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Amazon Adjusts Prices After Sales Error
Posted by
kdawson
on Thu Feb 15, 2007 09:07 AM
from the double-dipping dept.
from the double-dipping dept.
An anonymous reader writes "On December 23, Amazon advertised a 'buy one get one free' sale on DVD box-sets, but apparently did not test the promotion before going live. When anyone placed two box-sets in their cart, the website gave a double discount — so the 'grand total' shown (before order submission) was $0.00 or some very small amount. Despite terms stating that Amazon checks order prices before shipping, Amazon shipped a large number of these orders. Five days later (December 28), after orders had been received and presumably opened, Amazon emailed customers advising them to return the box-sets unopened or their credit cards would be charged an additional amount (more threads). Starting yesterday, Amazon has been (re)charging credit cards, often without authorization. On Amazon's side, they didn't advertise any double discount, and the free or nearly-free box-sets must have cost them a mint. But with Amazon continually giving unadvertised discounts that seem to be errors, is 'return the merchandise or be charged' the new way that price glitches will be handled?"
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The wise customer (Score:5, Interesting)
Re:The wise customer (Score:5, Informative)
will refuse the charge (Score:5, Interesting)
Amazon committing a charge after the transaction has completed should be considered fraud and treated as such.
Re:will refuse the charge (Score:5, Insightful)
So, let's get back to the issue. People saw on various threads on the net "Amazon Price Mistake!" logged on to Amazon and started ordering away, hoping their orders will get through. Probably the ebayers were the fist to take advantage of this. Now it was obvious to them that it was an error in the final cost calculation, as the promo rules were clear. There were even threads about the ethics of this on the various fora such as DVD Talk.
Amazon does send many of these orders (my guess is many thousands) and when they realize it they apologise and they ask to pay return shipping to get them back or to charge the right amount. Then people start acusing Amazon.
Wow. Just wow. I think because the general rule is to hate big corporations, we applaud people who try to steal from them? Yes, I would consider it stealing if you try to take advantage of a price mistake (especially if you do it to make money off ebay) AND you complain when the merchant wants to correct it. Yes, if the big corporation does not loose a lot of money, they will not bother you about it (consider it something like advertisment costs) and you would be fine with your conscience. But the fact that Amazon (with the amazing IMHO CS record) asks this, it meens that way too many people took advantage of this (I would bet most not for personal use) that they have to cut back their losses.
Now, IANAL, but I have read many times on slashdot about cases such as the one with the animal (I forgot, was it cow or horse or sth?) that was cheap for meat but was not sterile after all so the court annuled the low price contract. In the animal case the buyer did not even know more than the seller - it was just luck - while with the Amazon situation the buyers were aware of the mistake on the seller part, something which makes the case simpler to me.
Re:will refuse the charge (Score:5, Insightful)
If I charge my client a price for an item or service, and they stand up to their end of our bargin, I must stand up for my end... period.
If I accidentally give them a quote with no shipping costs on it, for example... well, I eat shipping on that order.
If I quote them a price on a special order item, then go to order it and realize the price I had was old, well, that's my fault too, not my customers. We made a deal, and they lived up to their end of it.
Going back after the fact to revise the terms of your deal is not only fraudulent, but opens the door to huge amount of intentional fraud. A contract would have no legitamacy at all... "whups, sorry, I messed up, let's rewrite the deal".
I'm sorry, if you cannot be bothered to keep your own systems in order, you pay the price of failure. Amazon has no right and should have no expectation whatsoever that a single one of those customers would or should return what they purchased, fairly, for a price Amazon told them was good. Period.
Say this were brick-and mortar (Score:5, Interesting)
I know what I'd do. Even though I hate big, faceless corporations, I'd pay. I wouldn't even think about it. That's just the way I was raised, I guess. Would I do the same thing on Amazon? I'd like to say yes, because I think the morality is pretty clear, but I'm actually unsure of what I would have done in this situation. The real difference is looking somone in the face and knowing, "hey, this person will probably get shit if I do this and their boss finds out." Without that immediate, person to person contact, the urge to put one over on a big corporation when no one will get hurt is pretty tempting.
Re:Say this were brick-and mortar (Score:5, Insightful)
Re:will refuse the charge (Score:5, Interesting)
Re:will refuse the charge (Score:5, Insightful)
Re:will refuse the charge (Score:5, Interesting)
Doubtful. The FTC considers an order "properly completed" when payment is made based on the invoice price. At that point, no unilateral changes can be made - it's a binding contract accepted by both sides. (Mail order companies are free to make price changes and correct mistakes *before* a card is charged and the order shipped, but not after.)
I'm not exactly sure how or when orders with an invoice price of "0.00" are considered properly completed, but I would guess at the time the order ships. That would constitute acceptance of the contract. Obviously, any order shipped based on some "small amount" (as mentioned in the article summary) would be properly completed at the time of the original charge.
I don't see that legally Amazon has much of a leg to stand on here. You can't assume every customer was knowingly out to rip off Amazon, and even if they were, it was Amazon's mistake in not catching their own pricing error before completing these orders. It would be one thing if they put a stop on all the orders before shipping and emailed everybody that they'd need to adjust the prices - that happens all the time, and is the legal way to fix mistakes - but that's not what happened here. Amazon legally accepted these orders as correct and shipped the merchandise. At that point, the legal onus is no longer on the customer.
It's UCC, not FTC (Score:5, Informative)
I am a lawyer but not your lawyer. Do not rely on this, as it is not legal advice, but merely another
Re:will refuse the charge (Score:5, Insightful)
Re:will refuse the charge (Score:5, Insightful)
When it's online I think certain rules apply, and "send it back or be charged" is definately justified.
It doesn't matter if it's justified or not. It's most likely a violation of their agreement with the credit card processing company and it's certainly a violation of the customer. If I agree to a $100 invoice and approve the charge on my card they can't later change that to $200 because they screwed up.
All that said, I have a lot of respect for Amazon and have done a lot of business with them. It's pretty low to take advantage of their mistake like this. But it was their mistake and that doesn't mean that they get to change the rules and start charging peoples cards after the fact.
Re:The wise customer (Score:5, Insightful)
While many people have a problem with Amazon, I have had nothing but the best experiences dealing with them. Their customer service has been top notch the one time I have needed them, they ship fast, and they ship for free.
While it sucks that a mistake was made, I think these customers are being a bit greedy expecting to get "something for nothing." While Amazon represents the "big corporation" and people love to screw with big companies (and some probably deserve it), I think its morally wrong for people to expect to not have to pay for the merchandise received.
Re:The wise customer (Score:5, Insightful)
Re:The wise customer (Score:5, Insightful)
IANAL but this is certainly what a customer is likely to argue in court. The seller has the responsibility to make sure that the invoice total is correct. No excuses. It is very clear that the final 'accept' button is an offer of a contract.
Its a losing proposition for Amazon here. They are going to get crucified by chargebacks for the unauthorized purchases.
The mailings telling people to return the merchandise would appear to risk falling into the category of demanding payment for unsolicited goods. The customer agreed to pay for the goods but for the stated price.
Just fire the middle manager who you have bungling the remediation on this, eat the ten million or so and move on.
Re:The wise customer (Score:4, Informative)
Disclaimer: I've no idea what the position is in the US (and whether it varies State by State). But safe to say your post is not necessarily correct.
Re:The wise customer (Score:5, Insightful)
Re:The wise customer (Score:5, Insightful)
Re:The wise customer (Score:5, Insightful)
You go to WalMart and buy a sleeping bag that was mispriced at $500. (perhaps some toddler moved the sticker from some other product.) Perhaps you didn't even see the sticker, but you know from having looked previously that the price is around $50 bucks. However the clerk at the counter mindlessly rings you up for $500.00 instead of $50. And without paying attention you sign your cc slip and happily and walk out of the store. A few days later you realize you've paid $500, a clear mistake, and you take the bag and receipt back to Walmart and ask for your money back.
If walmart were to say, "its a completed sale, its got a $500 sticker on it, its wasn't advertised as less anywhere else in the store the day you bought it, so no refunds; you were clearly appraised of the price at checkout, and you even signed your credit card slip" you'd probably throw a SCREAMING FIT.
Why is it ok to screw amazon, but a dirty sin if you get screwed?
Fwiw, I think amazon probably doesn't have a much of a legal leg to stand on in reclaiming the funds. However, they are indisputably in the right morally, and anyone that deliberately took advantage of this is morally bankrupt, doubly so if they aren't willing to make amends.
Reminds of a law & order episode, where some girl agreed to be a surrogate mother for a childless couple in exchage for cash, and then acts depressed and threatens to have abortion in order to extract additional money and gifts from the couple... turned out there's nothing actually illegal about that either...
I guess its ok then.
Sociopaths.
(PS The "you" in the analagies above refers to the people who took advantage of amazon, not the parent poster.)
Re:The wise customer (Score:4, Insightful)
Well, it could be argued that Jeff Bezos was the second gunman on the grassy knoll but that doesn't mean it's actually true.
In reality, though, every shopping cart that I've ever used or developed has a step, after shipping and tax is calculated, where the user is asked to confirm their purchase and authorize the sale. A similar step occurs in offline-processing, where the full amount is shown on the screen and you are asked to confirm, by either swiping your card and entering your pin, or by signing the receipt.
THIS is the step where you agree to the price and accept the terms. You couldn't possible agree and confirm a price before this step because it wouldn't include shipping/taxes.
And while IANAL, I believe that at this step, Amazon is responsible for their own mistake. They showed the user a price. The user was given a chance to say confirm his order and authorize charges. He did so.
This is a contract, it's been digitally signed.
Amazon is trying to make it so their mistake costs them nothing. That's certainly a nice fuzzy warm thing to think about, but in the real world, there is a price to pay for mistakes.
Re:The wise customer (Score:5, Insightful)
A price was agreed upon by both parties. If anyone is not being moral it's the person at Amazon who has decided to change the terms of the deal after the transaction has been completed.
The fact that the business failed because it was automated is a fault in theer business practice. It is not the fault of the customers. The customer can NOT know what the business has done or what deals the business has made, or what special promotions the business is running, or a myriad of other things.
If you got a notice right now saying you were undercharged 10,000 dollars for your car, would you pay?
Re:The wise customer (Score:4, Insightful)
Well, if I only paid $0.00 for it in the first place, I might expect to be asked to return the car or pay a fair price later.
I think the problem with Amazon's deal isn't really any different than walking into a store, taking something to the cashier, having the cashier just put it in a bag and leaving without paying. Even if the cashier says "just go ahead and take it", that doesn't make it right.
Taking advantage of a broken automated system isn't any more moral than stealing if you know the price isn't appropriate.
If an ATM gave you money and didn't deduct it from your account, would you tell the bank?
Re:The wise customer (Score:5, Funny)
It would even more like if Amazon.com advertised a 'buy one get one free' promo on box sets, but their shopping cart screwed up and didn't charge anything at all, and then several days later Amazon.com tried to buyers what they should have charged in the first place.
Re:The wise customer (Score:5, Insightful)
Another scenario: you order the DVD box sets from Amazon but a few weeks later (after the return window), you realize that you got charged too much for the purchase. Amazon refuses to refund the overcharge. Is Amazon right or wrong? After all, at the end of the transaction, you agreed to a price for the delivered goods.
It works both ways; if you expect Amazon (or any business or individual) to correct an error after the transaction that works in your favor, then you don't have any room to complain when the entity tries to correct an error after the fact in their favor.
Re:The wise customer (Score:5, Insightful)
Yes, lovely lovely contract law, which, when push comes to shove, really just says that a contract means what the two parties thought it means when they agreed to the contract.
If an American company and a British guy were to enter into a contract in which the American company were to provide boots to the British guy and the American company knew full well that the British guy thinks boots are those storage spaces at the back of automobiles, the American company would get in trouble if they shipped the guy a box of calf-high footwear.
Oh, but the contract says boots! Tough luck! Not quite. Amazingly, common sense would prevail.
If Amazon is offering a buy one, get one free sale and the customer knows that Amazon is offering a buy one, get one free sale then if the customer acts upon that sale, it doesn't matter so much what the contract (bill of sale) says, it MEANS that the customer is going to buy one and then get one free. There was simply an honest mistake in the contract. What becomes of such a thing?
1) If the customer knows the contract is a mistake and goes ahead with the intention of profiting, it borders on fraud.
2) If the customer doesn't realize that it is a mistake ("ooh I must be the lucky 100th buyer, I get both for free!"), then the contract is simply invalid. As you know, a contract is only valid once both sides receive appropriate consideration! Paying nothing or nearly nothing for $50+ worth of DVDs is not appropriate consideration.
Amazon is acting like a good corporation, assuming you are an honest person and asking you to either return the unopened DVDs to make it like the contract never happened or to pay the price they intended to charge you to make the contract a valid contract.
Consumer protection laws are not likely to come into play. First, they protect consumers acting in good faith. If you were to challenge credit card charges or cancel a card to avoid paying, who is going to believe you are acting in good faith? Certainly not a judge. Second, if you were to act like a proper citizen and take the high road while still maintaining that you should be entitled to the whole thing for free, Amazon is not going to pursue it very long. They have better things to do; they'll just refund your money and offer an apology.
Sale has already been completed (Score:4, Insightful)
If a guy sells his car while drunk for a small amount of money, or gambles it away while drunk, it's his fault entirely not the buyers.
Re:Sale has already been completed (Score:5, Informative)
This in particular is a clear case of Unjust Enrichment [wikipedia.org].
Re:Sale has already been completed (Score:5, Insightful)
I don't think it is. Unjust Enrichment would be if the customer agreed to pay $50, but Amazon only charged them $5. Then the customer would be obligated to pay the remaining $45 because both parties agreed on the price of $50.
In this case however, Amazon meant to charge $50, but only charged the customers $0.01. The customers didn't agree to $50, they agreed to $0.01. Since, at the time, both parties agreed to the price of $0.01, it doesn't matter if Amazon changes their mind after the fact, the deal's done.
Amazon's pissed they lost a lot of money, but they're not allowed to retroactively charge people extra. I think their only option is to treat it as a sunk cost and make sure it doesn't happen again.
Re:Sale has already been completed (Score:5, Insightful)
In your world, there is no honor system. You'd sneer and leave the resaurant without paying what you owe. You'd pat yourself on the back while the restaurant owner struggles to pay his workers and keep the doors open.
In my example, there is a moral choice on the table. I made it one wa and you made it the other way. Who is the better man?
Re:Sale has already been completed (Score:5, Funny)
Kintanon
Re:Sale has already been completed (Score:5, Insightful)
Re:Sale has already been completed (Score:4, Insightful)
Be honest and frank anyway.
---Mother Teresa
Can this possibly be legal? (Score:5, Interesting)
Re:Can this possibly be legal? (Score:4, Interesting)
Re:Can this possibly be legal? (Score:4, Informative)
Not new at all... (Score:4, Informative)
Re:Not new at all... (Score:5, Insightful)
Instead, they were VERY nice and gave $50 to each customer that they inconvenienced with this.
The customer was not 'responsible' for the mistake. The customers still had ample opportunity to cancel the order completely as it was still a pre-order and nothing had been shipped and very little time had passed.
Amazon did something completely different. They shipped a product to a person and THEN claimed the person owed them more money. Last I checked, it was illegal to ship something to someone for free and then charge them for it. It used to be a mail scam. (The difference there being that the customer didn't ask for it at all, though.) Amazon is clearly in the wrong every time they charge someone's card that didn't agree to it. BestBuy didn't do that.
Is that even legal? (Score:4, Informative)
Think about it this way: You go to Asda (or Wal-Mart or whatever) and buy something. If the supermarket decided that there was an error in the price, or found that their till has miscalculated some promotion in some way, could they come to your house and demand more money or the goods back? No, they couldn't.
As an interesting side point, the supermarket near me will effectively pay you to take home food from the reductions counter when their tills apply a promotional discount greater than the price the food has been reduced to! I don't think they'd have a leg to stand on if they demanded it back after the sale had completed.
Many similar cases exist (Score:5, Informative)
It is easy to suspect that Amazon did this on purpose.
In Sweden politicians are talking about writing a law that will basically give the cunsumers the right to keep whatever is sent to them, even if they never ordered it.
I sometimes order things from my Cable-TV/Internet-provider on their webpage. The conditions are often very unclear - to the point I suspect they are vague on purpose.
Re:Many similar cases exist (Score:5, Informative)
Re:Many similar cases exist (Score:5, Funny)
Re:Many similar cases exist (Score:4, Informative)
IF the item was unsolicted. The people who got two box sets for free solicited their products.
Don't use your "real" credit card. (Score:5, Informative)
Re:Welcome to the ME society. (Score:5, Insightful)
Re:Welcome to the ME society. (Score:4, Insightful)
Right and wrong aren't about assigning blame.
Re:Welcome to the ME society. (Score:5, Insightful)
Re:Fraud protection anyone? (Score:5, Informative)