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Wednesday, January 11, 2006

Torah, meet the Web: Placing limits on 24/7

By Bob Tedeschi

Story last modified Mon Jan 09 06:21:00 PST 2006

And on the seventh day, online retailers rested. At least some of them.

Consumers have grown to expect around-the-clock pampering from Internet merchants, who have been pushed by rivals to offer customer service even on weekends and to remedy site glitches immediately, no matter when they happen.

But this trend is being bucked by some electronic retailers--many with religiously observant owners and executives who leave their sites up and running on their Sabbath, but do not complete orders, work on the site or otherwise do anything to help customers. And despite an increasingly competitive environment and ever more demanding customers, they say their businesses have not suffered.

"I actually think we've gained," said Shmuel Gniwisch, chief executive of Ice.com, a privately held online jeweler in Montreal. "Customers know if they need something they can wait until Sunday when we're open, and people at the company have the chance to recharge and come back stronger."

Gniwisch, who is also a nonpracticing rabbi, says that the company shuts down completely for 25 hours starting Friday evening before sunset, when the Jewish Sabbath begins. During busy periods, customer service representatives, warehouse workers and some technology employees go back to work on Saturday evening when the Sabbath ends.

When visitors call customer service during Ice.com's day off, they receive a message saying that the company is closed and will return their messages Sunday. Ice.com also responds to e-mail messages on Sunday.

The site has yet to encounter a major breakdown on Friday evenings or Saturdays, but if it does, its technology systems are set to display an error message on the home page, asking customers to return later. Should smaller technological hiccups occur, the company "contacts any customers who were affected and makes sure they're happy," Gniwisch said.

"My customer service managers are always telling me to find a way to stay up on Saturday by outsourcing," he added. "But I think it's more important when the people around you see you practice what you preach. It changes your relationship with your employees."

Shoppers can still browse the site and even order goods from Friday to Saturday evening, but those orders are not processed until Sunday, because Jewish law forbids such business activities on the Sabbath.

Since the company has always followed this policy, it is difficult to say whether it has hurt sales, but Ice.com's revenues do not appear to be suffering. Gniwisch said that the site's sales jumped by 97 percent last year, after 73 percent growth in 2004. (He would not disclose actual revenue.)

Other companies have gone to similar lengths to observe the Jewish Sabbath. Abraham Steinberg, director of online marketing for Adorama, which sells photographic supplies on the Web and in its Manhattan store, said that the company sometimes sold goods through eBay but had to be careful not to schedule auctions to end on the Sabbath, because a transaction technically occurs the moment bidding closes.

Jewish eBay sellers who observe the Sabbath and have eBay stores, Steinberg said, often use "vacation settings" that de-list products on the Sabbath.

One uncharted area for Internet merchants who observe the Jewish Sabbath is online marketing. After all, Google and other shopping engines post advertisements constantly, and they charge the sites each time someone clicks on their ads. Steinberg said that sites typically pay for the ads in aggregate--and not on the Sabbath--but that Jewish scholars had not yet studied the matter thoroughly.

"We had one of the foremost rabbis come to our business and sit here from 3 to 7 p.m., going through our entire sales cycle to determine what's permissible and what isn't," Steinberg said. "There isn't a 'one size fits all' approach."

Followers of other faiths confront similar issues with their online operations. Douglas Phillips, president of the Vision Forum, a catalog and online retailer in San Antonio, is a Christian who says he manages the company "by biblical principles." He forbids employees to work on Sunday and does not allow the site's technology systems to complete orders on Sunday.

"Granted, it's fair to say that a large percentage of our base is Christian-oriented customers, who don't tend to complain you're not open on Sunday," Phillips said, "but we probably do lose some customers because of this."

Still, Phillips said, company sales increased 10 percent last year, to roughly $5.5 million. "Especially in the fourth quarter, when people are cramming to buy things at the last minute, this policy really seems crazy," he said. "But we think that if we honor God on this point, the Lord blesses us."

At the same time, many investors behave differently, knowing that a company may be losing customers to 24/7-minded competitors on the weekends. Gniwisch of Ice.com said he was considering venture capital financing - a move that could put his company on the road toward a public share offering and possibly jeopardize his work-free Sabbath policy.

"When you bring in venture investors the whole situation changes," Gniwisch said. "Depending on the investors, they'd probably allow us to keep things the same. But when you go public, you become much more of a minority and things change."

Gniwisch said that Jewish businesses can operate on the Sabbath if they are also owned by non-Jewish partners, provided the owners follow certain guidelines.

"As long as I own 100 percent of the company, we'll keep to the letter of the law 100 percent," he said. "But as the company grows and new partners join, we'll look at the law again and act based on it."

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