Robert Bernard just wanted to buy his wife a nice present for their anniversary. As he was paging through the Macy’s catalog, he found a deal: A diamond necklace that normally sold for $1,500 on sale for $47.
Thinking it was probably too good to be true, Bernard drove to Macy’s. Sure enough, the store was actually selling the necklace for $47.
Unfortunately for him, the person ahead of him in line bought the store’s entire stock.
The clerk was apologetic and offered to sell him two of the necklaces and have them shipped to his house. And you can probably guess what happened next. Macy’s caught the pricing error — it should have been on sale for $479 — and canceled his order despite him having a receipt for the purchase.
So what’s Bernard to do?
While I’m sure our resident lawyers will poke holes in this, in general, basic contract law requires three things for the contract to be considered complete: (1) offer of sale; (2) acceptance of the offer by the buyer; and, (3) consideration in the form of payment. So in general, after having paid for the item, and once you have left the store or the item is delivered, the item belongs to you.
Up until that point, it depends.
Consumer pricing law varies not only by country but, in the U.S., also by state. The National Institute of Standards and Technology has taken the time to consolidate the laws of all 50 states into one document.
Another great source for those of us without a law degree is Consumer Reports and its consumer rights page. The one time that courts generally agree that a retailer can void the contract is when the customer knew that it was a pricing error at the time of purchase, like the person in front of Bernard at the store. When this occurs, it’s considered a mutual mistake nullifying the contract. So, in a retail environment, in general, a store has up until it accepts your payment to discover a pricing error.
Unfortunately for the consumer, this isn’t true online.
Most websites now include language in their Terms and Conditions that allow the cancellation of orders with pricing errors even after payment is made. Some legal sites in the UK have actually recommended that online retailers change the very nature of the online purchasing contract by essentially having the terms and conditions state that an order is conditional on the merchant accepting it. This means the buyer, not the seller, is making the offer of sale regardless of what price is listed on the website.
So what do you do if you’re caught by a pricing error?
If it’s already yours, you’re probably in the clear.
If you already have an item, the retailer has little recourse as long as you made the purchase “innocently” and not as the result of a posting on your favorite forum.
One word: Screenshot!
If you ordered an item online, read the terms and conditions on the website to make sure that they included the language allowing them to cancel your order. If the language is missing, it’s time to take a screenshot and appeal to a higher authority at the company.
For a retail purchase, know your local laws.
Some require that the retailer honor its in-store pricing.
Be nice. If you don’t have your purchase, appeal to a higher authority.
The odds are their website terms are going to allow them to cancel your order, so now is not the time to make threats. Now is the time to appeal to a company’s customer service and reputation. It’s one of those times when a loyalty program can work in your favor.
If all else fails, appeal to your lawmakers.
Let’s face it: They are always looking for a good story to attach to a bill. You may be able to work to get legislation passed that keeps online retailers from rewriting basic contract law and changing the terms of a contract after accepting payment.
Ultimately Bernard’s wife lost out on her necklace. Macy’s wouldn’t honor the purchase for any of the customers that had ordered but not received the necklace according to local reporters who followed up with Macy’s. If nothing else, Macy’s gave merchants a lesson on how not to handle mistakes like this. The order was cancelled by voicemail and Macy’s failed to perform any sort or service recovery.