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Last Updated: Friday, 21 March, 2003, 12:12 GMT
Time to get real about the net
It is time we grew up and stopped trying to take advantage of mistakes by online retailers, argues technology analyst Bill Thompson.

Amazon site
Too good to be true?
If Dixons were to print the wrong price label for a computer and put it on their shelves at 7.99 instead of 799 then two things would happen.

First, any customers who called over a sales assistant to buy one of the bargains would be informed that the price was a mistake. Second, we would not hear about it because such pricing mistakes are both common and uninteresting.

But when Amazon's UK site advertised iPaq Pocket PCs for 7.32 instead of the normal price of 300, the news circulated so fast by e-mail that thousands of orders were placed, with some people buying 50 or more.

The UK site was eventually taken offline for about an hour while it was all sorted out, partly because of the sheer volume of people trying to buy at this ridiculously low price.

Those who thought they had managed to get in before the mistake was fixed are not, however, going to be getting their computers.

Amazon has told all customers for the mis-priced iPaqs that their terms and conditions of purchase, which every customer has agreed to, make it clear that a legally binding contract for the sale of the goods concerned does not exist until they are physically shipped and the customer's credit card is debited.

Mistakes inevitable

Since a contract is a two-way thing, an e-retailer is perfectly entitled to do this, just as you as a customer in a bricks and mortar shop are entitled to change your mind about what you are buying up to the point where your card is swiped through the machine.

It is the moral equivalent of being given too much change in a supermarket and pocketing the money instead of handing it back
Bill Thompson
You would object strongly if the staff at Sainsbury's stopped you replacing the Easter eggs your children had carefully placed in your shopping basket without your knowledge just because you had made a contract to buy, and the same applies for the retailer.

In a shop it's easy: the window display and shelves are what is legally called an invitation to treat, and no binding contract exists until you offer to pay and your offer is accepted.

Online it has always been more ambiguous, partly because so much of the process is automated and therefore there is no point at which a human assistant agrees the sale.

Recognising that pricing mistakes in large databases are inevitable from time to time, retailers have stated that as far as they are concerned the contract starts when the money is taken and the goods are shipped.

This seems reasonable to me, and those who want to argue otherwise and claim that Amazon sold them the cheap iPaqs when they clicked on the purchase button are only interested in taking advantage of an honest error.

It is the moral equivalent of being given too much change in a supermarket and pocketing the money instead of handing it back.

Patently absurd

Yet somehow Amazon are being blamed for refusing to allow themselves to be taken for a ride by greedy web surfers.

This sort of incident demonstrates yet again that we still do not see the net as part of the real world
Bill Thompson
Predatory lawyers are already circling like sharks, telling unhappy punters that they could sue because the terms and conditions on the Amazon site are unclear, not prominent enough or unfair.

This seems unlikely, especially since case law makes it clear that if a buyer understands that a price is a mistake and tries to take advantage of it then they have no right to insist on the offered price being upheld.

And since the relevant Amazon page did not advertise a special offer or any other deal, anyone suing the company has little chance of succeeding.

Much of the newspaper and online coverage has focused on the damage to Amazon's reputation, with some even arguing that they should send out the iPaqs just to maintain goodwill.

This strikes me as patently absurd, especially since not one of the thousands of people who headed off to Amazon to buy a cheap handheld computer was in any doubt at all that this was a mistake.

This sort of incident demonstrates yet again that we still do not see the net as part of the real world, treating it instead as a separate space where different rules and norms of behaviour apply.

We will never make full use of the net's capabilities, or understand the real impact of tools like e-mail and the web on our daily lives, until we can overcome the absurd belief that online activities take place somewhere else, and change our attitude to small-scale mistakes like this.

Do we need to change the way we think about shopping online? Or should retailers honour the prices on their site, even if they are obvious wrong?

Totally agree that Amazon should not be singled out or chastised over this. How can anybody who saw these on Amazon really claim that they did not think it was a mistake in the pricing? Sure I would be tempted to try and buy at the mistaken price but if I was then told that the deal was off then I would say fair enough. It is disgusting that lawyers could even recommend people go after Amazon over this. I have been shopping on the net for over seven years and have never seen an online retailer as anything different to a traditional bricks and mortar one. Come on folks, wake up and smell the coffee!
Keith Butland, UK

It seems to me that after an incident like this the e-commerce sites actually benefit from the free advertising and increased browsing on their sites by shoppers hoping to find similar "bargains".
Steven Woodfield, UK

It's not a question of morals, it's a question of ethics. Amazon should honour the price and eat humble pie. I once bought an airline ticket on line and I discovered that the price varied from morning to afternoon by at least $150. I got the cheaper price and a round trip ticket to Phoenix, needless to say I would have been mad if my card was charged the higher price or I missed my trip. The Amazon case might be notable for the magnitude of the error, but it was their fault, not the web buyer.
fred, USA

With reference to your "Dixons" illustration - if they have a label saying 7.99 and charge me 799 two things occur - firstly they are obliged to refund the difference, and secondly they are liable for a fine for 2,000 for each item they have on the shelf at the incorrect price. The point is that fraud is committed when the price that i could be charged for an item is different to the price displayed. Were they to charge me at 7.99 for a 799 item, I'd buy 50. I'd be interested to hear what Trading Standards, and the ASA have to say about the issue - the advertised price of an item was different to the price the retailer intended to charge. Quite rightly the retailer (in this case, Amazon) withdrew the product from sale. Had anyone been charged at all whilst the product was advertised at the lower price, Amazon had an obligation to sell at the lower price. If they'd dared to charge anyone 300 for an item advertised at 7.32, and they had, say 100 in stock, they'd find themselves potentially liable for a 200,000 fine. The retailer should get it right to start with. If that's too difficult because their database is too large for them to effectively manage, tough.
Jon, UK

Two to three years ago I had the same problem when buying a Handspring Visor from a web company, the difference was that they sent me a receipt of the purchase and so both trading standards and solicitor friends said that we had entered in a contract to supply goods at an agreed price. They refuted my claim and so my only option was to buy the item from another company and then try and claim the difference back from the original company.
Ian, England

I'm sure e-retailers won't refund any customers they accidentally overcharge. Also I thought a retailer did have to honour a price tag in a shop even if it is incorrect. You can't have one price on the shelf and another at the till.
Mike, England

I totally agree with Amazon's response. We are all far too capable of making an error and you cannot justify ripping someone off for what is an honest mistake. As for the lawyers, I cannot at times believe, that we have lost our decent moral sense of what is right and wrong to such an extent that we are prepared to invoke the full force of the law against something that most people with a half ounce of common sense would see as being appropriate.
John Craddock, UK

I think Bill Thompson's comments regarding incorrect price being displayed in Dixons are absurd. By law a High Street retailer is not allowed to sell a product for more than the price affixed to it. This would result in the shop being forced to sell the item for the price shown (whether it is a mistake or not) and then having to remedy the situation after, in order to avoid the problem getting worse. Online shops on the other hand operate in a different environment where the customer doesn't have to move to make a purchase and has immediate access to probably the best information distribution system in existence; so the error can "snowball" very quickly indeed. However, is it really fair that one type of shop should have this type of law enforced when another is exempt.
Michael Lavelle, Ireland

Michelle from Ireland is sadly mistaken. The law is that to have a contract there must include the elements of offer and acceptance. Putting items on display, with or without price tags, is not an offer but an invitation to treat. The offer is made to contract when the item is brought to the till and acceptance, by the shop, is when your money is taken. Therefore, as the incorrect price is not part of the offer, the shop is entitled to refuse to sell except at the correct price whether it be more or less and the purchaser is then free to accept or reject this. In Amazon's case, they have even more protection because they expressly say in their terms acceptance only occurs on the despatch e-mail. I too tried to make a purchase but fair game to Amazon, they are entirely within their rights and I'm not going to whinge about that.
Eva, UK

The problem here is where the contract is perceived to be agreed. In a bricks and mortar shops, I take the good to the checkout, pay and leave with my goods, contract complete. Online the situation is somewhat different and no where near as clear cut. The online resellers are to blame for this confusion. In an attempt to simulate the offline purchasing process they give us a false purchasing system. When I go to the "checkout" at Amazon and "pay" I am actually doing neither. If I then get and e-mail confirming the order, that should be my contract. Imagine if you rang up a mail order company, ordered and item and handed over your credit card details. The operator says thanks for your order and the call is over. Your product never arrives and the mail order company later says "sorry the price was wrong, you can't have the product". I don't think anybody would be willing to accept that and we shouldn't have to accept the same thing happening online. In the end it is the responsibility of the online reseller to ensure that the data in their catalogue is correct, and they have nobody else to blame but themselves if it is not.
Andy Oakey, UK

I'm not sure how it should translate on to the web, but if you spot a pricing mistake at a Safeways (be the item advertised as too much, or too little) and inform them they give you that product for free (as a thank you for notifying them) and then fix the label. Again the difference here is that the level of human interaction with the checkout operator allows for this. May be online retailers should offer a regard for being the first to report an error.
Andrew Scott, UK

I think the online shoppers that blatantly attempt to exploit genuine errors on websites by ordering a large number of items should be charged the full, correct amount!
Richard, UK

Have you people no shame? This is not a case of Amazon deliberately mis-pricing goods for free advertising. It's just a case of a honest mistake and thousands trying to exploit it to their advantage. Do we really want a world where you cannot breathe without being sued by lawyers, all so that a few individuals can make a quick buck?
Kevin Campbell, Edinburgh, Scotland

Sounds to me like old Bill has sour grapes for not spotting the offer for himself. Bet if he had ordered the item himself he would take a different stance!
Matthew Hobson, Ireland

When I worked for a large chain store on price control we had a legal obligation to give the customer the product at the advertised price. This is due to advertising laws, so if a customer buys a product which is advertised at 7.99 and it goes through the till at 300 then we have to forgo the 292.01 because it was advertised at the lower price
Tim Donovan, UK

Fair play to everyone who made the offer - after all, it's worth a try! It is Amazon's responsibility to inform the customers of the correct price, and if they cannot do so initially then they they cannot complain about having to get in touch with customers afterwards. Nobody is really losing out here, after all.
Jon, UK

No sensible business would be expected to honour such a ridiculous pricing error and I do find it funny to hear all the people who tried to buy 50 iPaqs! However I disagree that you can dismiss this error of Amazon's lightly. It shows a fundamental flaw in their control systems for such a large pricing error to occur. What if price had only been wrong by 50 - would they have spotted that and what if customers were overcharged? As a chartered accountant, in my view it raises some questions about the financial controls at Amazon.
Andrew Mercieca, UK

There are so many greedy people in the world. One honest mistake, and they think a retailer owes them. The funny thing is, if the person who found the mistake originally hadn't told anyone, amazon may not have noticed the 'bargain'. Shame on those people who tried to exploit an excellent company that has struggled to make a mark in the dot.com jungle.
Daniel Kirwilliam, Wales

I received a confirmation of my purchase of one item. However, they have now turned round and said that it was incorrectly priced and that I have to order it again. As one or two people here have said already, you would think that when you have received confirmation then that would seal the contract.
Karl, UK

Amazon and other retailers should be much more sensible than they have been. All items offered for sale should have a subject to availability limit. The limit of available stock should then reflect say two standard deviations of sales higher than normal sales volume (reducing per order or over a day). Any order for volumes larger than this should be subject to confirmation, and of course it should land up on a supervisors desk who can fix the price quickly. If Amazon do have a special deal on, then they can always raise the availability limit. Otherwise I wholly agree with sentiments of those who expect online customers to show some integrity - a clearly wrong price should not be abused.
Adrian Pinington, UK

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Bill Thompson is a regular commentator on the BBC World Service programme Go Digital.

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