/ Money, Shopping

Should online shops honour pricing mistakes?

If an online retailer mistakenly discounts a sofa or TV by hundreds of pounds, should the shop honour the discount for customers who took up the offer? It seems not all companies will honour pricing mistakes.

It hasn’t been a good few weeks for retailers. I’m not talking about the downturn in sales or news of another big high street name (Peacocks) going into liquidation – although this is all pretty pessimistic stuff.

I’m talking about the recent spate of pricing mistakes on big-value items – and the bad PR that followed.

First, Next mistakenly advertised a pair of sofas worth £1,198 on its website for just £98. The pricing error remained uncorrected for nearly six hours and customers said that they had £98, plus delivery charges, debited from their bank accounts.

Then, Marks & Spencer advertised a Panasonic 50-inch 3D plasma TV, worth £1,099, for just £199. Again, savvy shoppers were quick to snap them up, and some reported the money coming out of their account.

So how should retailers deal with this situation? The ensuing events show just how differently pricing mistakes can be resolved.

Stand by your orders

Next point-blank refused to honour the ‘deals’, pointing to the small print in its terms and conditions which, it says, allows it to cancel orders before they are dispatched for delivery. This is how a Next spokesperson justified the decision:

‘This was a genuine and unfortunate error, which we corrected as quickly as possible. We then discussed with our local Trading Standards office how to deal with any orders that had been placed at the wrong price.

‘We are contacting all customers involved, explaining that unfortunately we will not be able to fulfil their order.’

But it was power to the people over in the M&S camp. After trying to resolve the problem by offering the bargain-hunters off a £25 ‘goodwill gesture’, the customers set up an online petition called ‘Marks & Spencer supply our TV’s that we paid for’. Hardly the catchiest (or most grammatically correct) campaign in the world, but it worked – M&S backtracked and stood by the orders.

So, it was happy days if you wanted a new TV, but not so good if you wanted a new sofa to watch it from.

Your rights with pricing disputes

But should M&S have backed down – or was Next at fault for not honouring its mistake? I spoke to our senior solicitor, Joanne Lezemore, to get her view on where customers stand legally:

‘Generally, if you enter into a contract for goods which a company fails or refuses to deliver, then a breach of contract occurs and you can look to the company for damages (being the cost of having to buy the goods elsewhere). But where it is clear that a mistake has been made, the law will not allow one person to benefit as a result.’

So if the goods were advertised cheaper than usual, you may be able to hold the company to a contract. However, where it is clear there is a mistake (would you really expect that plasma TV to be under 200 quid?), the consumer cannot then take advantage of that mistake. So what does Joanne think of these cases?

‘My own view is that, where the mistake is not clear, the company should be bound to honour the contract. But consumers also have to be aware that if something seems too good to be true, it probably is, and a company shouldn’t to be bound by what are clearly typing errors. I think the law has the right balance in these situations.’

Do you agree with Joanne or do you think those M&S customers were right to kick up a fuss? What would you do in the same situation?

Should online shops honour pricing mistakes?

Yes - it's the retailer's problem (60%, 80 Votes)

No - we all make mistakes (40%, 53 Votes)

Total Voters: 133

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Comments
Louise says:
8 August 2014

From the retailer perspective we have a case of our shipping link to the web sonehow going down although everything my developer has done to repeat the error hasn’t resulted in an error?
But the short of it is, it allowed an order from Australia to come through with no delivery applied, so at our UK prices.
Pride myself on customer care and we would have happily covered a less costly error but cost of despatching to Australia doesn’t just eat any profit it costs 10x the cost of goods? I emailed an immediate apology letter explaining what had happened and that we didn’t yet understand how his orders had come through as if he was in the UK and offered to refund as we couldn’t cover the high delivery cost to him. But he is insisting on them being sent? Do I need to check with our solicitors (which to be fair might cost as much as the delivery)

Holiday boy says:
29 August 2014

Help – B&Q behaving badly. I ordered an oven in their big clearance sale – it was reduced from £600+ to £279. They we’re selling lots of appliances off at similar discounts and therefore, while I thought it was a great deal, I never even considered that it was a mis-price. I made the purchase on 4.August (with other items also heavily discounted) and they said delivery would be 5 September due to high demand – they took my money immediately. Last week I received a confirmation e-mail that delivery would be on 5 September today (29 August), 3.5 weeks after the order was placed they rang me and said the oven was a mis-price and they would not honour it.

There terms and conditions do say that a contract isn’t formed until dispatch – where do I stand? Surely, taking the money, sending an e-mail confirming the delivery date and taking so long to inform me it was a mis-price all come into play?

I have lived without an oven, waiting for the delivery, as I thought the saving was worth the wait? I’m now inclined to cancel everything on the order as this seems such poor behaviour by B&Q.

HolidayBoy says:
30 August 2014

To update – I called B&Q today and cancelled everything on my order due to their behaviour – none of it was important to me (other then the oven) and it made me feel better. The person I spoke to today was all apologetic, as opposed to the girl who called to cancel the oven, she was robotic – ‘I must refer you to our terms and conditions……’ Well B&Q, here are my terms and conditions – Where a supplier or retailer shows an abject disregard for me as a customer I will ensure others are made aware on public forums such as this, I will not shop with the supplier or retailer again and I will ensure as many people as I get to speak to know how poor the service provided is. I may not damage you enough to force better service, but just watch your back, Tesco started to presume customers would shop with them no matter how they treat them, they are regretting it now!

Elizabeth says:
29 August 2014

I have exactly the same situation with B and Q and Bosch oven ordered on 4th August and delivery 5th August phone call to day was offered alternative of Beko or Hotpoint oven I did not really think that the deal would go through anyway. What is really annoying is that they took the money from my credit card on the 4th August how many others have they done this to.

Andy says:
30 August 2014

I have the same problem with B&Q, I ordered two Bosch ovens to replace my two aging ovens and have removed one and modified the cabinets ready for their arrival, confirmed twice for 9th September 2014.
The ovens has been on order since 4th August 2014.
I received a telephone call stating the ovens would not be delivered citing their T&C’s as a universal get out clause.
While the ovens were reduced, it was not an obvious misprice.
Is this covered by “The Misrepresentation Act 1967” ?
No monies have been refunded yet either.

Come on, Which? Get your legal department to clarify the position for these B&Q customers.

As to these people, having reread the original article, kicking up a fuss on social media may be worth it; M&S backtracked. It was not an obvious mistake on the part of B&Q and the company may care about an angry backlash of customers (presumably, there were others who had the same issue and who may not be Which? members). You have all been inconvenienced, by the sound of what you have written.

Andy says:
30 August 2014

Update on the B&Q Bosch oven fiasco.

Some lucky individuals have apparently received their ovens.
This puts a different perspective on B&Q’s claim it was a mis-price.

B&Q management would have known immediately from their stock control system (M1) of the potential problem but waited 25 days to notify their customers of the problem. Continuing to hold all the monies for this time and (according to others) we will have to wait 14 days (working?) for a refund.
This is outrageous from a company like B&Q to act in this manner.

Andy,

If you know for a fact that some people have got their ovens, this strengthens your case. It may even put B&Q in a precarious legal position (precedent?). In my opinion, the delay in notification and holding on to money for an unreasonable amount of time, instead of notifying and refunding immediately, further weakens B&Q’s case.

I am not a solicitor and can only offer my opinion. You need professional advice, hence my call for the forum moderator to contact his (or her) legal colleagues.

I still think that it’s worth you starting a social media campaign. As I said above, not all affected customers may necessarily be Which? subscribers and not all Which? members may be following this thread.

James says:
30 October 2014

Hi,

In this instance of possible price mistakes what happens if you contact the supplier over web chat and they confirm the price? along the lines of:

Q. I think there is a mistake on your web site…
A. No that’s the correct price…
Q. Are you sure…
A. Definitely, I checked…
Q. so if I order 100 they will cost £….
A. That’s correct.

mandy says:
23 December 2014

I just had this experience. I was trying to buy a tv and the price didn’t show until you put it in your cart and proceed, so I did. It looked like 299. I purchased it at 4 am. Went to bed and 9 am they canceled my order the reason says out of stock. But actually I was charged 29.99.

kevan says:
5 February 2015

what if an item is described and priced on a site and the item that comes is not the item advertised..taking into account that the item described is a £699 guitar priced wrongly at £109.18 but a different item altogether is received…can i demand the guitar at the price i paid? i.e. the lower (wrong)price