Zappos CEO Tony Hsieh

Online shoe and apparel retailer Zappos, now part of Amazon.com, just made a very costly error. In a blog post, Zappos said a pricing engine mistake at its website 6pm.com capped all items on the site at $49.95 for six hours early Friday morning, resulting in a loss of more than $1.6 million.

That's a big hit for any retailer. Zappos, however, said it would honor all purchases made during the "mess up."

Here's the blog post from Aaron Magness, Zappos director of brand marketing and business development:

Hey everyone – As many of you may know (and I’m sure a lot of you do not), 6pm.com is our sister site. 6pm.com is where brandaholics go for their guilt free daily fix of the brands they crave. Every day, the site highlights discounts on products ranging up to 70% off. Well, this morning, we made a big mistake in our pricing engine that capped everything on the site at $49.95. The mistake started at midnight and went until around 6:00am pst. When we figured out the mistake was happening, we had to shut down the site for a bit until we got the pricing problem fixed.

While we’re sure this was a great deal for customers, it was inadvertent, and we took a big loss (over $1.6 million - ouch) selling so many items so far under cost. However, it was our mistake. We will be honoring all purchases that took place on 6pm.com during our mess up. We apologize to anyone that was confused and/or frustrated during out little hiccup and thank you all for being such great customers. We hope you continue to Shop. Save. Smile. at 6pm.com.

Zappos CEO Tony Hsieh acknowledged the incident today, tweeting: "$1.6 million mistake on sister site @6pm_com. I guess that means no ice cream for me tonight."

Someone called 6PM_Graham, identified as a senior buyer at 6pm.com, tweeted today, "It was a tough day but the team came together." Later, responding to retweets about the pricing error, he wrote, "Lots of good will but have noticed a few convinced it was a hoax. LMAO. I wish."

6pm.com is an increasingly important site for Zappos. Hsieh in a March blog post wrote that 6pm.com is "growing even faster" than the flagship Zappos site and has become "a great way to clear out the older and discontinued inventory that we didn't sell through on Zappos.com."

No word yet on what Amazon — which completed its $1 billion-plus acquisition of Zappos in November — had to say about all this.

Here's more on how the Amazon-Zappos integration is going.

[Hat tip to Silicon Alley Insider]

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