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

Too good to be true?

[Kokuyo]

I don't know about US economic laws but in Switzerland, if something is obviously too good to be true and there has been a mistake, the company can actually declare any contracts made invalid.

Or if it's a real life product in a real life windows with a hilariously low price, the sales people are not obligated to make the sale at that price.

So if it's too good to be true you'll have to expect it to actually BE too good to be true.

The tough question just is: Is 55% off unrealistic?

Re:Too good to be true?

[Desipis]

The tough question just is: Is 55% off unrealistic?

Here in Oz we routinely get ads for rug stores with 90% off.

Re:Too good to be true?

[aussie_a]

So they get to continue to falsely advertise as much as they want, as long as the discount is low enough?

Now first time, sure its a mistake. Second time though? And only days later. They didn't double check and make sure it was right?

Re:Too good to be true?

[Enter the Shoggoth]

Actually the laws governing this are state determined by state government legistlation.

In NSW (where I live) it _used_ to be the case that retailers were obliged to sell at the advertised price, this was changed a decade or so ago.

Unfortunately, the consumer protection laws were comletely watered down; I can see the argument for a mistake in an advertisment, but the laws covering warranties are now effectively non-existent. If you have a problem during the warranty period the retailer can pass-the-buck onto the manufacturer or distributer and of course when they inevitably turn out to be in another state or country the only recourse you have is to file a civil suit.

I found this out the hard way, and was told by the NSW dept of consumer affairs (or whatever they call themselves these days) that they were unable to do anything other than contact the retailer on my behalf, the retailer told them to get stuffed, so they said the only way forward was to sue.

In Australia the retailer is obliged to honour any published price, even if the price is a mistake or a typo in the printing of a catalogue. Failure to do so will leave the retailer liable to legal action if enough people raise complaints to the ACCC.

Re:Too good to be true?

[LordLucless]

Dell is cheaper than Sun and IBM? Wow, what an endorsement.

Re:Too good to be true?

[calmofthestorm]

And you pay for what you get. All my dells (all laptops, all inspirons, all 3 of them) have died within a year of my buying them, and every month or so after that. To be fair, i always got the warranty so for medium-low reliability it works great: every time it breaks, Dell fixes it in a few days.

Eventually I got sick of a few days downtime very month or so on my primary system and just forked over the cash for a thinkpad.

It was a wise decision. I still see TPs around from six or seven years ago, still in working condition.

Then again, my usage profile is...nontypical. I don't drop it but I do carry it from place to place a lot. I wouldn't say I abuse it, but I do use it quite a bit. Inspiron is consumer grade, thinkpad is corporate grade.

Dell desktops, on the other hand, I've never been disappointed by.

Re:Too good to be true?

[AvitarX]

All of the consumer lines (I have owned) from every company have disappointed me.

This includes Macbooks, HPs, Dells, and IBMs.

Pretty consistently the business lines are decent, but you pay an extra couple hundred (worth it) spec for spec often.

Re:Too good to be true?

[houghi]

The same applies in Belgium. If it is obviously a human error, then there is no deal. This can happen if you forgot a 0 at the end and the car is only 10% of the value. It must however be blatantly obvious. e.g. a car for 5.000 instead of the standard 50.000 is obvious.

55% would not be seen as obvious and in Belgium they would be forced to deliver the PC at that price. There are sometimes PCs that are end of stock and can be had had reduced prices. Also you can not sell at a loss in Belgium unless it is the sales period, which is fixed.

Here you must even have a reasonable stock of said items. So you can not say 2EUR for this PC and then only have 1 PC just so you hope people will buy something else. This is what you get in a communist country where the law in principle sides with the people not the companies.

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

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.

Not True as per English Contract law

[freedom_india]

As per English Contract Law(which australia must be following), a publicly displayed advertisement for 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.
In short, Dell has signed a contract with each one of the paying customers to provide the advertised product at advertised price.
If Dell fails to do so, it is in violation of the applicable contract law and as such the counter-party to the contract may sue Dell for violation and subsequent consequential damages.
The fact that Dell claims it is a mistake is not relevant and is not the customers' responsibility.
All a customer has to do is to swear in front of a magistrate or sign a letter thathe acted in "Good faith" that the advertisement was genuine.
Dell Customers Australia: If you have placed the order, do NOT back out and accept a refund. Write to Dell to fulfill its contract and threaten it with a lawsuit. Am sure 200 lawsuits in 200 courts is not a small matter for Dell.
The law is on your side for a change.

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.

Sometimes right, sometimes wrong..

[Orphaze]

I think whether or not this is wrong depends entirely on whether or not money as changed hands at the time the error is noticed.

For instance, we would not consider a car dealership to be contractually bound to sell cars for $3000 a piece if a typo caused a zero to be left off the price in an advertisement. An advertisement or coupon simply does not constitute a contract.

In that same vein, I would argue that making an internet purchase is not a contract as well, or rather, at least not initially. Giving a company your credit information and clicking "Purchase" is not the same as handing another person cash and shaking hands, as that credit information must first be authorized and processed before money is actually transferred. Until that is done, the transaction (and hence, contract) has not been completed, and you the consumer aren't entitled to anything. Consequently, if an error is found at this stage, I see nothing wrong with a company cancelling the order in question.

If money is transferred, that is a whole different ball of wax. The deal is then done, and a business should be held to whatever price they stated. At that point they have taken your money, depriving you the use of it for anything else, and it is not acceptable for them to cancel the order simply because of their incompetence, anymore than they can call you up a month later and demand more money for an item you already purchased.

Story Poorly Worded, but 2nd link is 2008

[spaceturtle]

Dell has been caught red-faced: 2005
... apologized ... : 2008

This happened in Chile, twice this year

[diethelm]

This has happened here in Chile twice during 2008. In both cases Dell backed out of all sales, to great outrage. The second time it happened, I thought it was rather fishy; now that I see the same thing going on in Australia, it is starting to look like a corporate "marketing" policy.

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.