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6pm.com's 1.6 million dollar pricing mistake
- ErrantX 16y agoIirc there is not necessairily a legal requirement to honour those orders. So kudos to them for choosing to do so!
- electromagnetic 16y agoIt falls under contract law, and yes they're required to honour those orders as it fulfils all the requirements of a contract. A mistake is no defence in civil proceedings for contract violation. Once you've 'purchased' an item, regardless of whether the money has been deducted from your credit card yet (Amazon charges on dispatch, but has to honour the price made at the point-of-sale) or not, you've both agreed to a contract to exchange a product for currency. A company not delivering a product is just like a customer not paying, only it's much easier to file a lawsuit against a company than an individual. Considering they could have had to pay $1.6m + class action legal fees means they saved a lot of money by simply taking the loss.
- jrockway 16y agoPretty sure this is not true at all. If they take your money and do nothing, that's a problem. If they take your money, say "oh fuck, we don't have that item at that price anymore", and give you your money back, everything is fine. If they never take your money (as they don't charge you until they actually ship the order), then they have even less obligation. What they probably can't do is ship you your stuff for $50, find the mistake a month later, and then silently charge your credit card the $500 difference. And they probably can't ask you to send the stuff back.
- electromagnetic 16y agoAfter money has changed hands, here in Ontario at least, it is a violation of the consumer Protection Act to withhold the goods and renegotiate the price and a company is legally liable up to $250,000 for each infraction in punitive damages. If they take your money and don't have the item, they have to refund you or provide a like product at the same or discounted price, cannot be more than 10% more than the listed price or it violates another subsection of the law for price estimates. Or they're back into the above and $250,000 in punitive damages. If they don't take your money, they're open for a suit for advertising the product and not providing it at the listed price. At this point it is merely on the judges discretion, and doesn't fall under the CPA. However, considering every product was capped at $50 and no one noticed, they would really be up shit creek without a paddle. It's a gross mistake and they made no attempt to reconcile the error (you know by shutting down the site) until 6am because they made no effort to check their pricing accuracy. Like I said, they'd be open to a $1.6m lawsuit + the cost of legal fees and considering they obviously made no effort to check their prices, I don't see how they would have a defence. This isn't one little item that slipped through the net, it's the whole fucking store including the vinyl floor tiles! There's no guarantee they would have to pay, it would be entirely up to a judge, but considering they obviously have no practices or policies in place to ensure these things are caught means they'd have no defence in court saying 'it was a mistake' because it wasn't, it was a complete lack of a price accuracy policy.
- tzs 16y agoAre you a Canadian lawyer? The alleged laws you describe are quite far from the practice in other common law countries, but are quite similar to the misconceptions non-lawyers have about the law in most other common law countries, so I'm skeptical.
- mrtron 16y agoFutureshop has repeatedly refused to uphold mis-priced items in Ontario.
- ergo98 16y ago>After money has changed hands, here in Ontario at least, it is a violation of the consumer Protection Act to withhold the goods and renegotiate the price and a company is legally liable up to $250,000 for each infraction in punitive damages. You're absolutely wrong. There is a strong protection here in Ontario against liability for technical errors, and it has come into effect multiple times (always with entitled people thinking they won the lottery writing angry letters to the editor decrying their grievous injury). So long as they reverse any charges, neither party is out anything and no one has any entitlement to the result of a mistake.
- DougBTX 16y agoIt's a gross mistake and they made no attempt to reconcile the error (you know by shutting down the site) until 6am Did you read the article? They shut down the site when they saw the problem, which occurred between midnight and 6am, a popular time for sleeping.
- Lewisham 16y agoThis depends on the country. If I remember my law class in the UK, there is no legal reason to ship the goods in this situation. The price online is only one that is offered. The buyer giving money to the retailer is considered an acceptance of the offer, but the contract is not binding unless the retailer then displays that they still wish to go ahead with the transaction on those terms. My lecturer always referred to it as the courts wanting to see "a meeting of minds." This leaves online retailers (and brick and mortar that sticker an item wrong) the time to change anything before the item is placed in the buyer's hands, and the court will look particularly down on a transaction where the buyer could not have reasonably expected the transaction to be valid (like buying a TV for 1 GBP). My understanding was that much of contract law in the US was based on UK law, but I am by no means a lawyer in either jurisdiction :)
- scotty79 16y agoIn Poland price online is not even an offer. It's request for offers of purchase from customers. When buyer puts item in the online basket and fills in his details he is making an offer to the seller that he wants to purchase the goods at the given price. If the seller sends the buyer confirmation email stating that he actually wants to deliver the good (automatic notifications about registering buyers offer do not count) then the contract with all the following obligations is formed.
- ErrantX 16y agoI last had this discussion sometime last year when Argos did much the same mistake here in the UK - but cancelled the orders. At the time a contract lawyer weighed in and explained there were various caveats and so forth that allowed them to do this. (certainly prior to taking the money then they are able to simply cancel the order at any time. After that I suppose it depends on the country/contract law involved)
- electromagnetic 16y agoI know here in Ontario, they can cancel but they are legally open for violating the consumer protection act for misleading practices and a mistake is no protection in court. An agreement between stores, and I believe one Amazon.ca upholds, is that they offer you the product at the original price with a $10 discount/credit (if it costs more than $10 - free if it costs less than $10). However, this is just a practice to placate the consumer as on gross mispricings like a $1000 TV for $5 people know they're taking advantage and will either be happy to take the $10 off, or will cancel the agreement thus removing all legal liability on the company. However, if the $5 had entered the till and a manager came running out trying to stop you leave with the TV, well you just got a $5 TV and if they stop you, they get up to a $250,000 fine and you get yourself a TV. Quite ironically though, if you notify the cashier of the mispricing, most store policies will give you the item for free regardless of price! So the people walking away with the $10 credit are really losing much more than if they had honestly notified a manager. One of the caveats is that the agreement is generally to sell X number of products at $Y price, and if they don't have the quantity of products to supply the amount of orders they can actually cancel the orders and later reoffer them at a corrected price, which is probably what Argos got away with.
- ErrantX 16y agoAre Zappos based in Ontario (I wasn't sure if that is why you mentioned there in particular?). Ultimately it will depend on where the company is based; but for the most part mispriced items are usually explicitly accounted for in the Terms and Conditions of sale you agree to (I know that was part of what Argos used over here). I seem to recall there was a legal argument over it.. because in the real world if a shop advertises a $10 for $1 there is no legal requirement (at least not here) for them to sell it at that price - if they notice. If they accept your offer to buy at the lower price then there is nothing they can do. The argument was that digital sales worked in a different way (and that manually approving each sale like in a shop was infeasible) so I am pretty sure a lot of work went into making sure the law applied to when the item was shipped. I noticed Amazon still don't take money till they ship the item; so it could be this was never actually resolved. (by the way I can't find any references to the laws you mention - got any links?)
- idoh 16y agoJust an FYI, here is the relevant terms and conditions: "TYPOGRAPHICAL ERRORS In the event a product is listed at an incorrect price or with incorrect information due to typographical error or error in pricing or product information received from our suppliers, we shall have the right to refuse or cancel any orders placed for product listed at the incorrect price. We shall have the right to refuse or cancel any such orders whether or not the order has been confirmed and your credit card charged. If your credit card has already been charged for the purchase and your order is canceled, we shall immediately issue a credit to your credit card account in the amount of the charge." http://www.6pm.com/terms-of-use http://www.6pm.com/terms-of-use If you are going to talk like a lawyer you should act like a lawyer and read the fine print.
- electromagnetic 16y agoTerms and conditions aren't legally binding, perhaps you should read the law.
- ErrantX 16y agoTerms and conditions are very much legally binding in the case we are discussing (online sales) - you are explicitly offered them as the contractual terms of sale. What T&C can't do is rescind the basic consumer rights offered under law
- jrockway 16y agoelectromagnetic contends that the "basic consumer rights offered under law" include the obligation for the seller to have an infinite number of any item in stock and ready to ship at whatever price the website happens to say, even if it's an obvious mistake.
- ErrantX 16y agoWell I've just been skimming the books on my law shelf (Google was completely unhelpful) and they seem to back up what we've been saying so far; there is no provision under current consumer law to force the retailer into honouring it (actually there is sort of one but it's wording basically says "unless the retailer says otherwise..." etc.) IANAL so that's just how I read it.
- johnthedebs 16y agoFunny that they found the error at 6am.
- dangoldin 16y agoGood thing that they found it that early too. May have cost them a lot more if they found it later.
- stretchwithme 16y agohmm, so maybe test driven development can actually save you big money
- oldgregg 16y agoSomebody really lucked out. http://www.6pm.com/dsquared2-boot-paragnosta-cusna-t-moro http://www.6pm.com/dsquared2-boot-paragnosta-cusna-t-moro
- naner 16y agoGod those are ugly.
- rokhayakebe 16y agoYeah, I was wondering if they actually made a mistake by buying it for that 49.99.
- mitjak 16y agoWelcome to HN, the meeting place of finest fashion tastes and trend setters.
- jrockway 16y agoI like 'em.
- rokhayakebe 16y agoYou like the boots, jrockway? You are my newest hero/hera.
- jrockway 16y agoHah! I was indeed referring to the boots. :)
- mitjak 16y agoI love them. The price tag obviously bites but coupled with some slick jeans and a plaid shirt this would be irresistable.
- 16y ago
- aidenn0 16y agogood PR vs $1.6M and bad PR. Any doubt what the zappos people would do?
- jbarciauskas 16y agoSounds like a $1.6 million unplanned marketing event. I'd bet it pays off better than $1.6 million in traditional advertising.
- ericz 16y agoNot really. A bunch of people got great deals but the blog post is from two days ago and I've yet to see any coverage in traditional media outlets. It seems like $1.6 million can buy much better exposure.
- hga 16y agoTwo days ago was a Friday, I think it's a little early to judge the outcome of this.
- clistctrl 16y agoI had not even heard of the site before it was posted here. I'm almost ready to check out with a decent order.
- minouye 16y agoNo question that 1.6MM could definitely buy much more exposure (the end goal of this exposure being customer acquisition and sales). Don't get me wrong, they did the right thing--however, this is no "happy accident".
- barmstrong 16y agoYep - we did a Zappos tour last week and judging from their culture they would view this as a great marketing expense in addition to "the right thing to do". Also it's not fair to judge it by major media exposure because: 1. The people who got those deals will generate word of mouth 2. If they hadn't honored it it would have generated negative word of mouth Gotta factor those two in.
- megablast 16y agoYes, but word of mouth is incredibly hard to measure. (twitter and social media helps a bit in this regard) What you can measure is broad media exposure, so this is what you look at as a measure.
- coryl 16y agonoooo freakin way, amazon.com would never let that kind of stuff happen.
- zachbeane 16y agoIn mid-2007, Amazon.ca listed Lisp in Small Pieces, an $85 textbook, for $3.95. A guy I know ordered it at that price and it was fulfilled without incident, so I posted it to my blog at http://xach.livejournal.com/133661.html http://xach.livejournal.com/133661.html - it quickly became the #1 seller on Amazon.ca for the day. Amazon cancelled the orders and gave everyone a $10 credit.
- jrockway 16y agoTechnically, he did say "amazon.com" would never let that happen.
- deleted 16y ago[deleted]
- coryl 16y agoI tried buying a PSP kit that was mis-priced around Christmas time. They cancelled it and didn't give me so much as an apology or regret, citing their terms of service policy. Also, what with the downvotes...
- matt1 16y agoAnyone want to venture a guess as far as what kind of bug would cause a price cap like this?
- modeless 16y agoPerhaps they meant to cap prices at 5 thousand dollars but it turned out to be 5 thousand cents instead?
- jrockway 16y agoif price > $49.95 { price = $49.95 }
- TrevorBramble 16y agoMichael: "I must've put a decimal point in the wrong place or something. ----, I always do that. I always mess up some mundane detail." Peter: "Oh! Well, this is not a mundane detail, Michael!" Michael: "Hey, quit getting pissed at me. Alright? This was all your idea, ---hole!" Peter: "Alright, okay, alright, let's try not to get pissed off at each other. Alright? Let's just calm down, let's try to figure this thing out together."
- jrockway 16y agoPretty sure you can say "fuck" and "asshole" on the Internet.
- kqueue 16y agoConsider it a good advertisement.
- mikecane 16y agoThose of you looking at this and commenting are missing the number one question: Are you in business to just make money or to have customers? There is a very big difference there. How many of you have been "loyal" customers only to get screwed? And how really small and mean was that screwing compared to the future business you would have given that company -- and compared to the business you once did with that company?
- bonsaitree 16y agoSilver lining. Until today I had not ever heard about 6pm.com. Due solely to their mistake, this post, and their honor, I'll be sure and check them out for future purchases.
- wmblaettler 16y agoI was thinking the same thing. And I even spent that last 10 minutes perusing their site. I don't know if this publicity was worth 1.6 million in the long run, but I believe it will bring in more sales than if it had not occurred. I am even tempted to pass this site along to my wife (the big shopper in our household).
- hnote 16y ago1.6 million dollar loss is equivalent to 15% of Zappos' profit for the last year (cf. SEC filing http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-SECText&TEXT=aHR0cDovL2NjYm4uMTBrd2l6YXJkLmNvbS94bWwvZmlsaW5nLnhtbD9yZXBvPXRlbmsmaXBhZ2U9NjQzMjk5MCZhdHRhY2g9T04mc1hCUkw9MQ%3d%3d http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol...). We shall see how this "materially important event" finds its way into Amazon's next 8-K SEC filing - investors have the right to know...
- boredguy8 16y agoI had a similar experience at Nalgene: they had published an internal 50% off staff promotion coupon. That coupon made it to slickdeals.net, and lots of people bought lots of goods. Nalgene honored the purchases. The difference: what Zappos noticed in the course of six hours, Nalgene didn't notice from about Saturday afternoon 'till Monday morning.
- ck2 16y agoTry getting Amazon.com to honor ANY price mistake. In 10 years of shopping, it's never happened.
- zackattack 16y agoI got a ton of free toys and board games through ToysRUs.com (powered by the Amazon.com site) when I was in high school. Someone on the SomethingAwful forums had discovered a magic coupon code and we all benefited pretty nicely.