Gully Labs: Startup of Shark Tank India fame loses ₹2 lakh after new hire executes fraudulent orders
Gully Labs Co-Founder Arjun Singh shares how the sneaker brand lost ₹2 lakh in a week. He placed the blame on a customer service executive who allegedly damaged the company through fraudulent orders.
“We hired a CS employee a few months ago. Paid INR 2L from 100% discounted orders within first week of joining – sent to friends and quit within a week,” Singh wrote on Twitter (now X).
Singh’s post referred to an observation by Akshay G Jain, founder of Ludhiana-based D2C fashion brand Mlada.
“As brands grow, they face new challenges. I never thought I would need to protect customer details, place export orders from people in the same organization due to security concerns. It adds complexity, but there is no other option,” Jain wrote.
It seems what happened
The customer service employee allegedly used a simple but clever method. Founded in 2023, the startup sells sneakers priced between 2023 and 2023. ₹4,000 and ₹8,000 per couple. Customer service staff are allowed to offer limited discounts of 10-20% through the company’s backend system.
This employee gained access to the admin panel and created special 100% discount codes. These codes allowed the system to show that some orders had been paid in full when no money had actually been received. He then allegedly used these codes to place orders for himself, his friends and family.
Because the system marked the orders as paid, the warehouse shipped the sneakers without leaving any room for doubt. In total, goods worth approx. ₹2 lakhs were sent without payment.
Within its first week, the employee who allegedly perpetrated this scam reportedly resigned and disappeared.
company action
Arjun Singh also shared what the company did after identifying the issue.
“When he got caught, he initially decided to cooperate and returned half the shoes, but the other half were used etc. He then started sending legal notices that we were harassing him in response to our notice to return the items or give us a refund!” Singh wrote.
“We now enable permissions in the backend, etc., among other things,” he added.
Social media reactions
Entrepreneur Prashant Pansare also shared a similar experience: “When we became really successful with intangible products and services, we hired CS to interact to collect data and payments. After learning for a few months, this guy collaborated with his friends to clone the web page to offer competing services.”
He further wrote, “He was collecting phone numbers and asking customers to selectively pay to the other page every day. He was siphoning off more than one lakh.”
“I had to lock him up and take other measures to recover. A story for another day. The lesson is to keep guardrails in place and stay alert. Never trust anyone ‘blindly’,” he added.
Another user wrote: “This is why early stage trust culture is dying fast. The cost of a bad hire ₹2L + legal fees + you are now implementing enterprise level access controls with 10 employees.”
Another user said, “You won’t believe it, but this is how Jabong closed down. They used to have fixed 30% unlimited employee discount codes and all their employees were using these discount codes to sell to the whole family, friends, friends of friends and cause irreparable damage to the company.”
Another person said, “Dude! This is a terrible story. I’m glad he was caught. I wish sometimes things like this were shared on the person’s profile.”
Shark Tank India
Gully Labs, founded by Arjun Singh and Animesh Mishra, appeared on Season 5 of Shark Tank India and bagged a huge deal. Aman Gupta invested in the sneaker brand at the following valuation: ₹175 crore.
