Do Retailers Have To Honour Advertised Prices?

Dick Smith advertised a 32GB microSD card for only $8 earlier this week in error. It has announced that it won't honour that price, but is it within its rights to do so?

Photo: mikecogh

The short answer, for the tl;dr crowd is that no, it's not actually obliged to honour an advertised price if it is in error. It is different if a retailer offers a "sale" price in a deceptive fashion that it never intended to honour, but as the Dick Smith deal linked through to a cheaper 8GB card that it is selling for $8, that wasn't the case here.

Current has the writeup on the Dick Smith deal, noting that it has a specific advertising clause in the small print:

In certain circumstances, we may need to reject your order. This may happen where the requested Product is not available or if there is an error in the price or the product description posted on the Site.

There's a difference in expectations here between what some retailers offer in the case of pricing errors, and what they're obliged to actually do. Many vendors go above what they're legally obliged to do in order to meet consumer expectations, but that doesn't change their actual obligations, nor does it mean that what one store does is law for another.

A good example is the supermarket code of practice for computerised checkout systems, which offers customers a single item under $50 for free if it scans at a higher price than the ticketed shelf price. That's a voluntary code (Woolies, Coles, Bi-Lo and Franklins are signatories). IGA has its own version with a slightly tighter $20 limit but the key thing in all cases is that it's the supermarket's choice to do so. Coles and Kmart are part of the Coles group, but the code doesn't apply at all in Kmart stores as an example.

We've covered instances previously where pricing errors have been honoured by vendors wishing to "make good" with their customers, but they're not actually obliged to do so. In Dick Smith's case, it has decided to apologise to customers, but not honour the price.

Dick Smith apologises for incorrect offer, refuses to honour cheap price [Current]


Comments

    IANAL but from my understanding.

    For there to be a legal contract there has to be an offer and acceptance of that offer.

    An advertisted price is not an offer.

    The offer is made when you take the usb stick to the counter and say. "I would like to buy this".

    The retailer can then accept your offer - sell you the item, or reject it and not seel to you.

      That's pretty much the way it works, yes. There are laws around misleading conduct -- sale prices that aren't actually sale prices, offering sale prices on goods they were never going to hold, and that sort of thing -- but in the case of errors, the vendor has the final say. Some honour them, and some don't.

        Monkeymind is correct ( Cant believe I just said that ) An Advertised price is an "invitation to treat" however coupled with this is s52 of the Trade Practices Act. Brief terms - False and misleading statments intented to decieve. Intentions to decieve are treated harshley

    Isn't the answer to the question "yes, it is within its rights" rather than "no"?

    That said, where retailers like this usually get into legal trouble is if someone asks for the advertised special and they say 'that isn't for sale, but how about ?', whereupon they've committed a bait-and-switch - explicitly illegal and which shops regularly get done for.

      The answer appears to be in response to the question in the title, rather than the question in the first paragraph. A little confusing I suppose since they ask different things.

        I was going to say the same thing, it's just a little pet peeve of mine, but when a writer first asks Question A, and then answers opposite-of-Question-A it's mildly annoying, and you know how internet commenters love to make huge dramas about tiny things :P So here I go...

        For example (re-phrased): Does Dick Smith have the right to call backsies? The answer is no; the store doesn't have to honour the original misprint.

        Last edited 08/03/13 4:34 pm

    I'm not really sure what "Current" is, I assume some blog or otherwise.. In any case, make it clear without having to cite sources by making brand names like that a hyperlink to either a search of your site for the brand/tag - or to their official site/page you're referencing inline. Especially true for.. brands or whatever this is meant to refer to that have such names that literally are impractical or impossible to "google" without context. (For example, I assume it's a technology or business blog.. Try googling 'current technology' or 'current business'... Yeah..)

    #HashtagUXTips4Free

    Last edited 09/03/13 1:13 am

    Ok what if an item is advertised, then the site allows you to buy it. If the site takes your money and confirms the sale with you.via email. / paypal. Can they then refuse to send you the item. I.e. You can buy an item for $11 when it normally costs a few hundred?

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