Guy Buys $3 Billion CD-ROM
from the economy-must-be-looking-up dept
There have been plenty of stories over the years of mispriced goods being found on various e-commerce sites. In the past, I recall stories about airline flights for $10 or computer monitors for $1. All of them were typos, and often the company behind them would deny the sales even as thousands rushed to buy. I never had a problem with companies denying such sales, but many insist that they should be enforced at the stated price. Last year, Taiwanese regulators forced Dell to live up the $15 price it accidentally posted on monitors to the 140,000 people who bought them. Whenever we write about these things people insist that, like in Taiwan, companies should be forced to honor the price.So I'm curious what people think when the situation is reversed. In an extreme example, a guy bought an obviously mispriced $3 billion CD-ROM on Amazon. Well, the full price was actually $2,875,934,133.57, but amazingly, it did not include shipping (and handling) which added an additional $3.99 to the bill. Of course, it didn't take long for Amazon to alert him that it was unable to complete his order and that he was not charged for it. But do the people who support forcing the retailer to honor the deal in the first case support it in stories like this as well?
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Filed Under: pricing, pricing mistakes
Companies: amazon
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but they are always the customer and you better recognize that little fact if you would like to keep them as a customer.
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Happy reading!
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No, because it should be skewed in favour of the consumer
The balance of power needs to be shifted back to the consumers through biased protection.
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Re: No, because it should be skewed in favour of the consumer
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Re: No, because it should be skewed in favour of the consumer
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So that line of logic doesn't work.
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Since with the Dell deals the customer was charged, the transaction was complete.
Imagine if you bought something at Best buy that costs $100 you bring it to the register and it rang up for $10, the worker didn't day anything and let you pay it. You grab your property and the manager tries to stop you at the door and asks for $90 bucks. Its your property as soon as you pay for it. you have the right to say screw you and walk out. Its their mistake for completing the transaction.
In the case of the CD drive its like grabbing something that was misshelved or mis-tagged, bringing it to the register and it ringing up as $3 mil more than you expected. You wouldn't buy it and you wouldn't be forced to..
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basically it's a bug in some software, no human error (or well it's programmer error not a typo)
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pricing mistakes
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Yes, the buyer should be forced to pay up.
cf. Bankruptcy Filings - As Ye Sow So Shall Ye Reap
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It is ridiculous how selfish our society is becoming. Too many people see mistakes made by retailers as something they can exploit in order to get what they want or need.
Its even more ridiculous when you're talking about a purchase made online where you don't spend any personal resources, and not even that much of your time. Even if you buy from a brick and mortar you might drive 10-50 miles and you're only out the gas. And in that case most of the retailers I deal with would compensate you in some way, like 10-15% off. On the same note, I have never ran into a situation where a reasonable mistake, like an item being priced with an old sale price, doesn't just get honored anyway.
And companies don't eat large losses like that, they just pass the cost on to the consumer. Bet those monitors got a little more expensive after that debacle.
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"What comes to mind for me: "The customer is always right.""
This to me is what is wrong with America. The customer is NOT always right. In fact, sometimes they are flat out wrong and dumb. This mentality is the underlying sense of entitlement that is destroying a once great nation.
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It wasn't me
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That's a contract. And it pisses people off when after the acceptance has been accepted... and after the buyer has been charged.... suddenly the seller backs out.
"But do the people who support forcing the retailer to honor the deal in the first case support it in stories like this as well?"
Mike, when making an analogy, you should at least attempt to be analogous. Was it possible for Dell to honor those mispriced items? Sure. Was it at all possible for the buyer of the CD to honor his purchase? Nope.
And this guy did not make a mistake to the seller's detriment. The seller did not rely on its own mistaken price in the same way that the buyers of the monitors relied on the low prices. The guy attempted to make the purchase solely to inform the seller of his or her mistake.
The more analogous example would be the seller mistakenly giving too much, i.e., raising the original offer with a higher counter offer. But that's not what happened here.
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Amazon would obviously refund the difference because they'd realize it was an error, but should they have to (as Dell was forced to honor the monitor price)?
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The _buyer_ makes the offer to buy, by plunking down money. The seller accepts or not. Here, the seller wisely declined the impossible offer, which was obviously premised on a mistake about the price. The mistake was probably mutual, meaning there was never an agreement on price. AT common law, this would mean that there was no contract at all (here, common law would not apply). If it were unilateral - only the buyer was wrong - the contract could be reformed to correct the mistake.
Incidentally, this sale was probably governed by the UCC. Had Amazon gone forward with the transaction without agreement on price, the contract would have been enforced at a "reasonable" price, which may have been deemed to be the price of the same product FOB the buyer's town. In other words, Amazon may have had to eat shipping.
As to whether seller's should be held to low advertised prices... the standard should be (and is) that seller's are required to make truthful claims in their advertising, and are required to exercise reasonable care and diligence in finding facts and declaring them. They ought not make deliberate mistatements, particularly for the purpose of attracting sales that they otherwise would have lost to a competitor. Holding seller's to stupid low prices solves the wrong problem by paying the wrong people the wrong amount. Buyers are hardly ever harmed by a typo, but competitors can be eviscerated by it. They are the ones to be made whole, not consumers.
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He should not be liable.
But I can see people abusing that situation on both ends(consumer and sellers).
I just don't think it is a big issue right now the abuse part from both parties.
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In UK Dell wouldn't be liable
There’s a bunch of consumer protection law to stop misleading advertising but in the case of a pretty obvious mistake the retailer isn’t obliged to accept the offer or complete the transaction.
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This case, transaction (funds transfer) never took place
Thus two senarios are not compareble
If Amazon had actually managed to get hold of the money would say the CD would have actually arrived
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Something like, If a price is mistakenly listed lower what it should cost and the customer orders it beliving that's what they'll be charged, but the store charges and ships the item a higher price, then the customer should be entitled to a refund of the difference.
If the store notices the price discrepency before the customer is charged and item shipped, then the store should be able to contact the customer and offer to either cancel the order without penalty or get the customer to agree to the higher price.
In this case, the customer's card transaction would have, at the very least, ended up being declined due to insufficient funds. If you try to purchase any item, even one at a more reasonable price, and your transaction is declined, then the sale just ends up being declined. You usually don't ultimately end up being chased for the money anyway.
I don't have an opinion on cases where the listed price is excessive, but still within the customer's limits, and the customer stupidly agrees to pay that much. This would be like the case of the $999 iPhone app, where I read at least one customer stupidly bought it thinking it was just a joke.
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One of these is not like the other...
Flight to Europe: $1500. Flight to Europe after a pricing error: $10. [location randomly chosen]
Cost of a CD after pricing error: $3 BILLION. Cost of a CD:
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What happens next?
The real question here is how did this guy not notice the price? I use one-click on Amazon, but I tend to notice the prices before I click the buy button. I would think a price that high would stand out just a bit.
I also wonder who downstream in the purchase process noticed this and did something about it. I would hope paypal or his credit card company would notice a charge that high and give the guy a call. I'm going to call my bank and ask them to put a hold on all charges over $10 million - just in case.
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Why shouldn't Dell honour the price ??
Secondly, $15 is not unheard of for a special offer. In the UK we have seen special offers of £10 transatlantic flights (offered by a vacuum cleaner company, it all went rather badly actually).
So do you claim that everyone was supposed to know this was a mistake ?
Thirdly, if you claim Dell should have not had to honour it, where do you draw the line. Suppose the correct price was $500 and they accidentally advertised $495 ? Do they get to claw back $5 from everyone ?
What constitutes an accident ? Being able to find a scapegoat employee to parade in front of the press and claim it was mistake ?
I think the only argument for the Dell defence is the suggestion that everyone who bought KNEW it was a mistake. But I've seen Amazon claiming 93% discounts on some items in recent weeks. (I suspect they were inflating original alleged prices). Am I supposed to not buy because it might be a mistake ? What constitutes an obvious mistake ?
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Not the first time Amazon has screwed up
Seems like an easy query run every day could catch this sort of thing. Just do a search for all items over a certain, reasonable limit and see if those items really should list for that much. It would be a little harder to catch under priced items though.
I for one don't think retailers should be held to the price as the consumers know it is a typo and try to take advantage. If you get the deal, good for you, but if you don't you shouldn't cry about it.
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options
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The listed price is what the retailer is willing to entertain as fair offer for the item.
You, the buyer, then offer to buy the item at recommended price.
The seller then can accept or reject your offer (refuse to sell to you). The seller could counter offer and the buyer could counter offer again... etc etc.
It is you, the buyer, that is initiating to contract to purchase. It is up to the seller to accept or reject your offer. The price tag is just something the seller does to help the buyer start of the negotiations with what the sell is typically willing to accept.
In this case the guy offered $3 billion for the CD-ROM. Amazon, as the seller, has the right to reject his offer. If the CD-ROM was listed as 0.01 cents by mistake then Amazon also has the right to reject the offered price from the seller.
This should tell you that anything and everything for sale is up for negotiations. The printed price on an item is the minimum offer the sales clerk will accept. Take to a manager or higher and they maybe authorized to accept a lower offer to purchase.
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Amazon affiliate
I sell Amazon affiliate items from my web store- imagine if he bought this after clicking through on my site and I checked my daily sales report..... break out the smelling salts!
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if the guy
same as the other way around. which in the UK is ilegal for a store to say that the price is wrong we want more money.
not sure in this case though as to legality.
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they should have to give it up
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umm....WTF???
What???!??! Since when?? Since when can a buyer NOT change his mind on a retail purchase and as for a refund? SINCE WHEN??
Think before you post.
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it was for the rewards
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Hmm...
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Slave labour
PAY man Pay up and stop be a coward!
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Others may not be so lucky
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