In AU, Dodgy Dell Deal Faces Consumer Backlash

Ben Seberry writes "It appears Dell has been caught red-faced by yet another pricing mistake on their Australian website. Many customers thought they had spotted a fantastic deal when they came across a 55%-off offer. Dell later denied that this was a valid special and telephoned customers to offer them a choice of the standard price, or a cancelled order. Dell's senior manager of corporate communication came out and apologized for the mistake, promising processes would be reviewed to prevent it from happening again. In the days after the original 'incorrectly priced' offer was fixed, Dell made a different error leading to an even cheaper price being advertised. This time, on many user forums and blogs, users are debating Australian contract law as it applies to this matter — it is not as clear-cut as many originally believed."

Comments

My experience

[Circlotron]

I live in Melbourne, Australia. A well known consumer test magazine here, Choice, said about 20 years ago that an advertised or store-posted price was only "an invitation to enter into a contract of sale" and was not binding on the seller. That said, it is fairly common for most larger shops to give you the item at the advertised price when it is incorrect (i.e low). I once got six pieces of wood from a hardware shop that were marked at $4 each instead of $11 each. They pointed this out to me at the checkout and after checking that the rest of their stock was also marked at this price (not just mine ;-) ) gave it to me at this low price anyway.

Re:My experience

[Richard_at_work]

Its called 'invitation to treat', and exists right up until the point at which money is taken, but neither party is obligated to enter into a purchase contract - after that point (money taken), it gets legally more complicated and the 'obviously wrong' defence comes into play.

Makes me think of a story...

[snicho99]

A little off topic perhaps... but it make's me think of a story a friend told me once:

Hungry Jacks (Australian version of Burger King) once had a promotion going where if you asked for "Two for One" they gave you two Whoppers (a kind of inedible burger) for the price of one. The only catch was that someone at the marketing company forgot to assign an end date to the promo on all the advertising material. Consequently even now - many years later, Hungry Jacks' still has to honor the "Two for One" deal.

Me and a friend called BS on his story, and he was quite insistent that it was real. We were just on our way from one bar to another at the time (a little inebriated perhaps) so we went into a Hungry Jacks store to test his theory. He ordered a Whopper as a "Two for One", and sure enough they gave it to him!

Mind you by the time he got to the front of the queue he had 16 drunk football (australian rules) players chanting "Two for one" so perhaps they just gave it to him to make us leave....

But if it was *genuine* makes you think that maybe us australians are pretty serious about keeping companies honest about their marketing.

Re:Not True as per English Contract law

[caluml]

a product/service displaying a price for the same becomes a contract when it is accepted by anyone who pays for the same product/service to the advertiser.

I guess it all hangs on whether Dell accepted the money from the consumers at the time of ordering, or if it was to be debited when the goods shipped.

Re:Not True as per English Contract law

[sam0737]

What? From what I have learned - Hong Kong law, which is still based on English Contract Law...

Advertisement is not an "offer." (Made by a case in 18xx IIRC).
The case was something like someone saw a product advertisement on newspapers, then go to the store but unfortunately the product went out of stock. The customer sue the store for not able to fulfill the contract, even if the customer can pay to accept it.

The case was held that advertisement does not consider as an offer. It's the customer who "offer" the money then the store "accept" the deal.

So I think what grandparent said is true, if Dell didn't accept the money (by processing the credit card I suppose), it should be considered "accepted" in current understandings. Whether or not the court will make a new case about "automatic processing" does not consider as an "acceptance" is another issue.

Re:Too good to be true?

[JWSmythe]

I would normally say "it's an Acer", but if you do a little research, you'll find something interesting about WalMart products. Virtually every product in WalMart, is made specifically for WalMart. They are made slightly cheaper so WalMart can lower the final cost and always undercut their competition.

    I found this out with Sony HandCams. One place I worked had about a dozen of them for live web broadcasting (make assumptions, you're probably right). Two broke, so we went to a Sony authorized repair shop. He looked at them, or more specifically at the model, and heard our complaint. He then told us "I can't fix that". He wasn't trying to be difficult, so he explained that this model was a WalMart model. The broken component was something that breaks very quickly. He can't get replacements for it. If it had been another model from another retail outlet, he would have been more than happy to fix it, but it probably wouldn't have broken anyways.

    We had saved $50/ea on them. If I recall correctly even though they were simply sitting on tripods, attached by RCA cable to digitizers, 90% of them had some sort of failure within a year. I took one of the few surviving ones, just because we retired all of them. I left it charging on my desk, and one day it just started opening the tape door on it's own. I could close it, and sometime in the next few days it would just open it like someone hit the eject button.

    If you want something that will survive, don't buy it at WalMart, even if it looks just like the item being sold somewhere else, and only has a very subtle variation on the model number. WalMart makes their money selling crap at a price lower than the other stores can sell their slightly better crap. They know when it breaks, you will probably go back to WalMart and buy another one, blaming the manufacturer, not WalMart business practices.

    Read this story about Snapper discontinuing business with WalMart

    or this Business Week piece on lower quality Walmart products

Laws? What about goodwill?

[dpbsmith]

My mom worked in retail during the 1930s and 40s, eventually rising to the position of buyer in Bloomingdale's. She said that retailers were not legally bound to honor misprints, but that the policy of Bloomingdale's (and its competitors) was to honor them, without question, because they would rather take a one-time loss on a single item than lose a customer.

This is not about the law, this is about decency and keeping promises and doing the right thing by customers.

I know that there is currently a management fad to try to identify "bad" (i.e. lower-profit) customers, and deliberately annoy them in hope of losing them. As the bad economic times start to bite in, I think they will find that treating customers as easily-replaced disposables is not a good idea.