Reminder: Legitimate Pricing Errors Are Not Bait And Switch

Once again, a retailer is making headlines with shoppers angry they aren’t getting the items they ordered at obviously erroneous prices. This time it’s Walmart.com, which experienced a major glitch yesterday, attaching incorrect prices to numerous items. So this is a good time to remind everyone that this is not a “bait and switch” and that retailers are generally not under any obligation to honor pricing errors.

It’s been a couple years since we ran down the basics of what constitutes bait and switch, so here’s a refresher course.

As the name implies, there are two key parts to bait and switch. The first part, the “bait” requires that there is a deliberate intention to deceive the customer.

Per the Federal Trade Commission, the bait’s purpose is trick a customer into shopping for the initial offer while having no intention to ever sell them that product in the first place.

One could make the argument — and this is really stretching it — that since Walmart.com never intended to sell these incorrectly priced products at the incorrect prices, that this counts as “bait.” We don’t hold to that theory, but just in case you do, let’s then consider the second part of the bait and switch.

In the “switch” portion of a bait and switch scam, the retailer takes the lured-in customer and gets them to purchase a more expensive product or to pay more for the original product than was initially advertised.

In the Walmart.com case, the company is canceling orders and giving customers a $10 Walmart gift card. If the retailer, instead of cancelling orders, told the customers “Sorry you ordered that $500 computer for $25… how about you pay us $450 and we’ll call it a deal?”, or if they wrote to customers and said “We can’t sell you that computer for $25, but here’s one you might like for $350,” you could make the bait and switch argument.

In the AAFES/Dell instance, it would be hard to imagine what Dell or AAFES would be gaining by falsely advertising a $25 laptop. If, rather than automatically cancelling the orders and refunding the purchases, the seller had contacted buyers and said, “Sorry about that, but here’s a $350 netbook you should buy instead,” then you might be able to argue bait-and-switch.

The whole point of a bait and switch scam is for the scammer to benefit financially. Walmart reaps no benefit from mislabeling products for hundreds of dollars below the retail price.

It may actually be risky on Walmart’s part to hand out the $10 gift cards, as some could make the argument that this is an enticement to spend money at the store, and that Walmart ultimately benefits from the purchases made with these cards since numerous studies show that people tend to spend more when shopping with gift cards.

We don’t think that’s Walmart’s intention, but we wouldn’t be surprised if someone decided to test this argument in court.

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  1. ShadyTrust says:

    It’ll definitely be worth watching Amazon for this today. They had a few flagship cellphones marked down insanely cheap (relatively speaking) for a while and all sold out instantly. The $600 LG G2 was 199.99 off contract, the $800 Note 3 was 299.99 off contract and there were a few others. Some sites are saying it may have been a glitch. I got an order in for the G2 and am really hoping it gets fulfilled.

  2. JoeBlow says:

    I do like seeing articles like this on Consumerist. Far too often customers cry foul over things like this. They like to think that the “right” thing for a company to do is to honor any and all pricing errors in exchange for “goodwill” from a customer who only wants something if the company is selling it for a loss. That may work on a box of pasta or a bouquet of flowers, but when it’s an expensive piece of electronics, and each one sold loses a store hundreds of dollars, and this mistake gets blasted out to online deal aggregators, that just isn’t going to happen.

  3. Saber says:

    Honestly, I’m not sure why so many people are complaining. It was a legitimate error, and they have every right to fix it and just leave the customers in the dust. Instead, they’re giving $10 gift certificates to everyone who was affected. I myself tried to purchase 2 book sets for gifts for kids of friends (they’re bookworms – it’d be perfect!). The prices didn’t seem so outrageous to me; a little below the normal but not nuts ($12 when I’ve seen them for about $15 elsewhere). The fact that they’re making up for it at all is amazing and a very good gesture of goodwill.

    …of course, they could also be hoping that the gift certificate makes people forget this incident come Christmas-time…

  4. Duds331 says:

    People are well aware that a treadmill should not cost $30 or GTA V does not sale for $18, but they try to take advantage of the error and then get angry when the retailer catches the error and cancels their orders. It’s ridiculous. Just say “Oh well, I tried and at least I got a gift card.” And if you think the gift card is trying to lure you in to spend more, don’t spend it! It didn’t cost you anything. Heck, send me the code!

  5. DrRon says:

    Bummer!
    Appears that both orders for 6 24″ LED monitors are gonna get cancelled. When your up at 3am and find something like that, you gotta try. Just think it should be $10 gift card for each item ordered. Don’t know why I didn’t try for a 27″ for store pickup ASAP. Was worth the buzz while it was going on.