Dell, Inc. (NASDAQ: DELL) recently faced something many e-tailers encounter in daily business: a pricing mishap on one of its web sites. In this case, it offered a large computer monitor for under $20 and a full-fledged $2,000 laptop for under $600. When customers started pouring in by the thousands to take advantage of the pricing errors, Dell simply canceled the orders, drawing outcry from Taiwan's Fair Trade Commission.
As such, the computer retailing behemoth promptly took down its Taiwanese web site until it could figure out how the pricing errors occurred and how to prevent them in the future. The fact is this: pricing errors do happen (just ask Amazon). But unfair consumers begin taking advantage, and then unfair authorities start yapping about "fair trade" as well. If Dell disclaimed that, yes -- pricing errors can happen and we reserve the right to cancel orders therein -- what's the beef here?
To expect 100% pricing accuracy all the time -- anywhere -- is ludicrous. Although Dell's errors here were high-profile, should every pricing mishap from an online retailer mean that the retailer has to honor the error and lose a gob of profit in the process?
Apparently, that's what Taiwan authorities believe -- or the company will face possible fines. No wonder Dell temporarily shut its Taiwanese online storefront -- to prevent more cheapskates from ordering anything else that might have a pricing error. With Dell spending $10 billion in Taiwan for parts and services every year, the mutual relationship wasn't reciprocal in this case in any form.
To expect 100% pricing accuracy all the time -- anywhere -- is ludicrous. Although Dell's errors here were high-profile, should every pricing mishap from an online retailer mean that the retailer has to honor the error and lose a gob of profit in the process?
Apparently, that's what Taiwan authorities believe -- or the company will face possible fines. No wonder Dell temporarily shut its Taiwanese online storefront -- to prevent more cheapskates from ordering anything else that might have a pricing error. With Dell spending $10 billion in Taiwan for parts and services every year, the mutual relationship wasn't reciprocal in this case in any form.
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Reader Comments (Page 1 of 1)
7-10-2009 @ 12:11PM
Dan Barnett said...
Okay Brian,
You tell me where "deep discount" leaves off and where "pricing error" begins. Or is it merely at the whim of the seller. Allowing him to draw attention to his site & cancel any orders he doesn't feel offer enough for his product?
7-10-2009 @ 12:35PM
j0nd4m4n said...
I went to a online car shopping site years ago and saw a car that I really liked at a great price, after making appointment with the car dealer ship selling the car, the owner realized that he had mark the online price wrong. Instead of the sales price, he put the trade-in price. However, he honor the price and offer the car at trade-in value to me. This kind of behavior builds trust and relationship to the seller.
Furthermore, if a retailer in local stores such as Target and Wal-Mart have to honor the price of a product if they labeled the price wrong, why shouldn't online retailer?
20Mil for a online pricing mistake is a lot to swallow for Dell, but in the end, the consumer did nothing wrong.