November 7, 2013
Walmart.com Can’t Live With Glitchy Prices
Stuff happens. It’s a basic fact anyone involved with operating a website knows. Amazon.com knows it, eBay does, the U.S. government certainly does and so too does Walmart.
Yesterday, an unexpected glitch on Walmart.com caused prices on some items to drop dramatically. The retailer first, apparently, fixed the problem but was then left to figure out the resulting damage and a response to customers who took advantage of the deals that, as it turns out, were too good to be true.
Internet Retailer reported that news of Walmart’s low prices hit social sites yesterday, including one deal on a Cricut Expression 2 Electronic Cutting Machine for $4.80. The deal advertised a savings of $244.20. The same item, which was later listed as out-of-stock on the site, has a price of $224.10 currently on Walmart.com.
By last night, Walmart appears to have determined who received unintended rollbacks and sent an email apologizing for the problem and cancelling their orders. The company said it would send anyone inconvenienced by the glitch a $10 e-gift card via e-mail for them to use on a future order.
Not everyone is happy with Walmart’s response. Lila Ecker, a Walmart.com shopper from Grand Rapids, MI, told WOOD TV 8, "If you go to the store and something is marked wrong on the shelf, they will sell it to you for that price. So shouldn’t they do the same thing online? I think so."
BrainTrust
Recent Discussions
Discussion Questions
What do you think Walmart should have done in light of the pricing mistake on its site? What do you think the retailer will have learned from this experience?
Poll
I think they did the right thing by canceling, apologizing, and sending along a gift certificate. This has happened to airlines (as one example) and everybody gets that you don’t fly to Hawaii for $1.
To add a point, Walmart does have a disclaimer to cover this situation – of course, nobody ever reads it, but you can see it here.
First, I think a $10 gift certificate is tacky. It suggests that Walmart believes cancelling orders is a trivial occurrence and slight inconvenience to the shopper. It’s not. Even $15 has some heft to it. It doesn’t seem as though that decision was thought through. It is more likely that it was a “let’s get them off our backs” reaction.
The lesson is to have a qualifier on the website, something like….”From time to time we’ll post a deal that looks too good to be true. It probably is because of some human error. In that situation we’ll quickly post a correction and unfortunately have to cancel any associated orders. However, when that occurs we’ll try to make up for your inconvenience as best we can.” In the future if there is an error Walmart can point out their disclaimer and still try to make up for the inconvenience in a way shoppers will find satisfactory. There may be some best practice ideas among airlines that have to deal with inconvenienced customers on a more regular basis.
Of course I thought that most ecommerce sites and FSIs have such a statement.
Walmart should have either honored the prices or given a larger gift card. Sooner or later every retailer will have problems with its website, just as they can have problems in-store. Address the problem with a sense of humor and then do right by the consumer.
Walmart took the correct action. While disappointed that they did not receive at savings of some 98% on the price of goods, the consumer knows the real deal.
You don’t give away the store merely because a mistake was made. You own up to it, apologize, offer a small incentive, and move on. The late, brilliant economist, Julian Simon, encouraged airlines in the late 1980s to offer flyers to step aside for a later flight and receive a modest compensation for doing so. There was not a need to cover the entire ticket.
The consumer understood the situation, and stepped aside without much fanfare. That saved the airlines billions of dollars, and it avoided the inevitable class action lawsuits from the sharks.
Big difference between one customer seeing a mistake in a store and receiving the misquoted price, and thousands of customers jumping on the mistake online. Common sense has to prevail here. And, Walmart and other retailers have to have a planned response prepared, and a system to check that proper pricing is in place for online offers.
Walmart did the right thing.
Walmart was correct in cancelling the orders and they did the right thing by offering a gift card to the consumers who ordered the items. It saddens me to see how some people in our culture will pounce on any mistake and greedily scoop up a “deal” that they know can’t possibly be correct. Those who want more than a good faith token of appreciation are probably the very people who feel “entitled” to jump on an error!
All retailer’s need to have a check system that reviews their pricing offerings prior to release to the public. Their systems could also have an alert that signals abnormal purchases (i.e. the 50 kayaks bought by one customer) as a secondary back up.
I think cancel and gift certificate was just fine. I doubt a single one of the people who ordered the obviously incorrectly priced product didn’t feel at least a little “sneaky” in taking advantage of an honest mistake. Feel sorry for the IT system owner who left out some kind of price validation rule in allowing the “honest” mistake to happen in the first place. With all the no doubt, super intelligent systems that are in place over price optimization, even a basic edit routine should have caught this one.
Walmart did the right thing to cancel the order, but the way they handled it is the bigger question. The goal is to make the customer want to come back. Gift cards, discount coupons, etc., may do the job. Maybe a personal call is in order, followed with an email or newsletter that includes an apology and a thank you. Most people know before the order the price is probably a mistake. A good customer service rep can turn this debacle into a positive interaction if handled properly.
Only Walmart would think this is okay. Isn’t there some kind of law that dictates (absent the caveat pointed out by Joan) that if you offer to sell something and someone buys it, you’re obligated? If there isn’t there sure as heck should be.
Walmart has really gotten in the habit of throwing its weight around. It’s time that someone took the company to task for it. But who, with any kind of power has the courage to do so? No one.
Hmmm…let’s see…we have a retailer that is doing millions of dollars an hour through their .com and they make a mistake. So they issue a $10 e-card. Huh? If I was Target, Kohl’s, JCP, etc., I’d match those cards 2 to 1 on credits on my .com site. And make out like a bandit on customer satisfaction.
I don’t think Walmart took this situation lightly. It was embarrassing to them, but I also don’t think it made sense to give the merchandise away. I have to wonder if the pricing error had occurred in-store what the decision would have been. Something tells me the consumer would have gotten the lower price. What we don’t know is how many shoppers were impacted by the pricing errors online; it is likely far greater than what the impact would have been in the physical store.
Walmart doesn’t need bad PR and the likely cost of honoring the items that were sold is likely barely a blip in comparison to their total revenue. Bite the bullet, do the right thing and honor the sales. It will be cheaper than paying for that kind of positive PR.
Unfortunately, I don’t think the retailer will have learned anything from this experience.
WM will, of course, ignore the nonsense chatter of the Ms. Eckers of the world…as it should; I think they deserve plaudits for quickly discovering the problem and going above-and-beyond in the compensation. What will they learn? Mistakes happen, and when you have (literally) billions of customers and the mistakes happen online, things can become a disaster very quickly.
In such cases where the pricing glitch is so dramatic as the example in the article, I think it reasonable to cancel the order and provide a discount for the inconvenience. However, a $10 gift card is likely not enough of a peace offering in this situation to tame the disappointment of the purchaser.
In addition, shoppers that take advantage of obvious mistakes and then become indignant when the merchant does not honor the offer, share some blame as well. Reasonable people understand that honest mistakes happen from time to time and should acknowledge that when such huge mistakes occur and not expect hundreds of dollars of free merchandise.
Mistakes happen, and this is embarrassing.
The response in this type of situation is subjective and should be advantageous to the retailer – it is a business. In this case, the price differential is huge and the attempted purchasers knew it was a mistake (plenty of internet postings promoting the glitch to other crafters).
I think Walmart’s response was appropriate. Moreover, the mistake raised the awareness of Walmart as a purchasing option to craft aficionados. I think consumers understand fairness and while this will be disappointing to consumers who thought they had a steal (literally), there will not be long-term adverse effects.
I like the idea of calling customers and trying to turn lemons into lemonade – both with individual customers and via word of mouth. A good customer service person could say, hey, this was a mistake, and we will honor it if you like. Or, we could instead give you this 10% VIP discount for a year and would love you to tell your friends and family about your Walmart.com experiences.
I’ll take the second question first. What did they learn? I don’t think they care. Tomorrow, it will be all but forgotten with the exception of just the few customers impacted.
What should they have done? In light of everything going on with “healthcare.gov” they could have made a huge splash and been overwhelmed with positive publicity by doing the unexpected. Walmart could have personally delivered the item to each one of their homes by a team of Walmart associates. The message could have been “We make it right, no matter what!”
Huge opportunity lost.
As they say, timing is everything. For Walmart, this will be lost in other news and it in no way compares to the major failure of another website. Nevertheless, they missed a chance for a very inexpensive advertising bonanza!
Treasure Hunt! Here’s the disclaimer: “From time to time, pricing errors appear on our website. We try to watch them closely, but usually our customers find them first. When they do, we always honor the advertised price.”
What a great way to attract customers to the site and encourage them to spend a lot of time there. WM could manage the “mistakes” by choosing the items (closeouts, etc.) and determining the deep discounts.
I agree with Scanner, WM should have honored the sales that occurred, despite the mistaken pricing.
Walmart responded appropriately. They apologized, cancelled the order and offered a $10 gift card. But no response will completely pacify those people who want every unplanned benefit caused by a retailer’s mistake.
As consumers we have become part of an unforgiving group. But as voters we forgive the government for its mistakes. That’s paradoxical. Think about it.
What have we learned? Retail oxen (retailers) may need goring for their mistakes, but never gore my (customers) ox. Today we are part of a more opportunistic society and retailers are usually willing endure that reality due to the highly competitive pace vs. concentrating on how to turn grapes into vintage wine rather than dried raisins.
Hopefully Walmart will make lemonade out of lemons. Perhaps this foul up will actually draw more consumers to the website looking for bargains. Walmart did the right thing.
Lila Ecker is somewhat correct. If an item is priced wrong on a store shelf, many times the retailer will offer to sell at that price. There are some exceptions: The price was modified by a customer or outside the store source, the store also can not sell certain items below cost like liquor or sell items below msrp like nintendos or iPhones as the price is regulated.
The article does not explain the glitch.
Walmart is being pretty cheap about it if it is just a team member input error. If they can not sell the item at that price for what ever reason, I would say a $100 gift card would be more appropriate as the guest will be spending the money at Walmart and building loyalty with them. The guest should be smart enough to understand the issue was a mistake, but $100 store credit is nothing to a store like Walmart.
A few years ago I encountered a situation where Sears would not honor a legit advertised price – it was a matter of about $40 on a $350 item. I think it might have been because based on the date/time in their India based call center the sale had expired. After too much time spent exchanging several emails I just cancelled the order. When I got the confirmation of the cancellation, it had the sale price listed. But even Walmart is blameless for refusing to honor an obvious error. And even consumers have to be reasonable. A $10 gift card was too much to give someone ordering more than one of the items.
When a price is wrong in store, it’s true that most stores would honor it. The difference, however, is that typically they’re only needing to honor it for one person (the person that found the wrong price). Online, deals like this can go viral in minutes, and hundreds of people can take advantage before the issue is corrected. Shoppers can’t realistically expect Walmart to honor obviously incorrect prices like that, especially when there’s a disclaimer on their site.
As for the gift card, they probably should have either gone with nothing or something slightly stronger (someone suggested $15 – even that small amount feels better).
That said, it happens to almost every online retailer (I’ve had to deal with it quite a few times). After the initial outrage from a few customers, people tend to move on and forget.
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I think they did the right thing by canceling, apologizing, and sending along a gift certificate. This has happened to airlines (as one example) and everybody gets that you don’t fly to Hawaii for $1.
To add a point, Walmart does have a disclaimer to cover this situation – of course, nobody ever reads it, but you can see it here.
First, I think a $10 gift certificate is tacky. It suggests that Walmart believes cancelling orders is a trivial occurrence and slight inconvenience to the shopper. It’s not. Even $15 has some heft to it. It doesn’t seem as though that decision was thought through. It is more likely that it was a “let’s get them off our backs” reaction.
The lesson is to have a qualifier on the website, something like….”From time to time we’ll post a deal that looks too good to be true. It probably is because of some human error. In that situation we’ll quickly post a correction and unfortunately have to cancel any associated orders. However, when that occurs we’ll try to make up for your inconvenience as best we can.” In the future if there is an error Walmart can point out their disclaimer and still try to make up for the inconvenience in a way shoppers will find satisfactory. There may be some best practice ideas among airlines that have to deal with inconvenienced customers on a more regular basis.
Of course I thought that most ecommerce sites and FSIs have such a statement.
Walmart should have either honored the prices or given a larger gift card. Sooner or later every retailer will have problems with its website, just as they can have problems in-store. Address the problem with a sense of humor and then do right by the consumer.
Walmart took the correct action. While disappointed that they did not receive at savings of some 98% on the price of goods, the consumer knows the real deal.
You don’t give away the store merely because a mistake was made. You own up to it, apologize, offer a small incentive, and move on. The late, brilliant economist, Julian Simon, encouraged airlines in the late 1980s to offer flyers to step aside for a later flight and receive a modest compensation for doing so. There was not a need to cover the entire ticket.
The consumer understood the situation, and stepped aside without much fanfare. That saved the airlines billions of dollars, and it avoided the inevitable class action lawsuits from the sharks.
Big difference between one customer seeing a mistake in a store and receiving the misquoted price, and thousands of customers jumping on the mistake online. Common sense has to prevail here. And, Walmart and other retailers have to have a planned response prepared, and a system to check that proper pricing is in place for online offers.
Walmart did the right thing.
Walmart was correct in cancelling the orders and they did the right thing by offering a gift card to the consumers who ordered the items. It saddens me to see how some people in our culture will pounce on any mistake and greedily scoop up a “deal” that they know can’t possibly be correct. Those who want more than a good faith token of appreciation are probably the very people who feel “entitled” to jump on an error!
All retailer’s need to have a check system that reviews their pricing offerings prior to release to the public. Their systems could also have an alert that signals abnormal purchases (i.e. the 50 kayaks bought by one customer) as a secondary back up.
I think cancel and gift certificate was just fine. I doubt a single one of the people who ordered the obviously incorrectly priced product didn’t feel at least a little “sneaky” in taking advantage of an honest mistake. Feel sorry for the IT system owner who left out some kind of price validation rule in allowing the “honest” mistake to happen in the first place. With all the no doubt, super intelligent systems that are in place over price optimization, even a basic edit routine should have caught this one.
Walmart did the right thing to cancel the order, but the way they handled it is the bigger question. The goal is to make the customer want to come back. Gift cards, discount coupons, etc., may do the job. Maybe a personal call is in order, followed with an email or newsletter that includes an apology and a thank you. Most people know before the order the price is probably a mistake. A good customer service rep can turn this debacle into a positive interaction if handled properly.
Only Walmart would think this is okay. Isn’t there some kind of law that dictates (absent the caveat pointed out by Joan) that if you offer to sell something and someone buys it, you’re obligated? If there isn’t there sure as heck should be.
Walmart has really gotten in the habit of throwing its weight around. It’s time that someone took the company to task for it. But who, with any kind of power has the courage to do so? No one.
Hmmm…let’s see…we have a retailer that is doing millions of dollars an hour through their .com and they make a mistake. So they issue a $10 e-card. Huh? If I was Target, Kohl’s, JCP, etc., I’d match those cards 2 to 1 on credits on my .com site. And make out like a bandit on customer satisfaction.
I don’t think Walmart took this situation lightly. It was embarrassing to them, but I also don’t think it made sense to give the merchandise away. I have to wonder if the pricing error had occurred in-store what the decision would have been. Something tells me the consumer would have gotten the lower price. What we don’t know is how many shoppers were impacted by the pricing errors online; it is likely far greater than what the impact would have been in the physical store.
Walmart doesn’t need bad PR and the likely cost of honoring the items that were sold is likely barely a blip in comparison to their total revenue. Bite the bullet, do the right thing and honor the sales. It will be cheaper than paying for that kind of positive PR.
Unfortunately, I don’t think the retailer will have learned anything from this experience.
WM will, of course, ignore the nonsense chatter of the Ms. Eckers of the world…as it should; I think they deserve plaudits for quickly discovering the problem and going above-and-beyond in the compensation. What will they learn? Mistakes happen, and when you have (literally) billions of customers and the mistakes happen online, things can become a disaster very quickly.
In such cases where the pricing glitch is so dramatic as the example in the article, I think it reasonable to cancel the order and provide a discount for the inconvenience. However, a $10 gift card is likely not enough of a peace offering in this situation to tame the disappointment of the purchaser.
In addition, shoppers that take advantage of obvious mistakes and then become indignant when the merchant does not honor the offer, share some blame as well. Reasonable people understand that honest mistakes happen from time to time and should acknowledge that when such huge mistakes occur and not expect hundreds of dollars of free merchandise.
Mistakes happen, and this is embarrassing.
The response in this type of situation is subjective and should be advantageous to the retailer – it is a business. In this case, the price differential is huge and the attempted purchasers knew it was a mistake (plenty of internet postings promoting the glitch to other crafters).
I think Walmart’s response was appropriate. Moreover, the mistake raised the awareness of Walmart as a purchasing option to craft aficionados. I think consumers understand fairness and while this will be disappointing to consumers who thought they had a steal (literally), there will not be long-term adverse effects.
I like the idea of calling customers and trying to turn lemons into lemonade – both with individual customers and via word of mouth. A good customer service person could say, hey, this was a mistake, and we will honor it if you like. Or, we could instead give you this 10% VIP discount for a year and would love you to tell your friends and family about your Walmart.com experiences.
I’ll take the second question first. What did they learn? I don’t think they care. Tomorrow, it will be all but forgotten with the exception of just the few customers impacted.
What should they have done? In light of everything going on with “healthcare.gov” they could have made a huge splash and been overwhelmed with positive publicity by doing the unexpected. Walmart could have personally delivered the item to each one of their homes by a team of Walmart associates. The message could have been “We make it right, no matter what!”
Huge opportunity lost.
As they say, timing is everything. For Walmart, this will be lost in other news and it in no way compares to the major failure of another website. Nevertheless, they missed a chance for a very inexpensive advertising bonanza!
Treasure Hunt! Here’s the disclaimer: “From time to time, pricing errors appear on our website. We try to watch them closely, but usually our customers find them first. When they do, we always honor the advertised price.”
What a great way to attract customers to the site and encourage them to spend a lot of time there. WM could manage the “mistakes” by choosing the items (closeouts, etc.) and determining the deep discounts.
I agree with Scanner, WM should have honored the sales that occurred, despite the mistaken pricing.
Walmart responded appropriately. They apologized, cancelled the order and offered a $10 gift card. But no response will completely pacify those people who want every unplanned benefit caused by a retailer’s mistake.
As consumers we have become part of an unforgiving group. But as voters we forgive the government for its mistakes. That’s paradoxical. Think about it.
What have we learned? Retail oxen (retailers) may need goring for their mistakes, but never gore my (customers) ox. Today we are part of a more opportunistic society and retailers are usually willing endure that reality due to the highly competitive pace vs. concentrating on how to turn grapes into vintage wine rather than dried raisins.
Hopefully Walmart will make lemonade out of lemons. Perhaps this foul up will actually draw more consumers to the website looking for bargains. Walmart did the right thing.
Lila Ecker is somewhat correct. If an item is priced wrong on a store shelf, many times the retailer will offer to sell at that price. There are some exceptions: The price was modified by a customer or outside the store source, the store also can not sell certain items below cost like liquor or sell items below msrp like nintendos or iPhones as the price is regulated.
The article does not explain the glitch.
Walmart is being pretty cheap about it if it is just a team member input error. If they can not sell the item at that price for what ever reason, I would say a $100 gift card would be more appropriate as the guest will be spending the money at Walmart and building loyalty with them. The guest should be smart enough to understand the issue was a mistake, but $100 store credit is nothing to a store like Walmart.
A few years ago I encountered a situation where Sears would not honor a legit advertised price – it was a matter of about $40 on a $350 item. I think it might have been because based on the date/time in their India based call center the sale had expired. After too much time spent exchanging several emails I just cancelled the order. When I got the confirmation of the cancellation, it had the sale price listed. But even Walmart is blameless for refusing to honor an obvious error. And even consumers have to be reasonable. A $10 gift card was too much to give someone ordering more than one of the items.
When a price is wrong in store, it’s true that most stores would honor it. The difference, however, is that typically they’re only needing to honor it for one person (the person that found the wrong price). Online, deals like this can go viral in minutes, and hundreds of people can take advantage before the issue is corrected. Shoppers can’t realistically expect Walmart to honor obviously incorrect prices like that, especially when there’s a disclaimer on their site.
As for the gift card, they probably should have either gone with nothing or something slightly stronger (someone suggested $15 – even that small amount feels better).
That said, it happens to almost every online retailer (I’ve had to deal with it quite a few times). After the initial outrage from a few customers, people tend to move on and forget.