Because the company gained
- Free web-advertising of hits from Tian's blog and mine (and probably others). Mine is less than 1000 hits a day but Tian's is believed to be much larger. I don't know what the typical hit-click conversion rate is, but each click-through worth from $0.1-$5(or more) if you advertise in google, multiply that.
- Free brand (positive) recognition through word-of-the-mouth and viral promotion, strengthened by testimony from unbiased third-party. (I do not use baakpacks and have not heard of this Camelbak brand until today)
- At least one happy (and definitly returning) customer
- Saving the company a few hours of customer service (CSR costs at least $10-15/hour in labor, and there are office costs)
- Prevented potential damage to brand and unfavorable customer review if there is mistake in handling the situation
- marignal cost of a backpak which is typically 15-25% of the retail price minus what Tian paid ($10). For a full price of $70, this is estimated to be about $10.5-17.5-$10 = $0.5-7.5