Consumer rights expert Martyn James explains everything you need to know about pricing errors – and if you’re allowed to keep a mis-priced item
Have you ever spied an item in a shop that’s clearly been mispriced and nonchalantly wandered over to the tills to see if the staff don’t notice the error – and sell you the goods at the super cheap price?
We all love a bargain – and businesses do indeed make pricing errors when it comes to the things they sell on the high street and online.
We aren’t talking about switching stickers here – that would be wrong! But if you do discover a mispriced bargain, what are your rights?
How one man bagged a $12,987 bargain
Last year, a man in Mexico hit the headlines after spotting that a pair of gold and diamond Cartier earrings had mistakenly been listed on a website as $13 instead of $13,000.
When Rogelio Villarreal placed the order, it was processed. However, perhaps inevitably, Cartier tried to get out of the deal. After a month-long battle, Rogelio won and got the bargain of a lifetime (he gave the earrings to his mum, bless him).
It should be noted that Rogelio won his case because of Mexico’s consumer protection laws. So could he have won the right to retain the bargain of the year if he’d lived in the UK?
What are the rules around mispriced items?
The subject of mispriced items and your right to buy them prompts a surprisingly strong reaction from people. There are also some widely believed urban myths doing the rounds about this situation too. So I’ll do my best to keep things as simple as possible.
Many people assume that the price on the tag represents the final word on what an item should cost and therefore the shop must sell you the goods at that price. Sadly that isn’t the case – but there are exceptions.
In straightforward terms, the shop doesn’t have to honour a mispriced item if they notice the error before the transaction is completed. So at the till, if the price error is discovered the shop can reinstate the original value.
You might want to have ago at haggling, but you’ll have more luck with the head office of the retailer than the poor person stuck on the till all day.
If you decide to go down this avenue, then I’d photo the mispriced item so you can prove that the labelling was incorrectly applied. If you bought the item at the full price, you could ask for a refund of some of the money or a store credit – but it’s entirely at the shop’s discretion.
However, if the transaction goes through and you leave the shop, it’s a different story. Should the retailer contact you to say that they’ve made a mistake then you should not have to pay back the difference unless they can establish that you knew the price was wrong at the time – which is tricky to prove.
The business should also not attempt to debit your account for the difference, as you have not authorised this sum to be taken from your account. If this happens, complain to your card provider and point out this is an ‘unauthorised transaction’.
What about online transactions?
What indeed!? This advice relates more to shopping on the high street. However, we do most of our shopping online these days. This is where it gets complicated. When you make a purchase with a retailer, you enter in to a contract.
As my good friend, and leading legal expert off the tele, Gary Rycroft advises: “In law a binding contract comprises four elements: offer, acceptance, consideration and intention to create legal relations. ‘Consideration’ is the price (or benefit) agreed as part of the contract, like the sum you agree to pay in return for goods”.
What this means is if a mispriced item – like those Cartier earrings – has been processed and confirmed then the contract has been made. The retailer sold an item at a specific price and you agreed to pay for it at that price.
Where a contact exists the business usually has to honour it if you’ve bought or received the goods though there may be exceptions in the T&Cs. That sounds rather complicated – but in most cases the retailer’s website will confirm at what point your order has been accepted. If that’s the case, they should honour the price you paid.
Sometimes businesses will try to get around this by arguing they’ve made ‘an honest mistake’. But if you double down and threaten to ‘enforce the contract’ there’s a good chance you could win if it goes to court.
One final warning though, if word gets around that a website has mispriced certain goods and loads of people rush to buy them, then this means you are all aware that the business has made an error – and chances are the retailer won’t have to cough up.
What if I’m credited money by mistake – do I have to give it back?
If it’s a financial institution that made the error, then it’s a hard no, I’m afraid. Sorry to disappoint you all, but there really is no thing as free money. In fact, legally, you’re obliged to pay it back.
Of all the money urban myths, this is the one people cling on to the hardest. I’m often told how wrong I am about this in rather angry terms by people affected. Sadly, I’m 100% right on this one. If the bank or a business overpays in to your account you have to return the cash – even if months have passed since the error.
Having said that, you didn’t make the initial error. So if you have spent some or all of the cash ‘accidentally’ then you can expect your bank or card provider to come up with an affordable repayment plan, ideally without interest. This shouldn’t damage your credit file either.
On occasion, you might be able to demonstrate that you were expecting a lump sum payment like an inheritance and assumed the deposit made in error was that sum. This might result in some of the cash you’ve spent being waved, but this is very rare.
As for credits made in error by retailers, the same principle applies. What usually happens is the retailer will ask their bank to recall the money. Unless you can prove that the money is owed to you, it’s likely you’ll win.
In practice, the retailer might give up if it’s a small amount. However, for larger sums, you can expect threats of legal action if you refuse to allow your bank to return the money. Yikes.
- Martyn James is a leading consumer rights campaigner, TV and radio broadcaster and journalist