Donnelly, who experienced exactly that cycle of cancellations and adjustments, told the Journal.

Spurred by pleased consumers getting their bikes before them, clients like Donnelly have gathered online to share stories and recommend alternatives. One group has over 10,000 members on Facebook. The organizer of a similar club, Amie Stier, says she started it after looking for answers around her own delayed order.

“They’ve got a great thing to offer, but I don’t appreciate how they’re treating a good chunk of their members,” Stier said.

Like many others, she returned hers and put in a new order from a competitor. Some customers pay in installments, and wind up sending money to Peloton for months with no product in sight. Peloton says it offers refunds and admits it's been having difficulty filling orders.

“Rapidly scaling a business during a global pandemic is difficult,” Peloton Chief Executive John Foley said.

Peloton’s apologies may not be enough. When enough consumers are affected to start forming large groups and registering over a thousand complaints to the Better Business Bureau, Peloton’s growing competitors start to look like more of a threat.

“Before Covid, there were no large competitors that were largely funded, now there are more rivals that have raised meaningful amounts of capital,” BMO analyst Simeon Siegel told the Journal. “It’s one thing to not have the units, but to have such a mismatch on deliveries is what’s triggering so much of the frustration. It’s a classic indication of a company that grew quicker than its infrastructure.”