When an advertised price isn’t right, who has to pay?

INLSA

A Vodacom cellphone contract upgrade that sounded too good to be true, was, but after reviewing the conversation with the call centre agent, the company decided to honour the deal. Picture: Leon Nicholas

It’s a scenario which angers, frustrates and spawns conspiracy theories in consumers: the “sorry, the advertised price or offer was a mistake” story.

It’s true that genuine advertising mistakes do happen, and it’s also true that companies have been known to deliberately advertise a bargain deal they don’t intend to honour – at all or only to an appropriate number of people – to lure customers through their doors.

This is called bait marketing, and it’s a no-no in terms of the Consumer Protection Act.

But the CPA does give retailers an “out” in terms of honouring prices which are obvious mistakes.

It states: “If a price as displayed contains an inadvertent and obvious error, the supplier is not bound by it, after correcting the error in the displayed price, and taking reasonable steps to inform consumers to whom the erroneous price may have been displayed of the error and the correct price.”

The issue is also dealt with under the law of contract.

One party must make a firm offer to another, which may be accepted or rejected.

When an incorrect price is discovered, the store owner has the right to refuse to accept the offer of payment from a customer, so no contract is formed.

Clearly, the way a retailer handles these “wrong price” situations can make or break the consumer’s relationship with the brand.

Take these three recent cases:

Case 1: Watch those website prices

A few weeks ago, Dennis and Sharon Cooke began shopping around for heart-rate monitors online.

The prices of the two monitors they were after were both R200 cheaper at Due South in Lynnwood, Pretoria, than anywhere else, so they drove to the store to buy them.

“But when we got there we were told the prices on the website were wrong, and the actual prices were the same as their competitors,” said Sharon.

They voiced their unhappiness about this at the store, but, Cooke says, “since we’d driven there especially for the monitors, there seemed no point in wasting time and petrol to buy them elsewhere, so we bought them there”.

Afterwards Dennis e-mailed Due South’s head office and says he got “fobbed off”.

It went like this: “Apologies that there was a discrepancy with the prices. We are in the process of updating our products online, and have also prioritised a website revamp to ensure that the prices are updated every 24 hours … and that they are correct.

“In the meantime though, we have a legal disclaimer stating on each product that products are subject to availability and prices listed on our website are subject to change without notice.”

The Cookes were not impressed. “This ultimately is not about the money, but more about the fact that we feel they misled us with false advertising on their website,” they told Consumer Alert.

I asked The Foschini Group, why Due South’s store management was not empowered to issue a discretionary discount in such cases.

The group’s corporate communications manager, Kathryn Sakalis, said the prices on the websites were accurate “99.9 percent of the time”, but mistakes happened on occasion.

“But while we are covered by our disclaimers on every product page on the website, this is ultimately not a legal issue, but a customer service one,” she said. “What the store in case should have done, is immediately escalate this issue to their senior field manager, who would have been able to deal with the price discrepancy appropriately.

“This issue will definitely be raised with the Lynnwood branch, so that should a similar incident ever occur again, it can be dealt with in a more appropriate manner.”

The Cookes have since been contacted by the The Foschini Group Sports marketing director, who apologised, thanked them for their custom and offered to refund them R400.

The Cookes were delighted. “A sincere apology is always most appreciated,” Sharon Cooke said. “Thank you.”

Case 2: Oops! What a difference a nought makes

This is one of those very obvious advertising mistakes in which DionWired advertised a package – MacBook Air laptop, iPad 2 and Thule Attaché carry bag – for just R1 500.

When Graeme Findlay phoned a DionWired store about the offer, he was told there was a printing error in the catalogue and the price of that bundle of techno goodies was actually R15 000.

“I was offered a R500 discount on the correct price, or a R300 gift voucher to compensate for the inconvenience caused, plus I was told they’d put out new brochures with the correct price and a correction on their website,” Findlay said.

“I am a bit disappointed and do not know my rights as to whether they should have been liable to give me the goods at the price marked in their catalogue or not,” he said.

Findlay went on to accept the R300 voucher.

A nice gesture on the part of DionWired, considering no reasonable person would have expected to buy that bundle for just R1 500.

Case 3: Too good to be true

This is not the first complaint I’ve had about a third-party company phoning a consumer up out of the blue to sell them a “sounds too good to be true” cellphone deal.

Denver Orange told Consumer Alert he was called by a telesales agent on behalf of The Rewards Company last October, offering him a Vodacom cellphone contract “upgrade”.

The deal was a Top Up 315 contract, with a Samsung S2 and a Galaxy Tablet 7500 for R290 a month over 24 months, including R315 worth of airtime a month and no extra charges for the handset.

“This definitely sounded far too good,” Orange said, “so I approached Vodacom in Eastgate Shopping Centre, to confirm that the company offering the deal was legitimate and that they could offer the deal.”

He asked a Vodacom employee to speak to the Rewards Company telesales agent to confirm the deal, and that done, he agreed.

The handset and tablet were duly delivered, but Orange’s bill revealed an extra charge of R290 for the handset.

He queried this with The Rewards Company in early January, and was told the telesales agent had “made an error” and that the contract couldn’t be honoured as it was offered to him, as that was not what Vodacom was offering.

Orange was not prepared to pay any more than he’d agreed to, so he was told the contract would be cancelled and the additional charges he paid for the handset refunded to him.

“So now I’m expected to give back the phone and tablet and all the applications I’ve downloaded will be lost,” he told Consumer Alert.

Now, of course, had Orange misheard the deal and agreed to it, no amount of “I made a mistake, please cancel my contract” pleas from him would have led to Vodacom letting him off the hook.

So given that he went to quite a bit of trouble to check out the “too good to be true” offer before accepting it, I argued to Vodacom that the deal should be honoured, if a recording of that telesales call backs up his case. Vodacom’s Nomsa Thusi got back to me to say that the sales agent did indeed “make a mistake”.

“We have reviewed our training processes to ensure that a similar mistake does not occur, and we’ll honour the agreement as per the amount agreed on the original call and refund the customer for additional payments made.”