How Robinhood handled a crisis

February 1, 2021

Last week Robinhood took unprecedented action and, without warning, temporarily restricted trading on immensely popular stocks like GameStop (GME).

The circumstances of these actions were controversial and upset millions of people.

But this isn’t a hit piece, and my opinion of whether the steps Robinhood took were necessary, fair or illegal are irrelevant.

Instead, this provides a perfect example of why UX matters in a crisis

In this instance, even the best user experience wouldn’t have stopped people from being upset, but would have acted as damage limitation.

As you’ll see, the total lack of context, explanation or empathy only fuelled the mob.

So what can we learn from Robinhood’s actions / inactions?

Summary (what Robinhood did):

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Removing GameStop from search results.

Blocking people from buying GameStop shares.

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Made fractional shares unavailable.

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Creating sell orders on your behalf.

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Failing to get statements.

5 key takeaways

1. Removing GameStop from search results

The first action that Robinhood took was to suddenly stop people from being able to purchase shares of GameStop.

But they also decided to actually remove GameStop from any search results.

This was an awful decision for a few reasons:

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1. Adds ambiguity

People knew that GameStop should be there, so just removing it creates ambiguity. Is this a bug? Should they close the app and try again?

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2. Provides no explanation

By removing it entirely, you’ve not given any chance for the user to learn more about why they’re not seeing it.

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3. Adds suspicion

During a crisis, you want to calm your users down, not give them reasons to suspect you’re trying to mislead them.

But it didn’t have to be that way—this is what they should have done (right).

Great UX is about being definitive and clear. The absence of information is the opposite of that.

How long would it have taken Robinhood to add a few sentences, and a link to an additional resource? 15 minutes?

And if they didn’t have time to write a full article explaining the situation, then they could have linked directly to a Twitter thread. Or, literally anything giving some context about this decision.

2. Blocking people from buying GameStop shares

But, even though GameStop shares were hidden from the search results, it was still possible to get to the screen where you can normally buy and sell them.

Which introduced another complexity: how should Robinhood stop people from buying the shares, while still allowing them to sell their shares?

What they did was:

1: Disable the ‘buy’ button.

2: Add an unspecific notice explaining that you can’t buy shares right now.

Robinhood’s users were missing out on what was being touted as the trade of a lifetime, and there’s not even an explanation why.

It wouldn’t have taken much to make the UX of this considerably better. Even just a link to an explanation would have helped.

3. Fractional shares are unavailable

After some time, Robinhood announced that they would allow people to purchase a limited number of these shares, this included not allowing people to purchase part of a share.

For context, Robinhood is renown for fractional investing. This allows you to invest a small amount of money in companies with a high share price, for example, one share of Amazon costs more than $3,000, but a Robinhood user could invest $300 for 1/10th of a share.

This is the message they showed to people who tried buying a fraction of a share:

There are a few nuances here worth pointing out:

1. Clarify that this restriction is temporary

Is Robinhood not facilitating fractional shares anymore? Will this feature come back? Is this related to the other restrictions?

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2. Explain what “enough available” means

During this crisis there were many restrictions, including not being able to buy more than 3 shares. So is “not enough” related to the number of available shares you can buy until you reach that limit?

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3. Add an explanation

As we’ve demonstrated before, it’s important to give context and rationale behind a decision. Why did they have to take this step?

4. Creating sell orders on your behalf

As the chaos unfolded, people started complaining that Robinhood were creating sell orders on their account, without their consent. Once these orders were placed, the user could not cancel them, and were instead shown an error message.

If this wasn’t bad enough, many people were complaining that the selling price was below market value, given how volatile the price was.

So, if there was ever an example of where a company needs to take an extra 5 minutes to really explain the situation, this is it.

Yet instead, Robinhood users saw an error message—and to demonstrate how rushed this entire process was, they forgot to put a full stop at the end.

I’ve made a few important changes here:

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1. Change the title

This isn’t an ‘error’, so labelling it as one feels misleading. Instead, be clear and tell the user what’s happening.

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2. Adding empathy

This isn’t just an inconvenience, it’s potentially costing the user a lot of money. Somehow, saying “we’re sorry” at the beginning just doesn’t cut it.

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3. Add an explanation

You probably saw this one coming—this is a necessity in this instance, and it’s easy to see why many people flocked to Twitter to complain.

5. Failing to get statements

This controversy unravelled over a few days, and led many people vowing to leave Robinhood and take their portfolio elsewhere.

But there was a problem: other brokerages were asking for your existing portfolio statement to initiate a transfer, and for some people, Robinhood’s statement download function was broken.

So lets look at—and improve—the error message they displayed when people were trying to download their statements:

Unlike the other examples above, this error message doesn’t require more context, but it would have benefitted from suggesting an alternative step (e.g., emailing their customer support).

This is a task that could be completed manually, and may be urgent. To simply fail is not good enough.

Or rather, imagine how frustrated you’d be if your bank’s app was broken and you couldn’t make any payments. You’d appreciate a suggestion of: “call us on [this number] to make a payment over the phone“.

Conclusion

One thing is certain: Robinhood were scrambling to react to these spontaneous decisions, and the execution was poor.

But the rush to push changes is not a valid excuse for a poor experience. In fact, it just fuelled the fire—probably contributing to the hundreds of thousands of 1-star ratings on the app stores, and Robinhood trending on Twitter.

It’s in moments like this, more than ever, that a thoughtful and empathetic user experience is required.

So let’s summarise the key points here:

1: Context matters — take those extra few minutes to explain to your users why you’ve made a difficult decision.

2: Remove ambiguity  — give people realistic expectations for when certain restrictions will be lifted, and what they can do in the meantime.

3: Show empathy  — apologising isn’t enough, you need to demonstrate that you understand why your users will be suffering, and how hard it is for them.

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