Treatment of Obvious Price Error

spare13 on 02/09/2016 - 14:17

I have noticed that often in response to an obvious price error, ozbargainers appear angry when the price error is not honoured.

In any line of work, errors are made. Price errors happen. And at the end of the day it is as the company's discretion how they are handled. If they chose to honour the price error they can, provide a voucher, or simply cancel orders. It is at their discretion and I do not believe that it is fair to expect a voucher, because you capitalised on an obvious price error.

Some examples:

Amazon
Harvey Norman

The Amazon deal was ~half of any previous price.

The Harvey Norman deal was $43 vs $399 for a grey import of the lens on its own.

At the end of the day, the contract of sale in some form or other (not a lawyer) allows for the company to only having created a contractual obligation on delivery of goods. That is my understanding.

So, why is there this attitude of an expectation of an obvious price error to be honoured?

General Discussion

Comments

  • spare13 on 02/09/2016 - 14:17

    Before anyone jumps to conclusions. I work at a HN store. But this post has nothing to do with HN specifically, just an example from today. This is across many stores.

  • retiredfeline on 02/09/2016 - 14:26
    +8

    Too much emotional investment to back down.

    • montorola on 02/09/2016 - 22:55
      +3

      This.

      I personally find it good entertainment watching people flip and rage lol

  • hellbound on 02/09/2016 - 14:37
    +9

    Certain retailers are notorious for frequently doing this, and attempting to engage in bait-n-switch practices.
    Small stores I can understand making the occasional mistake, but large retailers should have proper change management practices in place to prevent this from occurring, yet it's a common occurrence.

    It isn't always easy to tell between a price error and a legitimate clearance sale ($9 printers anyone), and if the retailer has any credibility it should be a safe assumption it's the latter.

    • spare13 on 02/09/2016 - 14:49

      Mmm. That's a good point. It shouldn't happen. But in the times it does happen, what should behaviour look like?

    • [Deactivated] on 02/09/2016 - 15:25
      +3

      attempting to engage in bait-n-switch practices

      This is now illegal to do under the ACL, regardless of the fact the business is small, medium or large. If you see this happening, you should immediately report this to consumer affairs.

      Under Section 35(1)(a) of the ACL, business'/people must not advertise goods at a price which they are not able to offer or supply

      • hellbound on 02/09/2016 - 15:47
        +1

        Yes, ozbargainers in the past have raised examples of this to the ACCC/FTO, with DSE at least their standard response was "once off price error, since corrected" and the case has been closed.

      • BigTed on 02/09/2016 - 16:24

        It's been illegal for decades but, like statutory warranties, enforcement is an issue - particularly for normal consumers.

  • DaneD on 02/09/2016 - 14:55

    Actually this is known as an 'invitation to treat' in legal terms and is not actually a contract (as at that point in time nothing has been purchased). But read the following.

    Where a seller advertises an item at the incorrect price or a price that’s lower than the in-store price, it is required under Australian Consumer Law to honour the advertised price until such time as the error has been corrected. Generally, for a correction to be valid it must be notified to customers by the same or similar method by which the price was originally advertised.

    Australian consumer law also has VERY strict policies against misleading and deceptive conduct by businesses. A price "error" can most certainly be interpreted as deceptive and misleading conduct.

    Lastly, A seller can’t attempt to correct the error after they have processed your sale and accepted payment, as the transaction (and the contract) is deemed complete at this point.

    So yes if they incorrectly advertise a price error (online for example) they really have to honour it if you pursue the matter.

    Please note I am not a lawyer, one may weigh in on this with further in depth knowledge.

    • spare13 on 02/09/2016 - 15:08
      +2

      My understanding (correct or not) is that online is slightly different in that it is somehow the consumer making an offer to the business, which they can choose to accept, or not. Unsure on this though.

      A hypothetical (that I believe has happened). A price error occurs. Items costing $101 is sold through online store at $1. 1000 people make purchase at $1.

      Company is then expected/required to honour this and wear a $100x1000 cost = $1 million. If this was a small-medium business. They just went bankrupt.

      • quietsarcasm on 02/09/2016 - 15:26

        Umm, am I missing something?

        $100x1000=$100,000

        • spare13 on 02/09/2016 - 15:41

          Woops. ^That

      • DaneD on 02/09/2016 - 15:28

        Not sure, can't find anything on the Australian Consumer Law website. That being said, your comments certainly make sense.

        Hopefully someone with a legal background can give us some guidance :)!

        • [Deactivated] on 02/09/2016 - 15:33
          +2

          An 'invitation to treat' in this instance applies as it an advertisement to sell. The buyer is the one offering $1 for the item, which can be easily rejected by the Offeree (Retailer). A company does not have to honor the items as it has the right to reject the offer made by the buyer. This may sound confusing, however this is contract law

        • hellbound on 02/09/2016 - 15:51

          @stuhtb: At what point does it change from an invitation to treat to a sale though? One could argue once I've paid for an item and received a receipt, it's been sold for the agreed price and isn't an 'invitation to treat'

        • spare13 on 02/09/2016 - 16:01
          +1

          @hellbound: My guess is it's in confirmation of the acceptance of the order through confirming shipment and/or store pickup.

        • [Deactivated] on 02/09/2016 - 16:28
          +1

          @hellbound:

          it's been sold for the agreed price and isn't an 'invitation to treat'

          An 'invitation to treat' is the method of establishing a contract where the buyer is the one making the offer, and the retailer is the one to decide if it wants to accept/decline the offer, or make a counter-offer. This contract is only complete when the retailer, or someone on their behalf accepts that offer, as seen in Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953]. Displaying Goods in a store is usually regarded as merely as an invitation to deal, rather than an an offer to sell(not always though), even though the display may be accompanied by a price tag of some kind.

          And yes, invitation to treat doesn't mean that the buyer always have to negotiate a price to which was displayed by the retailer, the buyer may choose to offer the same amount which may be accepted by the retailer. The receipt doesn't change how the contract was initiated, in this instance, invitation to treat.

          EDIT: So yes, you can go technically go to Coles to offer a $3 loaf of bread for $1 at the counter, which can be accepted by the employee who is representing Coles. Displayed goods are almost always treated as an invitation to treat as for the seller is not looking for an affirmative answer such as yes or no.

        • hellbound on 02/09/2016 - 16:37

          @stuhtb: But doesn't the receipt provide evidence that the buyer has offered the same amount and it's been accepted by the retailer? The retailer is then renegging on their contract and acceptance by the buyer. Whether the retailer accepts via electronic/automated process or with a physical human should be irrelevant.

        • Settero on 02/09/2016 - 16:39
          +2

          @hellbound:
          online purchases have specific terms that you agree to before purchases, mainly that the sale has to be reviewed and accepted , a confirmation sent to you , and that the merchant can withdraw at any time, its a MODIFIED contract to when you walk into a store without a formal one.

        • hellbound on 02/09/2016 - 16:41

          @Settero: Ah good point, of course the T&C's would have such clauses in them.

        • [Deactivated] on 02/09/2016 - 16:53

          @hellbound:

          Whether the retailer accepts via electronic/automated process or with a physical human should be irrelevant.

          Acceptance is one of the core elements to establish if a contract b/w two parties existed, of course it is relevant. If one does not accept the offer, how would that even account to a binding contract?

          The retailer is then renegging on their contract and acceptance by the buyer

          The buyer is the one offering, the retailer is the one accepting in an invitation to treat scenario.

        • -.- on 02/09/2016 - 22:51

          @stuhtb: For electronic transactions, it can only be interpreted as an invitation to treat (legislation overrides any other form of law). For NSW, it's the Electronic Transactions Act 2000 s 14B:

          Invitation to treat regarding contracts
          14B Invitation to treat regarding contracts

          (1) A proposal to form a contract made through one or more electronic communications that:
          (a) is not addressed to one or more specific parties, and
          (b) is generally accessible to parties making use of information systems,
          is to be considered as an invitation to make offers, unless it clearly indicates the intention of the party making the proposal to be bound in case of acceptance.
          (2) Subsection (1) extends to proposals that make use of interactive applications for the placement of orders through information systems.

          Some other interesting sections:

          Use of automated message systems for contract formation-non-intervention of natural person
          14C Use of automated message systems for contract formation-non-intervention of natural person

          A contract formed by:

          (a) the interaction of an automated message system and a natural person, or
          (b) the interaction of automated message systems,
          is not invalid, void or unenforceable on the sole ground that no natural person reviewed or intervened in each of the individual actions carried out by the automated message systems or the resulting contract.

          Error in electronic communications regarding contracts
          14D Error in electronic communications regarding contracts

          (1) This section applies in relation to a statement, declaration, demand, notice or request, including an offer and the acceptance of an offer, that the parties are required to make or choose to make in connection with the formation or performance of a contract.
          (2) If:
          (a) a natural person makes an input error in an electronic communication exchanged with the automated message system of another party, and
          (b) the automated message system does not provide the person with an opportunity to correct the error,
          the person, or the party on whose behalf the person was acting, has the right to withdraw the portion of the electronic communication in which the input error was made if:
          (c) the person, or the party on whose behalf the person was acting, notifies the other party of the error as soon as possible after having learned of the error and indicates that he or she made an error in the electronic communication, and
          (d) the person, or the party on whose behalf the person was acting, has not used or received any material benefit or value from the goods or services, if any, received from the other party.
          (3) The right of withdrawal of a portion of an electronic communication under this section is not of itself a right to rescind or otherwise terminate a contract.
          (4) The consequences (if any) of the exercise of the right of withdrawal of a portion of an electronic communication under this section are to be determined in accordance with any applicable rule of law.
          Note : In some circumstances the withdrawal of a portion of an electronic communication may invalidate the entire communication or render it ineffective for the purposes of contract formation (see paragraph 241 of the UNCITRAL explanatory note for the United Nations Convention on the Use of Electronic Communications in International Contracts).

          But as others have said, the terms and conditions would have modified the contract heavily in favour of the retailer (simply by using the site, you implicitly agree to those terms). Of course, if the retailer has deliberately misled customers, then that is a separate issue under ACL. Terms and conditions of sale may specify that acceptance of the customer's offer to buy the goods does not occur at the payment stage, but rather the delivery stage etc.

          The last issue is that it may be argued that there was no intention to create legal relations when the price is so obviously ridiculously low and made by computer error. This would render the contract void.

          So the short answer is, no you don't have any legal right to get your super-cheap goods (unless there is deception/fraud etc.) - the most you'd be able to do is go call on ACA to badger them into submission.

        • [Deactivated] on 02/09/2016 - 23:10

          @-.-:
          So the short answer is, no you don't have any legal right to get your super-cheap goods

          EDIT: Cheers for the insight! All good :)

        • -.- on 02/09/2016 - 23:13
          +1

          @stuhtb: I'm just adding onto your comment mate, hence why I replied directly to yours. Completely agreeing with you and not contradicting you at all. Although if my contribution isn't helpful then I sincerely apologise.

        • [Deactivated] on 02/09/2016 - 23:16

          @-.-: Lol sorry, thought you were saying that I was saying the opposite haha. My bad. Thanks for the help! :)

  • geek001 on 02/09/2016 - 15:24
    +1

    Hard to say what is obvious, obvious to me is $0, as no business would give away something for free. $43 is not so obvious, I reckon. Retailer made a mistake, it is understandable that people get annoyed when not honoured for wasting their time and effort. It's like you going into the store and paid for something, and then security at the door decides to stop you on your way out, saying there was a price error and you have to queue up again to get a refund.

  • BuyoTheCat on 02/09/2016 - 15:26

    the term "Bait and switch: has been thrown around on OZB a lot.

    It is important to know what it mean and how it works. Traditionally, this is something brick and mortar shop do.
    They advertise something for ridiculous price to get you into the store and then they try to sell you something else.

    They bait you with the low price, then switch you to something that is profitable for them.

    Knowing this, do you (general term of address, noone specific) still think this is bait and switch?

    • spare13 on 02/09/2016 - 15:43

      Generally, and the ACCC fines that have occured re: bait and switch. Have been items advertised for price $x. The retailer then claims they are sold out. The bait and switch occurs if the retailer did not have an adequate number of said item available. Adequate would be based on expected sell volume at that price.

      It also involves a switch, aka encourage the customer to purchase something else.

      No switch occurred. So I would say not.

  • StewBalls on 02/09/2016 - 15:56
    +17

    Coz a lot of OzB'ers can be entitled, selfish, whiny little tarts…

    /thread :)

    • juventino on 02/09/2016 - 17:48
      +5

      This. Seen it for more than a handful of occasions. Normally they will follow it up by suggesting that the events are scam or fraud. Then proceed to make a fool of themselves by quoting incorrect interpretation of the law.

      • StewBalls on 02/09/2016 - 19:02
        +1

        LOL, yes it's the bush lawyering that I love too…I've seen enough Perry Mason episodes to know the first step, let's apply for a writ of habeas corpus! :)

    • Adz81 on 02/09/2016 - 22:37
      +2

      A sad truth which seems to have become more prevalent in the last 12 months or so… it's a pity as it detracts massively from a once great site.

      The temptation to furiously fap away behind a keyboard shouting for blood and crying foul is not to be underestimated.

      Fapfapfap.

    • JimB on 03/09/2016 - 10:19
      +1

      I agree stewballs, I'd however replace tarts with twats.

      • StewBalls on 03/09/2016 - 10:23

        I cannot disagree with that amendment. ;)

  • altomic on 02/09/2016 - 16:01
    +3

    this

  • PJC on 02/09/2016 - 16:29
    +3

    If the vendor is a large company I have no compunction in reaping maximum benefit from the experience. Two months ago in BigW I discovered a trolley full of reduced to clear Cadbury's chocolate 100g bars labelled at $1.01. The checkout worker scanned it, $0.00 came up, so she called a supervisor who put it through at $1.01. I left the store, promptly re-entered, picked up 20 bars, and then discovered this particular BigW lacks self-service checkouts.

  • dasher86 on 02/09/2016 - 18:54
    +2

    It's the practice that they take your money and hold it that pisses me off. If you're not going to honour a price don't take my money before that order is confirmed and then take ages to refund me.

    • Euphemistic on 02/09/2016 - 19:29

      That is a problem with automated systems. A person at the checkout has the opportunity to say 'hang on, that doesn't seem right' a computer checks stock level (mostly) and approves the sale because the buyer has funds available. Then when the person goes to process the order they discover the error and try to stop the order or refund the buyers funds.

      • dasher86 on 02/09/2016 - 19:55
        -6

        As far as I am concerned as soon as they have taken my money they have accepted my consideration for the contract of sale.
        Other companies don't take money until despatch. This is the better system.

        • apple2016 on 02/09/2016 - 21:58
          +1

          The issue in charging your card later is that the company has to securely store the card details. This is expensive and risky.
          It's easy to charge and refund if needed. Generally refunds should not take more than a couple of day.

        • dasher86 on 02/09/2016 - 22:32
          -5

          @apple2016:
          So just because it is expensive and risky for the company to store my details they get to benefit from the cashflow and interest of my funds? That's a poor excuse for the company not spending the correct money to have a proper secure online system.
          Poor practice for the company in general.

          Why don't they put a holding amount like hotels?

          It's taken companies sometimes weeks to refund customers. Who remembers the just group pricing error?

        • Euphemistic on 03/09/2016 - 06:58
          +1

          @dasher86: I'd rather not have them storing my credit card details, not becuase it is expensive and risky for them, it is risky for me.

        • [Deactivated] on 03/09/2016 - 15:42

          @apple2016:

          Don't they need to refund to same card that was charged?

    • burningrage on 03/09/2016 - 11:28
      +1

      I think one must remember that if you have your funds taken from a bank account (as opposed to credit card) while the vendor is processing your order, you will be exposed if the vendor then goes bankrupt and you become unsecured creditor.

      I feel this point was missed.

  • altomic on 02/09/2016 - 20:16
    +1

    a few years there was a deal here from a computer parts supplier. the deal was for extremely cheap HDDs. I bought 3. they were 1/3 of the price or something insane. The sale went through, and a day later I received an auspost tracking number and everything seemed cool. Missed the postie and got a missed package card. went to the post office 2 days later (5 days after the purchase) and the postal worker (it's a tiny post office with one person and we know each other well) said that the computer parts supplier had contacted auspost the day before and asked for the item/package to be returned to them. I got a refund but was quite annoyed. partly because I didn't get to the post office earlier but mainly because a sale had gone through, they had accepted my payment and sent the goods.

    • PJC on 02/09/2016 - 20:31

      Damn, that was close.

  • realfancyman on 02/09/2016 - 20:35
    +2

    I remember a deal that was posted on here where you could get $30 off a $50 spend with TVSN. However, it was found that you could bypass that minimum spend. I fully expected the orders to be cancelled, however I ordered two USBs and then realised that you could use this for gift cards! I ordered $325 worth of gift cards and then bought a pretty nice bluetooth speaker, some bluetooth earphones and some Bose headphones. Great glitch that one was :) I actually saw on the tracking for a lot of the orders that TVSN had called Auspost (presumably to get the packages returned) however they all found there way here somehow.

  • imcold on 02/09/2016 - 22:14

    At the end of day lots of people waste a lot of time. We spend an hour researching the product, doing regular malware sweeps, browsing oz-bargain and reading every comment about the nice deal. And they spend their time cancelling orders and sending out apologies.

  • T1OOO on 03/09/2016 - 10:02

    I guess it's Coz they have been hurt and bitter over how retailers behave Increasing prices before 20% sales and just want revenge or vengeance to be made right.

    Retailers are pretty grubby in general though.

    So when we come to use the site we want some benefit but in the end we get none except to see the transparent bs they pull.

    I'd be happy with a 5-10% saving of the lowest price of an item. But that rarley even happens now. So these great deals are just of crappy RRP that no one pays and u have to spend so much that me figuring out if it's a real deal or just marketing.

  • [Deactivated] on 04/09/2016 - 14:06
    +1

    I buy items from an ISO certified company that sells things including electronic components smaller than the eye can see and should theoretically be usable for life critical situations. When they tag an item off the bulk reel, it needs to be 100% correct, and every shipment comes with a signed certificate of conformity and quality assurance. Problem is it's all bull and they make mistakes all the time. I once bought reels of expensive wire for the price of one foot each, yet the quality is assured and signed off. I once ordered LEDs and got zener diodes. They are in a 100% trust situation in certain items too small to see, but they bluff that there are quality procedures. It's so easy to put in place electronic checks and balances, such as weight and price limits to prevent human error creeping in, but they cut corners. Mistakes don't just 'happen'. Pricing should always have some sort of double sanity check or lower limit. Numeric price entry should always be twice to prevent basic mistakes, and double checked by another person. Any change more than 25% should be automatically flagged.

    When that company makes frequent errors, it's because they are completely bluffing the ISO quality certification. It's their rort.

  • Herbse on 04/09/2016 - 14:49

    I think people feel that if they get angry and send angry emails, they might have the sale honored.

    Then they put it on ebay =|

  • cdaddy on 04/09/2016 - 18:43

    I think we should blame each other. If people didn't buy 45 of an item at an obvious price error than maybe these stores would honour it more often.

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