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Correcting a pricing mistake in your Australian online store

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Published on January 30, 2012 Correcting a pricing mistake in your Australian online store

Posted at 1:23 am in Ecommerce by

Last updated on December 26, 2018

If you make a horrendous mistake in your online store, e.g., offer a TV set for $10, do you have to honour that price if someone asks about it? Or, what if someone buys that TV for that price, do you have to honour it?

On 1 January 2011, Australia introduced a new federal law called the Competition and Consumer Act 2010. This replaced the previous Trade Practices Act and other various state fair trading laws that applied differently in different states. The previous legislation made it hard for both consumers and businesses to understand their rights under the law. The new Act makes things much clearer, and consistent across states. The new act addresses the situation above and other pricing issues under the subject of multiple prices.

Multiple Pricing occurs when there are two different prices advertised for a product – e.g., the shelf price in the store differs from the catalog price (like when it is due to an error in the catalog or on the website).

The new Act requires that if multiple prices are advertised for a product, the product must be sold for the lowest of the advertised prices BUT the business has the right to withdraw from the sale and correct the pricing error (before selling the item back to the same consumer at the correct price if they wish).

The upshot is that you don’t have to honour a pricing mistake but you need to correct it before you can sell that item. This may be publishing a pricing notice on your website (for a printed catalog) and updating your website.

Ultimately, common sense and fairness prevail:

  • You can’t increase your prices just to mark them down on special to the price you are going to sell them for
  • Items must be of an acceptable quality – i.e. fair for the price that was paid for them
  • You cannot bait customers into your store – advertising a whole lot of cheaper products that are always sold out to give customers the feeling that all of your products are good value for money, and then only have more expensive products available for sale
  • Falsely compare products to Recommended Retail Prices (RRP) prices that are not equivalent to what other retailers would/could sell those products for
  • You must ensure that goods match their descriptions – this is especially important online where the buyer cannot see what they are buying

Even if your competitors aren’t sticking to the rules, you should as the penalties under the Competition and Consumer Act 2010 are severe, and can be enforced nationwide by the ACCC rather than state fair trading offices. If your competitors aren’t playing by the rules, they will be eventually caught.

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