6pm.com's 1.6 million dollar pricing mistake

http://blogs.zappos.com/blogs/inside-zappos/2010/05/21/6pm-com-pricing-mistake

by failquicker • 16 years ago

138 80 16 years ago

blogs.zappos.com

ErrantX7• 16 years ago

Iirc there is not necessairily a legal requirement to honour those orders. So kudos to them for choosing to do so!

It falls under contract law, and yes they're required to honour those orders as it fulfils all the requirements of a contract. A mistake is no defence in civil proceedings for contract violation. Once you've 'purchased' an item, regardless of whether the money has been deducted from your credit card yet (Amazon charges on dispatch, but has to honour the price made at the point-of-sale) or not, you've both agreed to a contract to exchange a product for currency. A company not delivering a product is just like a customer not paying, only it's much easier to file a lawsuit against a company than an individual.

Considering they could have had to pay $1.6m + class action legal fees means they saved a lot of money by simply taking the loss.

jrockway9• 16 years ago

Pretty sure this is not true at all. If they take your money and do nothing, that's a problem. If they take your money, say "oh fuck, we don't have that item at that price anymore", and give you your money back, everything is fine. If they never take your money (as they don't charge you until they actually ship the order), then they have even less obligation.

What they probably can't do is ship you your stuff for $50, find the mistake a month later, and then silently charge your credit card the $500 difference. And they probably can't ask you to send the stuff back.

Lewisham• 16 years ago

This depends on the country.

If I remember my law class in the UK, there is no legal reason to ship the goods in this situation. The price online is only one that is offered. The buyer giving money to the retailer is considered an acceptance of the offer, but the contract is not binding unless the retailer then displays that they still wish to go ahead with the transaction on those terms. My lecturer always referred to it as the courts wanting to see "a meeting of minds."

This leaves online retailers (and brick and mortar that sticker an item wrong) the time to change anything before the item is placed in the buyer's hands, and the court will look particularly down on a transaction where the buyer could not have reasonably expected the transaction to be valid (like buying a TV for 1 GBP).

My understanding was that much of contract law in the US was based on UK law, but I am by no means a lawyer in either jurisdiction :)

ErrantX7• 16 years ago

I last had this discussion sometime last year when Argos did much the same mistake here in the UK - but cancelled the orders. At the time a contract lawyer weighed in and explained there were various caveats and so forth that allowed them to do this.

(certainly prior to taking the money then they are able to simply cancel the order at any time. After that I suppose it depends on the country/contract law involved)

idoh• 16 years ago

Just an FYI, here is the relevant terms and conditions:

"TYPOGRAPHICAL ERRORS

In the event a product is listed at an incorrect price or with incorrect information due to typographical error or error in pricing or product information received from our suppliers, we shall have the right to refuse or cancel any orders placed for product listed at the incorrect price. We shall have the right to refuse or cancel any such orders whether or not the order has been confirmed and your credit card charged. If your credit card has already been charged for the purchase and your order is canceled, we shall immediately issue a credit to your credit card account in the amount of the charge."

http://www.6pm.com/terms-of-use

If you are going to talk like a lawyer you should act like a lawyer and read the fine print.

johnthedebs• 16 years ago

Funny that they found the error at 6am.

dangoldin• 16 years ago

Good thing that they found it that early too. May have cost them a lot more if they found it later.

stretchwithme• 16 years ago

hmm, so maybe test driven development can actually save you big money

oldgregg• 16 years ago

Somebody really lucked out. http://www.6pm.com/dsquared2-boot-paragnosta-cusna-t-moro

naner• 16 years ago

God those are ugly.

rokhayakebe2• 16 years ago

Yeah, I was wondering if they actually made a mistake by buying it for that 49.99.

ErrantX7• 16 years ago

Agreed. But my girlfriend just gave me a 10 minute lecture on "How You Have No Taste" :) so what do we know.

prodigal_erik• 16 years ago

It's hard to believe that charging over a thousand dollars for a single pair of boots is not a mistake. Especially when they wouldn't look out of place on Regretsy.

mitjak3• 16 years ago

Dsquared isn't for those on student loans (or are?) but just wait until H&M pushes those on us for under $30. Fashion lacking copyright helps push innovation and stay away from bankruptcy.

aidenn0• 16 years ago

good PR vs $1.6M and bad PR. Any doubt what the zappos people would do?

jbarciauskas• 16 years ago

Sounds like a $1.6 million unplanned marketing event. I'd bet it pays off better than $1.6 million in traditional advertising.

ericz• 16 years ago

Not really. A bunch of people got great deals but the blog post is from two days ago and I've yet to see any coverage in traditional media outlets. It seems like $1.6 million can buy much better exposure.

hga• 16 years ago

Two days ago was a Friday, I think it's a little early to judge the outcome of this.

clistctrl• 16 years ago

I had not even heard of the site before it was posted here. I'm almost ready to check out with a decent order.

minouye• 16 years ago

No question that 1.6MM could definitely buy much more exposure (the end goal of this exposure being customer acquisition and sales). Don't get me wrong, they did the right thing--however, this is no "happy accident".

barmstrong• 16 years ago

Yep - we did a Zappos tour last week and judging from their culture they would view this as a great marketing expense in addition to "the right thing to do".

Also it's not fair to judge it by major media exposure because:

1. The people who got those deals will generate word of mouth

2. If they hadn't honored it it would have generated negative word of mouth

Gotta factor those two in.

megablast• 16 years ago

Yes, but word of mouth is incredibly hard to measure. (twitter and social media helps a bit in this regard) What you can measure is broad media exposure, so this is what you look at as a measure.

dhuck• 16 years ago

could it have been an intentionally planned ... mistake?

coryl2• 16 years ago

noooo freakin way, amazon.com would never let that kind of stuff happen.

zachbeane• 16 years ago

In mid-2007, Amazon.ca listed Lisp in Small Pieces, an $85 textbook, for $3.95. A guy I know ordered it at that price and it was fulfilled without incident, so I posted it to my blog at http://xach.livejournal.com/133661.html - it quickly became the #1 seller on Amazon.ca for the day. Amazon cancelled the orders and gave everyone a $10 credit.

jrockway9• 16 years ago

Technically, he did say "amazon.com" would never let that happen.

coryl2• 16 years ago

I tried buying a PSP kit that was mis-priced around Christmas time. They cancelled it and didn't give me so much as an apology or regret, citing their terms of service policy.

Also, what with the downvotes...

matt1• 16 years ago

Anyone want to venture a guess as far as what kind of bug would cause a price cap like this?

modeless• 16 years ago

Perhaps they meant to cap prices at 5 thousand dollars but it turned out to be 5 thousand cents instead?

jrockway9• 16 years ago

if price > $49.95 { price = $49.95 }

crystalis• 16 years ago

Excellent job, you've satisfied the narrow confines of the literal request while offering no insight into the actual thought processes or features that might lead to the bug.

TrevorBramble2• 16 years ago

Michael: "I must've put a decimal point in the wrong place or something. ----, I always do that. I always mess up some mundane detail."

Peter: "Oh! Well, this is not a mundane detail, Michael!"

Michael: "Hey, quit getting pissed at me. Alright? This was all your idea, ---hole!"

Peter: "Alright, okay, alright, let's try not to get pissed off at each other. Alright? Let's just calm down, let's try to figure this thing out together."

jrockway9• 16 years ago

Pretty sure you can say "fuck" and "asshole" on the Internet.

waterlesscloud• 16 years ago

Wild guess would be they were using price limits to categorize. In other words, using "under $50" for various product or promotional listings.

It's hard to imagine how that would end up repricing items though. Without a total blanking out moment in the programmer's head, anyway, which I'm sure we've all been guilty of.

lenni• 16 years ago

I really don't wanna be that developer or DBA whose lack of attention caused this. I work for an online retailer and obviously we live in fear of self-inflicted downtime. (That said, no business likes downtime)

tyn• 16 years ago

An UPDATE sql statement with a forgotten WHERE clause

rlpb• 16 years ago

It does annoy me that the WHERE clause has to go at the end. I usually end up typing the WHERE clause first when working live on something important.

Same with rm -Rf /foo/bar. There's a moment when pressing enter will do the wrong thing. I usually use relative paths to avoid this, but I have had to repair the damage for someone who actually managed to rm -Rf / by accident due to this.

robryan• 16 years ago

Doubt it, I'm really careful with updates and usually I only have a few hours work between me and fixing a mistake like that, not a million dollars. Maybe a certain discount was applying to everything, more likely that every actual price being changed in the db.

burke• 16 years ago

Something along the lines of this, abstracted away a few layers, would be my guess.

    def build_query()
      "UPDATE prices SET price=4995 #{where_clause}"
    end
    def where_clause() # only set prices on products in our group of stuff to sell
      return "oops, I'm accidentally an empty string"
    end

Unfortunate bug causes method to fail silently, program does not crash, instead performs unfortunately incorrect query.

kqueue• 16 years ago

Consider it a good advertisement.

mikecane• 16 years ago

Those of you looking at this and commenting are missing the number one question: Are you in business to just make money or to have customers? There is a very big difference there. How many of you have been "loyal" customers only to get screwed? And how really small and mean was that screwing compared to the future business you would have given that company -- and compared to the business you once did with that company?

bonsaitree• 16 years ago

Silver lining.

Until today I had not ever heard about 6pm.com.

Due solely to their mistake, this post, and their honor, I'll be sure and check them out for future purchases.

wmblaettler• 16 years ago

I was thinking the same thing. And I even spent that last 10 minutes perusing their site. I don't know if this publicity was worth 1.6 million in the long run, but I believe it will bring in more sales than if it had not occurred. I am even tempted to pass this site along to my wife (the big shopper in our household).

hnote• 16 years ago

1.6 million dollar loss is equivalent to 15% of Zappos' profit for the last year (cf. SEC filing http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol...). We shall see how this "materially important event" finds its way into Amazon's next 8-K SEC filing - investors have the right to know...

boredguy8• 16 years ago

I had a similar experience at Nalgene: they had published an internal 50% off staff promotion coupon. That coupon made it to slickdeals.net, and lots of people bought lots of goods. Nalgene honored the purchases.

The difference: what Zappos noticed in the course of six hours, Nalgene didn't notice from about Saturday afternoon 'till Monday morning.

ck2• 16 years ago

Try getting Amazon.com to honor ANY price mistake.

In 10 years of shopping, it's never happened.

zackattack• 16 years ago

I got a ton of free toys and board games through ToysRUs.com (powered by the Amazon.com site) when I was in high school. Someone on the SomethingAwful forums had discovered a magic coupon code and we all benefited pretty nicely.

6pm.com's 1.6 million dollar pricing mistake

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