Online business Toolkit

Amazon hit by pricing error

Tags:
Amazon,
E-commerce

Michael Singer CNET News

Published: 07 Oct 2005 10:35 BST

Some customers looking for a good deal on an LCD TV at Amazon.com this week are now staring at a blank wall, in the latest high-profile e-commerce gaffe.

Due to apparent pricing error, the company has cancelled all orders for a Samsung LNR409D 40-inch LCD TV advertised and sold for $1,899 (£1,071) on 4 October. The Web site now shows the old price slashed out, with a new price of $2,954.99 from Amazon partner Vann's and $3,699.99 from Crutchfield &mdash an increase of as much as 95 percent.

The television, which comes with a high-definition-grade 1366 by 768 pixel resolution, a built-in HDTV tuner and a 170-degree viewing angle, sells for a similar price range on other retail sites.

Customers were notified via email that the company could not complete the delivery because the price of the television was originally incorrectly displayed. Amazon.com's Customer Service Department apologized for the inconvenience and cited Amazon's pricing policy, which is posted on the company's help section.

"At any given time, despite our best efforts, a small number of the millions of items on our site may be mispriced," Amazon says in its written policy. "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."

While incorrect pricing does happen from time to time in the online retail industry, several customers expressed anger and dismay at Amazon's handling of the situation. "We sold our TV because we thought we were going to get this 40" Samsung LCD through Amazon. I don't know why Amazon did not honour the order, they cancelled my order without any notification. Now I'm sitting at home without TV," customer Willy Khusyonny wrote on the site.

An Amazon customer known as "Music lover" in California was similarly riled.

"This, of course, after I received the email confirming my order," Music lover wrote on Amazon. "In any brick and mortar store, you'd pay the advertised price and walk out with the merchandise, even if they screwed up the price. Apparently this does not apply to big online merchants."

R. Hiltz wrote: "Amazon said we posted wrong price, now won't honour order. Sent an e-mail that said 'sorry we posted wrong price... your order has been cancelled'. How convenient!!! Of course no offer of anything for my inconvenience!...very poor business practice."

An Amazon representative said the company adheres to its posted policies but is looking into answering the complaints beyond the automated responses sent to customers.

Last month, UK retailer Argos refused to honour thousands of orders after accidentally offering a TV-DVD combo device for 49p on its Web site.

Legal experts agreed that Argos was within its rights, having covered itself with solid terms and conditions.