BlueLight (Kmart) screws up Mp3 player price.

April 20, 2001 6:45 AM

BlueLight (Kmart) screws up Mp3 player price. But refuses to honor order requests. The Nomad Mp3 normally lists for $299 but a glitch had it listed as $29.99. Word spread, and many ordered, but Bluelight is refusing to honor the orders. Is this right or wrong? Granted this was a glitch, but what about truth in advertising???
posted by da5id (46 comments total)

I think Bluelight should honor the orders. This happened a few years ago on jcrew.com when they listed a $180 sweater for $18 (or something like that). The company honored the $18 orders and then corrected the mistake. It's just good business: if you screw up, you pay the price.
posted by amyscoop at 6:59 AM on April 20, 2001

No, my understanding of it is that a pricing error of this kind doesn't have to be honored by the store.
posted by lagado at 6:59 AM on April 20, 2001

Oh come on, you really thought you'd get a $300 player for $30? What's also "good business" is not trying to screw a company for an honest mistake.
posted by mimi at 7:06 AM on April 20, 2001

I think K-Mart should be applauded for at least making a goodwill gesture towards the shoppers (20% off coupon... not bad) but, I'm very much on the fence with this one.

On one hand, K-Mart made a legit mistake. It's one that would cost them a relatively small chunk of change, in lieu of gaining many new customers. On the other hand, this has happened before and people should be wiser about it.

I suppose it lends itself to the "too good to be true" scenario. If this was Joe's Nomad Emporium and Cracker Shoppe Online, I'd be a little weary of such a low price. K-Mart is a name that people know, and thus, are more inclined to believe that the price is legit.
posted by hijinx at 7:08 AM on April 20, 2001

I was under the impression (here in Texas, at the very least) that it's against the law for the retail outlet to NOT honor the price. If a product is mispriced in the store, I believe they have to sell that product for that price--now mind you, they can be reeeeal picky ("oh, that ONE is mismarked? ok, you can have that ONE for said price"), but I don't see how this is different online.
posted by one.louder.ash! at 7:09 AM on April 20, 2001

Instead, BlueLight offered them the MP3 player for $274.99, which is the wholesale price that BlueLight pays.

On an item with a retail price of $299.99? I know Internet margins are thin, but I don't think they are that thin.

Since K-Mart is reintroducing the "blue light specials" with a series of TV ads, they ought to eat the cost with a limit of one per customer and use this into a marketing opportunity.
posted by rcade at 7:11 AM on April 20, 2001

If jcrew manufactured the sweaters, $18 was probably close to their cost, regardless of the $180 price. With consumer electronics the margins are very small. Bluelight's cost for the Nomad is around $280.

Selling a sweater at near cost is different than losing $250 per player. (incidentally, Kmart is offering the players at cost to those who were affected)
posted by cludwig at 7:12 AM on April 20, 2001

had this happened in a store, they'd have to honor the lower price.

even if it was an honest mistake, you still have to pay for your mistake. if ten thousand people take advantage of it, then it's the company's loss. caveat vendor.
posted by tolkhan at 7:14 AM on April 20, 2001

Didn't that just happen a few weeks ago with Amazon? Something about $4000 memory for $40?
posted by SpecialK at 7:15 AM on April 20, 2001

It is ridiculous for people to think they have a right to take advantage of a companies mistake.
posted by dancu at 7:16 AM on April 20, 2001

I agree with Mimi. My parents ran a small business, and if they made a mistake like this, they might be financially ruined. People have been ruined by the mega-store. Commerce has become a mad scramble for the best price, and there's barely any consideration of the consequences of the purchase. People wouldn't be doing this if it were a mom and pop store, but feel its ok because its K-Mart. But a mistake is a mistake, and K-Mart actually seems to have handled it well. Holy crap, did I just compliment K-Mart?
posted by Doug at 7:20 AM on April 20, 2001

I was curious about the legality of refusing to honor pricing errors in light of the FTC's bait-and-switch laws. According to this 1999 New York Times piece, in the U.S. it's handled by state laws that generally protect the rights of the merchant not to eat the cost when a mistake occurred.
posted by rcade at 7:25 AM on April 20, 2001

what i think is weird is the fact that there's not a legal disclaimer that i can find on the site anywhere. don't most companies that provide online goods/services have something like that?

price listed may not be actual purchase price. or *something*?
posted by centrs at 7:28 AM on April 20, 2001

Listen folks. If a store screws up on pricing in the real world they have to honor that price. It should be the same on the internet. If they can easily get away from honoring pricing mistakes what's to stop them from posting phony prices all the time to drive traffic to the site? Oh yeah that's right, huge corporations are just members of the big love fest that is the internet and will happily try no such tactic.
posted by @homer at 7:32 AM on April 20, 2001

For me, this all comes down to the store in question. Now, if WalMart screwed up , I would beat down the door till I got to the President, to get the price they advertised, since I dislike their practice of moving into small communities and shutting down Mom and Pops. But, KMart... Good ol KMart. The store that kept clothes on my back during my "white trash livin in a trailer house" youth... I might not try too hard.
An obvious honest mistake like this should not have to be honored, in my eyes.
Unless it's an escort service. In that case, by God, I am going to get my $3.00 date, instead of the $300 they meant to advertise.
posted by bradth27 at 7:50 AM on April 20, 2001

I know Internet margins are thin, but I don't think they are that thin.

This has nothing to do with the internet. Profit margins on consumer electronics -- computer-related ones, at least -- are very, very thin. I heard (from an employee) that Best Buy makes about $50-100 profit on every computer they sell.
posted by CrayDrygu at 7:56 AM on April 20, 2001

"Unless it's an escort service. In that case, by God, I am going to get my $3.00 date, instead of the $300 they meant to advertise."

Just don't think you're going to get more than a date for your $3. ;)
posted by CrayDrygu at 7:57 AM on April 20, 2001

Even if I did, I wouldn't tell. I mean, would you tell anyone you went out with a three dollar hooker?
posted by bradth27 at 8:00 AM on April 20, 2001

since I dislike their practice of moving into small communities and shutting down Mom and Pops: bradth27: Whoa, there...I don't care for Wal-Mart on an aesthetic level, but I absolutely defend their right to expand their business. Moving in on Ma & Pa Kettle? Hey - that's how society progresses. Might be a little bit of short-term pain, but in the long run, we all benefit. Consider: as much as I despise McDonald's service & food quality, it's often a blessing when they show up in a small community; it is a harbinger of growth, opportunity, and expansion for others in many cases.
posted by davidmsc at 8:02 AM on April 20, 2001

As long as there is clearly no bait-and-switch going on then I think they should be given a bit of slack for their mistake. The laws are intended to prevent just that - stores who would systematically advertise one price while actually offering another. It's not some random penalty - it's to prevent a really fraudulent practice that some businesses tried (and try still) to use.

But people are right - K-Mart really should go the extra mile to make sure people are happy - and a deep discount seems like a good way to do that.
posted by mikel at 8:12 AM on April 20, 2001

Actually, if you live in a small community, you really don't benefit all that much, in my opinion. I do live in one of those places...and all the friendly, helpful, knowledgeable employees of the Mom and Pops have been replaced with 16 year old kids with blue hair that can't tell you where the light bulbs are, and don't offer to even try to locate them..
Plus, the new "SuperDuper" Wal Marts are just too damn big, and half the time you can't find what you want, and are forced to buy something else as an alternative, because every other business in town is no longer around...and the closest large town, in my area, is around 80 miles away.
So that's how society progresses? Maybe we need to step back and evaluate this a minute....
posted by bradth27 at 8:16 AM on April 20, 2001

Amazon covers themselves against price mistakes with this notice in their help section:

Despite our best efforts, a small number of the more than 4.7 million items in our catalog are mispriced. Rest assured, however, that we verify prices as part of our shipping procedures.

If an item's correct price is lower than our stated price, we charge the lower amount and ship you the item.
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.
posted by xsquared-1 at 8:16 AM on April 20, 2001

Anyone remember the TiVo threads? They got a hell of a lot of free press for sending us our free machines, even though we got them due to a technical glitch. And when they ran out of their discontinued models, they gave us the deluxe ones. Very cool. No, legally, they didn't have to--there's always a loophole in the law that allows for such glitches, printer's errors, and the like. But TiVo got some loyal customers and great PR out of the deal (and I got a cool $200).
posted by MrMoonPie at 8:18 AM on April 20, 2001

I like threads like this where all the corporate apologists can come out to play. What is wrong with you people; who programmed you?
posted by Outlawyr at 8:21 AM on April 20, 2001

davidmsc: Might be a little bit of short-term pain, but in the long run, we all benefit.

How can you possibly say that with a straight face? See this thread for reference's sake. Please, there, tell me why homogenization is good.

obtopic: centrs points out the lack of pricing/error policy on the site. Could that score any legal points for the $30 player seekers?
posted by hijinx at 8:22 AM on April 20, 2001

This reminds me when I worked at a camera store in college. We sold every type of camera from the "point and shoots" to high-end SLR's. Customers always thought we were raking them over the coals on the high-end cameras, when our markup was usually only $20-$40 over cost. The point and shoots were where we made the money, just like with the JCrew clothing. Clothing notoriously has a high markup....just look at Nike.
posted by 120degrees at 8:31 AM on April 20, 2001

Yay, I'm just going to search MeFi for "homogenization" and chime in everywhere!

Actually this is an anecdote about the MegaNetCorp we all [or mostly] love to hate -- Priceline. I bid on a ticket and got it, no big deal. This was back before they told you what the final [plus taxes & fees] price was going to be before you clicked the "yes I can stomach it, hit me" button. However, the price the web site quoted me was $20 LESS than the price my confirmation email stated. Something about forgetting to add in the fuel tax. I called them a few times and they even said "oh, our web site has been broken for a few days, just ignore it, the price in the email is correct" I, too, looked all over for some sort of statement of responsibility from them on the web site and found nothing. So, I wrote a nasty letter with printouts of everything [circles and arrows on the backs of each one] to the corporate headquarters and they did wind up refunding me $25 but wrote me a carefully worded letter disavowing any responsibility for the screw up.

I mean sheesh, it's not like I could have gone to the office and spoken to a human. On the other hand, does anyone really deserve to have the right to be able to buy something based on an error like this? I figure if K-Mart can deal with the reputation for screwing up price tags, they can refuse to offer the deal.
posted by jessamyn at 8:40 AM on April 20, 2001

Fuel taxes. they get you every time. That pretty much does it for me. If Jessamyn said they don't have to pay, than they don't have to pay. after all, this is the gal that has nude librarians on her homepage.
posted by bradth27 at 8:50 AM on April 20, 2001

"Suppose ... a bidding contractor makes an offer to supply specified goods or to do specified work for a definitely named price, and that he was caused to name this price by an antecedent error of computation. If, before acceptance, the offeree knows, or has reason to know, that a material error has been made, he is seldom mean enough to accept; and if he does accept, the courts have no difficulty in throwing him out. He is not permitted 'to snap up' such an offer and profit thereby. If, without knowledge of the mistake and before any revocation, he has accepted the offer, it is natural for him to feel a sense of disappointment at not getting a good bargain, when the offeror insists on withdrawal; but a just and reasonable man will not insist upon profiting by the other's mistake. There are now many [legal] decisions to the effect that if the error was a substantial one and notice is given before the other party has made such a change of position that he cannot be put substantially in status quo, the bargain is voidable and recision will be decreed."
Corbin on Contracts, § 609 (1960).

This is a legal point (the Restatement of Contracts, the Uniform Commercial Code and many states concur with this rule) as well as a "moral" one.
posted by lawtalkinguy at 9:01 AM on April 20, 2001

The item was obviously mispriced. Hell, people ordered it because they knew it was mispriced and they could gripe and try to weasel a cheap MP3 player out of the situation. Sad, truly sad. In my ethics book, this is only slightly different than stealing.
posted by fleener at 9:10 AM on April 20, 2001

dude, why didn't anyone tell me about all the cheap stuff? there should so be a blog where those price screw-ups are linked. then everyone could get cheap goods!
posted by sugarfish at 9:16 AM on April 20, 2001

Buy.com did this with 21" monitors, and did a random drawing of everyone who placed an order to see who got the monitors. I didn't win.
posted by Mark at 9:32 AM on April 20, 2001

According to Findlaw's page on bait and switch tactics,

Bait and switch is illegal in most states and under federal law if the advertised model was never available in reasonable quantities. Stores are not necessarily bound by honest mistakes in newspaper ads, such as misprints....

Anyone feeling gypped by not getting their 90% off MP3 player can contact the Better Business Bureau. This is only effective, however, if other consumers ask the BBB in advance for their rating of the merchant; contrary to popular belief, the BBB has no enforcement capability other than peer pressure and its complaint database.

I'd forgotten, there is a BBBOnline, specifically to promote ethical business practices for online businesses (it operates as a portal for the various local/regional BBBs). They developed a code of online practices (around the same time as the 1999 Times article, when this was a big deal, all those $400 PCs and such). It doesn't explicitly address pricing errors, though; it suggests "Online merchants should comply with all commitments, representations, and other promises made to a customer."

Bluelight is a California-based company, from the registration, and the state consumer protection folks don't specifically address misprints.

I think the consensus is that you have to prove it was deliberately misleading to get legal relief. Otherwise, it's a gray area that falls under business reputation.
posted by dhartung at 9:34 AM on April 20, 2001

Congrats go out to bradth27, for providing the perfect example of the ad hominem argument.
posted by argybarg at 9:36 AM on April 20, 2001

all this uppitiness about the "real world". not the one where *I* live (although I'm sure yours is a very nice place to visit).

when I was sixteen I worked as a cashier at a grocery store that was built as a Bruno's and a couple months later became a Harris Teeter. I don't remember which ownership it was under when I was given this bit of advice, but I was distinctly told in a training session that "the customer is not always right". The example we were given was mispricing of meat-department items. Say steak priced at $1.29 a pound instead of $12.99 a pound. We were told that such a thing would be an obvious mistake and that if we caught it, it would be corrected.

Which isn't to say I haven't profited once or twice from this exact kind of mistake---bought a five-cent steak once at a Giant store and it tasted mighty fine. But, while I'm sure that laws vary from state to state, I can say that at least in South Carolina, there's no obligation for a store to honor a mispriced item, P.R. considerations aside.
posted by Sapphireblue at 9:41 AM on April 20, 2001

You must have misinterpreted my response. I made no negative comments against any one person in that link you provided. I value Jessamyn's opinion, and meant the comment to be taken in the highest regard. My apologies for not being more distinct. Please accept.
Now. on with it.
posted by bradth27 at 9:43 AM on April 20, 2001

All this talk about, "Well, if this happened in the real world, they'd have to honor the price."

Fine, then, but in the real world, we also pay sales taxes (in most states) on goods, which is rarely the case when buying online. If you want everything to be equal in the world, you have to take the good with the bad.

The fact is, this sort of thing is governed by each state's laws, and vary from state to state.

The moral thing to do is an honest person would point out the pricing mistake to the company, and the company would fix it. The company would then try to negotiate a compromise with their customers so that the consumers get a good (but reasonable and fair) price, and the company isn't taken to the cleaners for a legitimate mistake.

Substitute "ma-and-pa" Website for "Kmart" and as one poster noted, such a mistake might put them out of business. Do we have a greater right to be less moral as the company's size grows??

Crazy if true.
posted by yarf at 9:47 AM on April 20, 2001

If you were the one who did they typo, should the Company be the one selling their products as a loss??? Please, give me a break!!
posted by tonyramirez7 at 10:00 AM on April 20, 2001

Maybe y'all pay a lot more attention to mp3 players than I do, but I wouldn't think there was anything particularly strange about seeing one on sale for $29.99. Cheap, yes, but not unreasonably so - after all, you can get a mobile phone for twenty bucks these days, and I once picked up a CD-walkman for ten.

Contrary to the opinions asserted by several contributors to this thread, I think many of the people who tried to buy these players thought they had simply found a really good deal.

Ultimately, it's a question for the lawyers, and all we can do is argue about ethics.

Do we have a greater right to be less moral as the company's size grows??

No. You've got it backwards: we feel less obligation to forgive mistakes as the company grows. We often choose to extend grace to smaller companies, but it is not immoral to do otherwise.

Welcome to capitalism, folks. If you screw up, you go out of business.

-Mars
posted by Mars Saxman at 10:10 AM on April 20, 2001

If someone types "CRAP" instead of "CAP"....Therefore, What are they suppose to do...Capitalism???
posted by tonyramirez7 at 10:41 AM on April 20, 2001

davidmsc: Might be a little bit of short-term pain, but in the long run, we all benefit.

hijinx: How can you possibly say that with a straight face?

Because that is exactly how America has progressed over the last several decades. That is part of the cycle - the next part will be for Ma & Pa to realize that, despite the size and breadth of Wal-Mart, there is some niche that it is not filling, either in terms of service or product. Ma & Pa will then cater to said niche, expand their business accordingly, and the cycle will repeat. To summarize: short term pain when Wal-Mart comes to town - Ma & Pa may see business decline. Long term benefit - community gets more goods & services and is "incentivized" to create more of same in new & different ways. Life goes on, and people have more choices. Oh, yeah, about the $30 MP3 player: K-Mart is playing nice, but they could have been a bit nicer, IMHO, and I'd wager about 1/2 of those who attempted to purchase one were "legit" while the other 1/2 were trying to take advantage of an obvious error.
posted by davidmsc at 12:42 PM on April 20, 2001

Mars, well put...

This comment struck me like a blow to the side of the head with a wet Yorkshire Terrier:
It is ridiculous for people to think they have a right to take advantage of a companies mistake.

Perhaps people wouldn't feel that way if 99% of the time people make mistakes, corporate entities take advantage of it. It's the companies themselves that have created this environment, not the customers...
posted by fooljay at 12:48 PM on April 20, 2001

davidmsc: Ah, see, when you bring that statement into your entire argument, I agree with the concept purely on a business level (and perhaps a microsocietal level); environmentally, I still think it all stinks. But. Thanks for clarifying.

I'm off to buy a $40 TiBook, chao....
posted by hijinx at 12:59 PM on April 20, 2001

To summarize: short term pain when Wal-Mart comes to town - Ma & Pa may see business decline. Long term benefit - community gets more goods & services and is "incentivized" to create more of same in new & different ways. Life goes on, and people have more choices.

Do you live in a small town? Have you seen this work out this way? I have lived in many small communities all my life, and seen several Wal Marts move in....and have never seen this end result. What I have seen is more and more businesses shutting down, and Wal Mart being the ONLY choice.
Oh to hell with it. Never mind. What a stupid argument anyway.
posted by bradth27 at 1:03 PM on April 20, 2001

i work at kmart and i can tell you that if you come through the line with something that comes up lower than what it should be, we give it to you. period. however, there's a difference between online and real life sales. in real life, it's one item. you can run back and change the price in the computer, no problem, only one is gone for below cost. online, there are huge volumes of product going out without the real-world-check of a cashier. depending on the numbers of players, this could cause serious damage to the corporation. my kmart struggles every once in awhile, and we're probably the best store in the state. employees feel the crunch when someone walks off with a few stereos; our hours get cut.

kmart, at least my store, has been great about customer service. we offer price promise guarantee, very liberal return policies, we take the customer's word for it on price checks that are within about 30%, and our prices are pretty damn low to begin with. granted, they treat their *employees* a little worse, but i know that at least my branch has always made a sincere goal of working for the customer.

[oh my god, did i just defend my employer?!]
posted by pikachulolita at 1:53 PM on April 20, 2001

Back in the day, when I was studying Engineering, I took a mandatory Law 100 class. We were taught that all contracts consist of two parts: an offer and an acceptance. If an offer made by one party is accepted by the second party, the first is legally bound to follow through.

Most people use this to argue that a store must follow through with the sale - even if the offer was made in error - but, at least in Canada, that's not the way the contract goes down. The offer is actually made by the customer and not the store. The customer offers to purchase an item for a certain price (usually the advertised price^*) and it's up to the store to say "yay" or "nay". The store is not obligated to accept the offer.

Remember, this was from a introductory law class. I'd put only slightly more faith in it than I do in my Psych100 class. :)

^*There is nothing stopping you from offering less than the advertised price. I've often tried this and have had a fairly good success rate. Just make sure you ask a manager; regular staff members just give you funny looks.
posted by Monk at 6:45 PM on April 20, 2001