Sell at a loss because of a misprint?

[Monkeyleg]

I had some new model Crimson Trace grips I added to my site, and made a mistake on the price. The price should be have been $242.95 (because they're a green laser, which is more expensive), but I priced it at $179.95 (the price of the red laser grips).

I didn't notice the mistake until a guy ordered a set this morning. When I went to process the order, I realized that the $179.95 price was $32 less than my cost. I sent him an email and explained the mistake, and apologized for it.

He emailed back furious, and said he expected me to stand behind my advertised price, or he'd badmouth me all over the internet. I replied to him, explaining again the numbers, and offered to sell him the grips at cost, which would be less than he could get them anywhere.

Was I right to not sell to him at a loss?

[Scout26]

It'll cost more than $32 to make up for the bad publicity if he follows through. 

Take the one-time loss, adjust the price on your site and move on.    Trust me, it'll be cheaper in the long run.

[Brad Johnson]

I'm with scout, take the loss this one time and chalk it up to risk mitigation.

Brad

[SADShooter]

Do you have a pricing policy disclaimer on the web page? If yes, follow it. If not, I'd institute one. If the policy wasn't clear, I'd go with scout's advice and eat the loss once.

[Fitz]

+1

[Monkeyleg]

Thanks for the replies. I called the guy, apologized, and said I'd honor the $179.95 price.

It just hurts because Trijicon and Bushnell recently raised their prices without notice, and I only discovered this when I received orders from customers for those scopes. I either made far less profit than with the 2012 prices, or I lost money on those sales. I can't keep losing money like this.

[RocketMan]

Eat the loss this once, get a disclaimer on your site.  However, be prepared to eat the loss any time you make a mistake like this.  Doing otherwise hits you harder in the long run.
I don't see anything wrong with informing a customer when you make a mistake of this type and how you are still honoring the advertised price just for them.  It can generate goodwill that can be worth more than any advertising.
Just be careful not to make this mistake again.

[Monkeyleg]

The guy's email address is grumpyoldhippy@anemailcompany.com. He was grumpy, and the idea that he was an old hippy just made the whole thing more grating.

I don't make this kind of mistake. It's the unannounced (at least to me) price hikes that hurt. Bushnell raised their prices on their best-selling scopes to where the wholesale cost is more than what I'd been charging retail. I had to just tell customers that I was out of stock rather than get into this kind of mess. I should have just done that with the old hippy.

[RevDisk]

I concur with everyone else. Take the loss, explain the situation. $32 one off is not that bad. I'd be honked as well if my prices jumped after I hit the enter button to confirm the order. Period. Obviously, unless it went down. Short of a flowery email explaining that they thought I was the most awesome person since Gaius Julius Caesar, I'd even be wondering WTF if they retroactively cut me a break. Happy, but wondering.

Obviously, this doesn't apply since I know you, but in general... 

- I don't like it when a site tells me something is out of order when I get to the shopping cart unless the listed quantity was in the single digits. That near always causes me to cancel the whole order. Mentally, I'd be thinking vendor either can't build a website, or they're suckering me intentionally.
- If I got a call or email that an item was out of stock, I'd be annoyed but understand. Definitely try not to shop there again. I wouldn't make it a point of honor, but I'd give it a -1 in my brain. Same even if the rest of my order went through. I'd very thoroughly check to make sure I'm not being charged anyways, because I'd mentally think that the vendor did not have their stuff in order. Sadly, this has proven accurate (Center Fire Systems).
- If I ordered something at X, and the vendor told me I needed to pay an extra $32 to get it, I'd be absolutely furious and livid. Short of me providing incorrect info (hey, my fault), it is the vendor's responsibility to correctly price their stuff.

The above has been built from being on both sides. I'm currently managing a couple million in web orders. I code with the above logic in mind, but the market in question is built around repeat customers. Not one-off purchasers focused on lowest possible price.

Is there any way to get an automated pricing feed from your distributors?

[Hawkmoon]

Was I right to not sell to him at a loss?

In my opinion -- no.

In my state, it's a law that if a merchant marks a price lower than it should be, the merchant MUST sell the product at that price to anyone who brings one to the checkout, even if it results in a loss to the retailer. I know the Internet is interstate commerce and my state's laws don't apply, but the principle remains the same.

[Monkeyleg]

RevDisk, the store was an afterthought, something I added in 2007. I was going to do a full-blown ecommerce site, but then Google changed my plans.

Now I'm having a site built, and it will tie into a feed from the distributors so that quantities can update automatically. If possible, I'll also have a formula for pricing so that any price changes will be reflected on my site right away (do a 10% or 15% markup on everything, factor in shipping and credit card fees, and multiply the wholesale cost).

When people order an item and it's out of stock, I'll offer them $10 or $20 or sometimes more if they can wait a week or two. That seems to satisfy most folks. I know that not having the site updated is bad, but until I decided what to do with the site, I didn't want to spend money having something built that was just going to be temporary.

[Ron]

You should always honor the advertised price. Otherwise you deserve any and all bad publicity or reviews you get.

You just never know who is on the other end. He might be someone who recommends you to his whole gun club.

Aim small miss small.

[lupinus]

I'm with the general consensus.

The price I see is the price I expect to pay. If I placed an order and received such an email I'd likely be miffed as well, and rightly so IMO. I'd also probably be posting here and a few other places about the experience in very short order.

Get it corrected pronto, take the 32 dollar hit, and call it a day. A pissed off customer, especially one with friends or forums to bitch to, is going to cost a whole lot more than 32 bucks.

[never_retreat]

I would sell it at the advertised price, bad write ups are hard to get rid of on the web.
When you called him was he willing to split the difference and at least go up to your true cost?
I have had that work in the past. In my case it was a manufacture drop ship item and i did not know they upped the price.

[GigaBuist]

My wife has had a number of orders canceled from major retailers with online shops because the advertised price was incorrect.  Mind you, these were $200 items going for something like $24.99.  The error hits the mommy interwebz and everybody lines up hoping to get that killer deal on a car seat or something.  They cancel them but offer a $20 gift card or something for the mix-up.

When the price is SO low nobody would expect you to honor it I think it's OK to cancel it, especially with the gift card.

But if the discrepancy is reasonable, like this one, where the customer thought it was a legit price and you kinda did too while keying it in... well, you honor it.  Just think of it as paying somebody $32 to catch your error.  Just be glad he didn't have 200 friends to grab the "deal" before you fixed it.  That would have been a mess.

[Monkeyleg]

Thanks for the replies.

When you called him was he willing to split the difference and at least go up to your true cost?

No. He took the $63 price difference, didn't say thanks, and was just grumpy.

It's really hard in this market to keep track of what's in stock and what's not. Things sell fast. I had another order today for a laser grip that I sell for $174.95. I have it at this price, and make just $15 on it, because of my competitors.

Anywho, a guy ordered one, and I had to tell him it was out of stock. He got really irate. I emailed back and said that I'd have some next week, and offered him $10 to wait. He emailed back to say that I had offered him $15 earlier in the day, and he'd wait for $15. I had to politely explain that the $10 discount was the first I'd offered to him, and that I'd be making nothing if I gave him $15.

This is all especially aggravating as I've been thinking about the days when I had my studio, and if the price on a job got knocked down $1500 or sometimes even $15,000, that was okay. Now I'm sweating $15.

[Ron]

Use these as opportunities to define clearly what your policy is so that you can point to the published policy that is clearly defined.

Then if someone isn't respectful you can point them to the stated policy. All others will be thankful for your waving the the stated policy on their behalf.

Truthfully though I think it has been proven a customer is always right (even when they're wrong) policy is the best policy.  

[Matthew Carberry]

You weren't wrong to bring up the issue though.

If you explain what happened, and what your actual cost is, but that you intend to honor the published price because that is your policy, you leave it up to the customer to offer to split the difference or to pay your cost as their "good deed of the day."

Standard negotiation stuff. Behave honorably and give the other guy the same option. The key is to sound noble without sounding weasel-y or whiny. 

Also, if they do you a solid, and only -after- they do (you can't bring it up or it sounds like a weasel-y bribe attempt), tell them you are giving them the "good guy" 5 or 10% discount off their next purchase in appreciation. You are rewarding a supererogatory act at that point, not trying to buy them off.

You'll own them as a customer for life.

[never_retreat]

While you do need terms and conditions on your site somewhere obviously.
It might me necessary to be a bit more up front considering the mass hysteria for anything gun related right now.
I don't know your site or what software you are using, but can you add some text easily next to the add to cart button?
Something like "prices subject to current stock only" or "any item back ordered subject to change due to suppliers"
Because we know that no one reads the fine print. I have to do this on my site with certain items that are limited production. Pre orders etc.

[RevDisk]

You weren't wrong to bring up the issue though.

If you explain what happened, and what your actual cost is, but that you intend to honor the published price because that is your policy, you leave it up to the customer to offer to split the difference or to pay your cost as their "good deed of the day."

Standard negotiation stuff. Behave honorably and give the other guy the same option. The key is to sound noble without sounding weasel-y or whiny. 

Also, if they do you a solid, and only -after- they do (you can't bring it up or it sounds like a weasel-y bribe attempt), tell them you are giving them the "good guy" 5 or 10% discount off their next purchase in appreciation. You are rewarding a supererogatory act at that point, not trying to buy them off.

You'll own them as a customer for life.

This. We're essentially doing that for customers during a major pricing shift that required reprogramming our ERP.  There will be a undisclosed period where the backend will be offline and orders queuing up. Those orders will get a bonus that they don't know about yet.

[AZRedhawk44]

Misprints that are your fault should be honored by you.

Misprints that are the fault of your 3rd party marketing provider (they mis-translated your copy during layout in a newspaper ad or spam email blast) should still be honored and the 3rd party marketing provider should eat it.

This applies to everything within reasonable amounts.  $11.79 ACOG's are obviously exempt from this because only idiots would think anyone would sell an ACOG for $12.  But anything within 50% of the price or so should be honored.

My thoughts, at least.

Words have meaning, and mispoken words have meaning too.

[HankB]

Unless the advertised price is SO far off it's an obvious error - for example, the decimal point was moved over a couple of places - the vendor should honor the price; otherwise it raises the specter of "false advertising" even if it was an honest mistake.

I know that if I ordered something in good faith and then the vendor reneged and wanted, $10, $20, or whatever additional, I'd go out of my way to spread the word that's he's a rather unsavory and unethical sort and do what I could to cost him future sales.

And I have done so in the past.

In your case . . . $32? Honor the price, and chalk it up to experience.

[Monkeyleg]

In your case . . . $32? Honor the price, and chalk it up to experience.

I did and I did. And that customer got a screaming deal that he should brag about to his friends. Optics Planet is $100 more. Amazon is $70 more. The cheapest I could find was $53 more.