Amazon Erases Orders To Cover Up Pricing Mistake

The Knife writes "Amazon secretly canceled orders for a large jazz CD set after realizing that it had mis-priced the item at $31 instead of its MSRP of $499. At first, inventory shortages caused the online merchant to string customers along for over a month after they placed their orders. But when Amazon realized that the box set was under-priced by $470, it simply erased all records of customers' order in their account history. No emails were sent to customers informing them of the price change or of the order cancellation. Probably because it violates Amazon's highly publicized price guarantee policy. A customer who called to complain and request the CD set at the $31 price was given a $20 discount off of his next Amazon order." A caveat: there is no external confirmation that Amazon did what is claimed here.

Comments

Bad Summary.

[adam]

Probably because it violates Amazon's highly publicized price guarantee policy

Gee, let's check amazon's price guarantee policy and see what it says at the bottom...

Despite our best efforts, a small number of the items in our catalog may be mispriced. If an item's correct price is higher than our stated price, we will, at our discretion, either contact you for instructions before shipping or cancel your order and notify you of such cancellation.

So, um, basically, their policy allows for them to cancel orders at their discretion. Which is approximately what it said in 2001, when I placed an order for 4 plasma TVs they had priced at $27/each. A few days later, they cancelled my order (along with the others of several others I know who were hoping for cheap TVs!). This has happened many times before with Amazon-- although by many I mean "several, that I am aware of," which is probably really good, considering the sheer volume of sales Amazon does. So, basically, nothing to see here.. move along. The product was priced incorrectly, they didn't charge anyone, they cancelled the orders. This is common practice for Amazon and other merchants.

Re:Bad Summary.

[phillips321]

You missed the point! Order's were canceled and the customer was not informed about it. Amazon's policy clearly states:
"and notify you of such cancellation"

Re:Bad Summary.

[sentientbeing]

Shopper: '...You hadn't exactly gone out of your way to call attention to the cancellation notices had you? I mean like actually telling anyone or anything.'

Amazon: 'But the cancelled sales were on display...'

Shopper: 'On display? I eventually had to go down to the cellar to find them.'

Amazon: 'That's the display department.'

Shopper: 'With a torch.'

Amazon: 'Ah, well the lights had probably gone.'

Shopper: 'So had the stairs.'

Amazon: 'But look you found the notice didn't you?'

Shopper: 'Yes,' said the buyer, 'yes I did. It was on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying "Beware of The Leopard'

Re:Bad Summary.

[Valdrax]

Your points are all really irrelevant to whether or not they performed the contract. Harm, for purposes of recovery, is the difference between the price listed and the next best price. Also, an industry standard practice of not living up to one's contracts is generally not held to be a legal excuse for not doing so if someone calls you on it.

Also, a contract of this sort is generally considered to be binding when the site gives you order confirmation, and you submit it. At that point, offer and acceptance has been had (even under the older UCC Article 2). The time at which they charge you or not is irrelevant in this situation.

The question essentially is, "Was there a breach of contract?" Since we've established that there was one, the question of whether deleting an order without sending you a message is a breach needs to be answered. Most likely (not knowing any further information about their ordering policies), it seems like there would be one under the notification rule the earlier poster made.

However, It's really a tempest in a teacup because no one is likely to sue them for it, and without a print-out of the order confirmation, there's no evidence the contract was ever made. Courts are unlikely to allow people to claim phantom orders on websites without any proof, and most states would make you go to small claims court for damages this small (which wouldn't allow you the discovery necessary to make Amazon.com cough up the proof that they did it). For a mere $350 bucks, most sane people wouldn't bother.

Re:Bad Summary.

[jasonwc]

Well, you're jumping to conclusions. The fact that there was a breach of contract doesn't mean that the buyer can recover for the contract price - the next best available price. You point out that once there has been an offer and acceptance, a binding contract is created and Amazon is unable to repudiate. While that is true, the contract clearly allowed Amazon to cancel a buyer's order if the price was set incorrectly which certainly was the case here. Thus, Amazon was justified in its cancellation of the buyers' orders. If there was a breach, it was only the failure to notify the buyer of the order cancellation. I'm not sure from the contract terms whether a court would find there was a breach. The terms may be read as suggesting Amazon's current policy of notification rather than binding themselves to do so. In any event, a buyer would not be able to recover for the contract price - the best available price because that does not reflect the damages actually suffered. The buyer's expectation damages ought to put him in the position he would have been in had the contract been performed. Since Amazon's only failure was to notify him of the order cancellation, damages should be assessed based on the harm which resulted from lack of notification. In addition, it seems pretty clear in context that when UCC 2-711 speaks of the sellers failure to make delivery, it's referring to an unjustified refusal, rather than a justified refusal combined with a relatively minor breach. In the instant case, a court would likely award nominal damages due to the lack of any clear harm to the buyer.

Furthermore, the measure of damages had there been an unjustified refusal to make delivery would be based on the difference between the market price of the good at the time when the buyer learned of the breach and the contract price (2-713) or in the alternative, the buyer could "cover" by buying the item at another retailer and sue for the difference between the contract price and the purchase price of the replacement (2-712). Cover doesn't even require that the price be the "next best price" - only that it is made in good faith and without unreasonable delay. This may very well exceed the market price if the buyer wants the item immediately and is willing to pay a higher price for the convenience of a local retailer.

Re:Bad Summary.

[baboo_jackal]

Actually, this reminds me more of the people who stand at the register and argue with the manager, "But it was on the 99-cent rack, so you *have* to sell it to me for 99 cents!"

Fortunately, those people don't know about Slashdot yet...

Re:Bad Summary.

[Dogtanian]

You must be a first year law student Valdrax. If he was, he'd still be better-qualified to talk about how the law works than 99.9% of the people contributing to this and similar Slashdot discussions.

The problem is that although some people here probably know what they're talking about, it's hard to judge which ones they are without spending more time than it's worth sorting them out from the undeclared IANALs. (Skip to the final paragraph for the main point minus the waffle).

You have to ask yourself- what level of knowledge is this person arguing from? Do they even understand the basics of what they're discussing? If so, do they understand the finer points and exceptions that apply to "corner cases" such as this one? Unless you already know the law pretty well (I don't), it's often impossible to judge- and whilst I'm no expert and don't pretend to be one, I don't intend to be a blind man being led by another overconfident but equally blind man.

In all honesty, *any* Slashdot discussion about the finer points of law will quickly become an intellectual wankfest that mixes up basic misunderstanding, myths, attempts to reason out what the law actually is (*1) and assumptions that the way the law *should* be is the way that it actually is. (*2)

The law does have intellectual consistency, but not in the way that Slashdot-style pseudo-logic can be applied to it. Otherwise, engineers would make great lawyers and vice versa.

(*1) No, you can't always logically deduce what the law actually is through logic- particularly not corner cases. The law is what the law is, even when it doesn't always make sense. It's an example of the conceit that you can apply geek/engineer-style logic to any field. In a way, this is the same point as *2 below.

(*2) Yes, the law sometimes sucks and is stupid- and it's perfectly valid to discuss its flaws and how it should behave. But the fact remains- you *can't* assume that the way it *should* be, or even the way that "common sense" (or some convoluted pseudo-intellectual Slashdot argument) says it should be is the way that it actually is.

To cut the above short, threads like this are basically useless for shedding light rather than heat, because the majority of contributors are IANALs who'll try to (incorrectly) apply pseudo-logical reason to cover their lack of legal expertise.

Re:Bad Summary.

[joto]

False advertising is false advertising and as such is fraudulent. I wonder if Amazon had overpriced items would they voluntarily give the money back.

They don't have to. All you need to do is to send your item back, and you will get your money back. As all reputable online vendors, they have a full money-back guarantee.

Besides, there's a big difference between false advertizing, and human error. This was most likely human error. Apart from the fact that there's no way amazon can make money from deleting customer orders, or prizing items so low they are guaranteed to lose a significant amount of money (and getting nothing in return), there is no indication that this is a systematic thing that amazon does often or deliberately.

Hanlon's razor states: "Never attribute to malice that which can be adequately explained by stupidity". I think that should tell you enough. Someone amazon employee screwed up. Naturally, when the screwup is discovered, they fix it up, to avoid taking a big loss. That's all there is to it.

Re:Bad Summary.

[Ecuador]

No, YOU missed the point. The article is simple libel. I ordered the Jazz set at $30 (I saw it on the FatWallet forum), knowing that it would probably cancel, and sure enough I did get the cancellation email Saturday morning. Ok, it is unusual that the order does not appear in my order history, but it wasn't a "real" order anyway.
I hate it when idiots complain about such things when Amazon has the best retail policies - their price guarrantee and their free returns have saved me a lot of money and woe.
I remember a little over a year ago I had bought a home theater amplifier on sale. But since I was to move shortly I never opened it until I was settled at the new appartment, bought speakers etc... It turned out to be about 5 months later when I opened it and found out it had a small problem. Amazon takes care of returns during the first month, so I had to go through the manufacturer. The manufacturer asked me to ship the (heavy) item - on my own cost of course, it would then be evaluated and a replacement, if needed, would ship out in 2-3 weeks. I wrote to amazon and politely explained my predicament and whether they would be able to help me, and two days later I had a replacement amp on my doorstep (I have prime so shipping is always 2-days), and a prepaid UPS voucher to send back the original amp on my cost. I have many other examples of good customer service from Amazon, but I believe this was quite indicative.
The linked article was simply written by someone who is upset he didn't manage to get a freebie from a large retailer. This even happens to be the retailer with the best policies (which do state that price mistakes cannot be honored - duh!). Shame to the ./ editor for picking up this trash.

External Confirmation?

[KingSkippus]

A caveat: there is no external confirmation that Amazon did what is claimed here.

External confirmation? I don't even see any internal confirmation. The one link in the submission goes to the item on Amazon.com's site, at which there is one glowing five-star rated customer review. As far as I can tell, this submitter simply wrote up something that may or may not be a complete fabrication with absolutely zero backing evidence, without even so much as a "here's my blog article about the experience," and somehow it make the front page.

Where's the screenshot of the item being offered for $31? Where's the printout of the placed order? Who were those customers that Amazon strung along for over a month, and where are they complaining? Was there even more than one? Was there even one? What "highly publicized price guarantee policy?" Are you talking about? This one, which Slate describes as "not something Amazon publicizes?" You are aware that companies don't have to honor prices that are obvious misprints, right? (And that a 75-CD limited edition import CD set being sold for $31 is an obivous misprint, right?)

Man, next time I have a beef with some company, remind me to completely make some shit up about them and post it as an article here on Slashdot. I'm usually not one to gripe about the job the editorial staff does here, but you guys really drop the ball in a major way on this one. Whether you like Amazon.com or not, with nothing to back it up, this borders on outright libel.

Re:External Confirmation?

[phillips321]

Well here's the proof from google cache: http://forumpix.co.uk/i.php?I=1202631583
And here's the corrected mistake afterwards: http://forumpix.co.uk/i.php?I=1202631639

Re:External Confirmation?

[pjotrb123]

Even though I think the submitter is totally whining for nothing, the Google cache claim by grandparent is accurate.

Google query: http://www.google.com/search?hl=en&q=site%3Awww.amazon.com+inurl%3AB00005RSB2+Jazz+import+box
Locate the URL that is in the summary and then click "Cached" right below it.

Please check your facts before posting.
And here's hoping that the Google cache doesn't update too soon or I'll get flamed ;-)

See the Google cache

[Anonymous Coward]

The pricing error seems to be borne out by a cached Google page. http://209.85.173.104/search?q=cache:MFzDQFSwSUkJ:www.amazon.com/Jazz-Paris-Various-Artists/dp/B00005RSB2+Jazz+in+Paris+%5BBOX+SET%5D+%5BIMPORT%5D+%5BLIMITED+EDITION%5D&hl=en&ct=clnk&cd=1&gl=us How they handle this error by honoring what they advertise or by using a clause somewhere in their legal text to disavow pricing errors remains to be seen.

Kill this article: referral

[Solder Fumes]

Not only is there no confirmation of this beyond what some guy wrote in an email to Slashdot, the Amazon link contains a referral ID which should make someone some money if anyone buys the jazz cd set as a result of clicking on the link. This is pretty dishonest and the complaint could be completely false, and has NO place on Slashdot's front page.

So???

[EdIII]

Even if this was true, and verified independently by many sources.... so what??

If you honestly thought it was 30$ to begin with and made the order and were charged for it, then you might have something to complain about it. I still think Amazon would be right to cancel the order and refund your money. So you may have been inconvenienced, but a 20$ discount demonstrates some pretty respectable behavior from Amazon.

It's a little ridiculous to expect Amazon to eat thousands of dollars in losses over an error on their website. Maybe it's just common sense, or being raised right, but when you think somebody is making a mistake and you profit from it, that is just WRONG. If you knew it was worth 10 times that price and it was a simple mistake, how moral is it to purchase it?

I have had plenty of stupid teenagers that can not do math correctly give me my change incorrectly. I have even given a 100$ bill to a girl, who gave me 130$ BACK.

The last time I had a situation like that was at CompUSA. I bought a few Motorola routers and access points and was surprised when all of them rang up for 19.99$ each. I brought it up to the clerk, got the manager, and explained that it looked like a mistake and that the labels actually said a different price. The manager, shockingly, acted like a complete dick and stated that he had no control over the information in the databases and could not do anything for me. They was not any in stock anywhere else, so I ended up getting them for my client anyways.

The point was that I TRIED to deal with them fairly. On another note, maybe that is why CompUSA went out of business.

riiiight

[Anonymous Coward]

and the customer was not informed about it

according to the oh-so-thorough summary that has ZERO links (except for one to amazon's own site with the $499 price). this summary smells a lot like someone who ordered the "$30" set from amazon in bad faith, hoping they wouldn't notice the mistake and $500 worth of CDs would show up a few weeks later. when the order was cancelled, off to slashdot they ran, hoping to stir up some sentiment against amazon. Now, maybe Amazon really DIDNT notify the customer(s) in this case, but in other publicised examples (as well as anecdotally in the grandparentpost) they *DID* do so.. so without evidence that they violated their own policy (which, by the way, is just a policy.. until they charge your credit card no contract exists), they're entitled to the benefit of the doubt.

Amazon's just fine here...

[ChePibe]

I'm a law student... just a student... NOT a lawyer, and certainly not your lawyer, so nothing here is legal advice, period. I am not qualified to give legal advice, so I'm not giving it and cannot, in fact, even do so. Speak to a qualified professional about these matters, NOT ME.

(This is all assuming, of course, that there is an actual problem here.)

If I'm remembering first year contracts properly, then there's no problem here with Amazon refusing to sell at the price it listed.

A contract must have a few things to come into existence, generally: offer, acceptance, consideration.

Advertisements and catalog listings suffer from an "over-subscription problem" and are not considered firm offers themselves and, therefore, cannot simply be "accepted" by a consumer who makes an order. Ads are generally treated as invitations to deal unless they require something special on top of just showing up (i.e. being the first in line). The consumer's order, however, is considered an offer, which can be rejected by the seller by either refusing to provide goods and refunding money in a timely fashion or refusing to accept the money in the first place. This is done to protect merchants from themselves (people shouldn't be able to walk away with huge windfalls because a $5.00/hr clerk forgot a zero) and to protect their advertisers from them (newspapers shouldn't be held accountable for giving people windfalls for much the same reason). It's just good public policy, and prevents the games of "gotcha".

I see why some people are whining, but from a legal standpoint (again, I am not providing legal advice and I'm only a student - I could be 100% wrong on this and would welcome correction), Amazon has done nothing wrong in simply deleting the orders and refunding any money already sent.

I don't see anything out of the ordinary here...

[Monsterdog]

I used to be on a board that tracked amazon pricing errors -- picked up quite a few items for next to nothing that way. They used to play along and make good on such orders, but it got to the point where it was costing them so much and causing such disruptiveness that they changed the policy, and mispriced orders now are usually canceled. That's been in effect for at least the last five years. They don't always notify the buyer -- which I think is a customer service issue where people fall through the cracks -- and they only rarely offer a make-nice like a gift certificate.

New Slashdot Effect

[bagsc]

People who viewed "Jazz in Paris" bought:
Jazz in Paris 1%
Linux in a Nutshell 55%
Understanding the Linux Kernel 12%
Running Weblogs with Slash 7%

Cancellation email

[Ecuador]

Oh, and in case there is doubt about the cancellation email, this is what I got:

Greetings from Amazon.com.

We regret to inform you that an error caused the following item(s) to
be displayed at an incorrect price:

Jazz in Paris

In accordance with our posted policies on pricing, we are unable to
offer this item for the incorrectly posted price. Therefore, we have
cancelled your order for this item.

At any given time, despite our best efforts, a small number of the
millions of items on our site may be mispriced. We do, however, verify
prices as part of our shipping procedures. If we discover that an
item's correct price is higher than our stated price, we will, at our
discretion, either contact you for instructions before shipping or
cancel your order and notify you of such cancellation. This policy is
posted in the Help section and is accessible through numerous other
areas of our web site.

We apologize for any inconvenience this may cause.

We value your business and hope that you will give us a chance to
serve you again in the future.

Sincerely,

Customer Service Department
Amazon.com

Please note: this e-mail was sent from a notification-only address
that cannot accept incoming e-mail. Please do not reply to this
message.