Welcome to the cheap seats
News spread quickly via the internet last week when Next accidentally priced a £1,198 pair of sofas at £98. Bargain hunters rushed to the retailer’s website and placed orders, had their accounts debited and received confirmation emails with estimated delivery dates.
The apparent bargain was posted on deals website Hotukdeals.com and orders flooded in until Next caught on and withdrew the offer.
The store then disappointed customers by falling back on terms and conditions allowing it to cancel orders before the goods are dispatched for delivery.
Catalogue retailer Argos claims offering Nokia's Lumia 800 smartphone for just £119.99 was a mistake. It normally sells the smartphone for £449.99 but for a few hours last Saturday the price was advertised at £119.99.
News quickly spread through Twitter and some high-profile tech bloggers, as well as on Hotukdeals.com. According to Hotukdeals, more than 167,000 users had read the post by Monday morning.
Risking the wrath of its customers, Argos maintained the price was a mistake and cancelled orders at the £119.99 price.
Power to the people
However, retailers don’t always get their way when it comes to pricing errors. Sometimes a well-argued campaign by disgruntled customers can persuade them to change their minds.
For example, a Marks & Spencer (M&S) pricing blunder saw 50 inch 3D plasma screen TVs - which normally retail at £1,099 - on sale for just £199. After the orders flooded in, the high street giant realised its mistake and cancelled orders at the knock-down price, offering disappointed customers £25 as a goodwill gesture.
But these weren’t any customers, they were M&S customers and they refused to be fobbed off. An online petition entitled Marks and Spencer supply our TVs that we paid for forced M&S to do a U-turn and honour the orders. Despite the terrible punctuation on the petition, it made some valid arguments about the binding contract M&S had entered into when it accepted orders and took customers’ money.
After the turnaround M&S said honouring the orders was a “business decision” and didn’t admit its original stance was wrong.
The internet makes news of pricing cock-ups travel quickly. Deals website hotukdeals.com, as the name suggests, lists hot deals on anything from cheap soft drinks in supermarkets to electronic and computer gear on sale at dirt cheap prices. In many cases retailers are often just shifting stock, but the occasional pricing blunder gets promoted via the site and its Tweeter handle @HotUKDeals.
Unfortunately, under contract law in many cases the retailer doesn’t have to honour an order when it’s made after a pricing glitch or mistake.
If the mistake occurs in a shop the retailer can refuse your money at the till and withdraw the product from sale while it prices it correctly. This is because the retailer is not actually ‘offering to sell’ the goods for the price indicated; it is what the law calls an ‘invitation to treat’ i.e. the retailer is inviting customers to make an offer to buy. However, they can refuse to accept the customer’s money as there’s no contract between the two parties.
It gets a bit more complicated when goods are sold online as it depends on whether a contract has been made between the two parties.
The retailer needs to accept the customer’s order for there to be a contract. If it hasn’t accepted the order it can withdraw the product from sale and cancel the order. Exactly where you stand will depend on the website’s terms and conditions and the wording of any e-mail sent to you when you placed the order.
Many websites say in their terms that an order is only accepted when the goods are dispatched. Any e-mail sent to the customer beforehand is simply an acknowledgement of receipt – as opposed to acceptance - of the order.
But in some cases the wording of the e-mail will have accepted the customer’s order and the customer would generally be entitled to purchase the goods at the advertised price.
What do you think? Should retailers honour the price they advertise? And where do you hear about mis-priced bargains? Let us know via the comment box below!