Amazon Adjusts Prices After Sales Error

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?"

Comments

The wise customer

[ktappe]

(Morality aside,) Wise customers either cancelled their credit cards or placed blocks on Amazon being able to charge them.

Re:The wise customer

[uglyduckling]

You cannot have a contract where one side gets nothing.

Amazon did get something: goodwill, which is a valuable commodity in business.

Incidentally, this used to happen all the time at a store where I lived in London. 30 minutes before closing they would drastically cut the price of their bakery goods, vegetables and other food that would spoil, sometimes to token vaules like 5 pence. The problem was, their billing system processed 'buy one get one free' by subtracting the value of the second item from the total of the bill. A friend of mine once managed to select the right combination of goods so that he became in credit at the till (because all of the second 'free' items were credited back at their original price) and was sent to pick up more goods because they wouldn't give him cash out of the drawer. They didn't change the system after that - we would always look for a few reduced goods with BOGOF to knock some money off the total. One thing I'm sure of: all of those were valid transactions.

Can this possibly be legal?

[Apocalypse111]

Ok, let me get this straight. Your online service, which you claim to test rigorously, fails to charge me. We (myself and your system) agree on a price for these goods ($0.00), you charge me for it, send me my merchandise, and now you're trying to make me give it back or pay more for it? IANAL but the legality of this seems rather dubious.

Re:Can this possibly be legal?

[RattFink]

I have posted this elsewhere by under the law there is a concept known as unjust enrichment. Basically if someone looses money by an honest mistake there is a legal obligation to return the money. Then again it's the moral thing to do, I don't see why people would get so upset over it.

will refuse the charge

[Gr8Apes]

All the consumer has to do is refuse the charge. Once charged, billed and shipped, the transaction is done.

Amazon committing a charge after the transaction has completed should be considered fraud and treated as such.

Re:will refuse the charge

[MoneyT]

But the deal wasnt two free box sets, the deal was BUY ONE (at regular price) and GET ONE free. This is more akin to you printing up a quote for something that's say $8001 and not realizing when you printed it out and handed it to your customer that the printer glitched and the middle line is missing from the 8 so the price reads $0001. Should your buyer be able to get away with taking advantage of the printer error? Why is it we piss and moan when companies act immoral and stick to the exact letter of laws and policies and then cheer and applaud when consumers do the same?

Re:will refuse the charge

[badasscat]

The buyer (customers) clearly knew that this deal was too good and an error. Any reasonable person would think so. In this case, the buyer is at fault for knowingly taking advantage of the seller (Amazon) and the seller's unintended sale at this discount. Any judge would find in favor of the seller in this situation.

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.

Re:will refuse the charge

[iabervon]

On the other hand, if somebody was actually charged nothing at all, the contract isn't valid, because a contract requires consideration on both sides. At that point, the customer doesn't actually own the DVDs; those are actually still Amazon's DVDs, which they've essentially misplaced. So Amazon has a right to ask for them back (paying shipping, presumably). If they charged the customer something, but less than they meant to, that's their problem, legally. If you get something for nothing, it has to be arranged as a gift, not as a contract. And, if you want to have a strong claim on ownership of something, you have to pay for it, which is why people sell each other used cars for $1 instead of not worrying about money (and the Feynman story about selling patents for a dollar, and demanding the dollar, etc). If you really want, you can sell something for a dollar and cancel the debt, but the deal itself has to not be entirely one-sided to be valid.

Re:Fraud protection anyone?

[julesh]

It is for this reason that fraud protection exists.

You're right, except you're forgetting that fraud protection laws also protect the merchant.

Not in this case, they don't. There is no legal way Amazon can charge these consumers: they quoted a price (whether mistakenly or intentionally, it doesn't matter, the price was quoted on their web site where anybody could see it), took payment, and delivered the goods. A contract was formed, and now Amazon are expecting the customers to honour a different one.

Tell me, what exact law did any of those customers break? Because the law Amazon are breaking is quite clear: by instructing their card acquirer to take additional payments from their customers, they are declaring that they have been authorized by the customer to do so, which is clearly untrue. They are therefore obtaining money by deception.

If the customer is legally in the wrong, then Amazon are free to pursue compensation in court. Trying to obtain it directly by themselves, however, is not a legally justifiable action.

Say this were brick-and mortar

[spun]

You go in to a big-box store. You see a special two-for one advertised and buy the products. When you get to the register the clerk mis-rings it, punching in the wrong amount. Do you A.) Politely notify the clerk of their mistake and pay the difference, or B.) Walk out knowing you just got away with not paying what you expected to.

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.