Flybuys and iPads - the latest online pricing mistake. Here we go again...

Forums › Off topic › Flybuys and iPads - the latest online pricing mistake. Here we go again...

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#1475931 21-Jan-2016 09:49

So all up, Flybuys is out of pocket somewhere in the vicinity of $20k (ish)

For the good PR, they're not being heavy handed, but they are also doing the right thing by themselves, by asking for the iPads back.

I think they're going about it pretty much the right way. I really don't think I could live with myself, if i was one of the 17 that collected the iPads...and to get in so early, they had to know it was likely to be rescinded.

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#1475990 21-Jan-2016 11:28

My understanding of the law is that they absolutely don't have to honour a pricing mistake (as they shouldn't - I vehemently disagree with Lias on this point) however if the product has been collected and ownership transferred, then the contract of sale is completed and there is no recourse for the vendor to get the item back or charge the shortfall. In fact they're explicitly forbidden from attempting either of those things (apart from the obvious asking nicely - which there is no legal obligation on the consumer to comply).

This means that for Loyalty NZ, they are out whatever the wholesale price is for the iPad (I do not believe Noel Leeming is paid retail price). I'm sure that they aren't hurting for money though, being owned by Z Energy, IAG, BNZ and Foodstuffs.

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#1476023 21-Jan-2016 11:48

I wonder if the ones from the 17 who do not return the iPads will get their Flybuys account terminated?

This is covered in their T & Cs.

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#1476025 21-Jan-2016 11:52

Geese: I wonder if the ones from the 17 who do not return the iPads will get their Flybuys account terminated?

This is covered in their T & Cs.

Well unless they had thousands of points, it's probably worth it to keep the Ipad.

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#1476084 21-Jan-2016 12:53

Kyanar:
My understanding of the law is that they absolutely don't have to honour a pricing mistake (as they shouldn't - I vehemently disagree with Lias on this point) however if the product has been collected and ownership transferred, then the contract of sale is completed and there is no recourse for the vendor to get the item back or charge the shortfall. In fact they're explicitly forbidden from attempting either of those things (apart from the obvious asking nicely - which there is no legal obligation on the consumer to comply).

This means that for Loyalty NZ, they are out whatever the wholesale price is for the iPad (I do not believe Noel Leeming is paid retail price). I'm sure that they aren't hurting for money though, being owned by Z Energy, IAG, BNZ and Foodstuffs.

I don't believe that is entirely correct. I believe if the buyer knew there was an error with the price, then the retailer can still ask for payment of the difference, even after picking them up. The complication is that it wasn't purchased with cash

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#1476086 21-Jan-2016 12:56

Handsomedan:
So all up, Flybuys is out of pocket somewhere in the vicinity of $20k (ish)

For the good PR, they're not being heavy handed, but they are also doing the right thing by themselves, by asking for the iPads back.

I think they're going about it pretty much the right way. I really don't think I could live with myself, if i was one of the 17 that collected the iPads...and to get in so early, they had to know it was likely to be rescinded.

In fact the free advertising they have got from this in new sign ups has probably covered it. Just means someone misses out on some of their bonus this year :)

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#1476141 21-Jan-2016 13:54

mattwnz:
Handsomedan:

So all up, Flybuys is out of pocket somewhere in the vicinity of $20k (ish)

In fact the free advertising they have got from this in new sign ups has probably covered it. Just means someone misses out on some of their bonus this year :)

Really? This sounds like Dick Smith economics.

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#1476164 21-Jan-2016 14:35

mattwnz:
Handsomedan:

So all up, Flybuys is out of pocket somewhere in the vicinity of $20k (ish)

For the good PR, they're not being heavy handed, but they are also doing the right thing by themselves, by asking for the iPads back.

I think they're going about it pretty much the right way. I really don't think I could live with myself, if i was one of the 17 that collected the iPads...and to get in so early, they had to know it was likely to be rescinded.

In fact the free advertising they have got from this in new sign ups has probably covered it. Just means someone misses out on some of their bonus this year :)

As with the HN example last year, I wondered whether it would have been better for the PR team to spin it a different way than "we got ripped off." If, once they found the problem and plugged the leak, they had announced that they had been running a stealth giveaway campaign of a limited number of iPads for 1 point, and that this would happen "from time to time", how many people would have signed up and been scouring the FlyBuys website for those "deals." Meanwhile, in the back office, the responsible person is roundly whipped for their mistake, but in public FlyBuys get to look magnanimous and generous, with the positive publicity that others (like HN and JBHifi) so obviously squandered. The value of the the good press would undoubtedly be worth the value of product given away.

mattwnz

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#1476183 21-Jan-2016 14:37

dunnersdude:
mattwnz:
Handsomedan:

So all up, Flybuys is out of pocket somewhere in the vicinity of $20k (ish)

In fact the free advertising they have got from this in new sign ups has probably covered it. Just means someone misses out on some of their bonus this year :)

Really? This sounds like Dick Smith economics.

The big difference is no consumer is out of pocket. I don't think 10k could buy much that much advertising during prime time news and the top online story for the day, and it is a story that paints fly buys in good light. That is likely why they aren't pursuing them back

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#1476203 21-Jan-2016 15:15

mattwnz:

I don't believe that is entirely correct. I believe if the buyer knew there was an error with the price, then the retailer can still ask for payment of the difference, even after picking them up. The complication is that it wasn't purchased with cash

Nope, they can't. No provision in the Fair Trading Act or Sale of Goods Act permits the vendor to demand additional payment due to a mistake after the sale is made. Sale contracts are simple - Offer, Acceptance, Consideration. In this instance, the offer was one fly buys point. The customer accepted the offer, supplied consideration, and the product was handed over - contract fulfilled.

The Fair Trading Act states that it is a defense to claims of false advertising to state that the pricing was a genuine mistake (which is why they can cancel orders without penalty) but that is the extent of their protection.

There is actually not a lot of protections for the seller in this instance.

mattwnz

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#1476292 21-Jan-2016 17:31

Kyanar:

mattwnz:

I don't believe that is entirely correct. I believe if the buyer knew there was an error with the price, then the retailer can still ask for payment of the difference, even after picking them up. The complication is that it wasn't purchased with cash

Nope, they can't. No provision in the Fair Trading Act or Sale of Goods Act permits the vendor to demand additional payment due to a mistake after the sale is made. Sale contracts are simple - Offer, Acceptance, Consideration. In this instance, the offer was one fly buys point. The customer accepted the offer, supplied consideration, and the product was handed over - contract fulfilled.

The Fair Trading Act states that it is a defense to claims of false advertising to state that the pricing was a genuine mistake (which is why they can cancel orders without penalty) but that is the extent of their protection.

There is actually not a lot of protections for the seller in this instance.

That is odd, because the Citizen Advice website says otherwise, second question down at http://www.cab.org.nz/vat/consumer/bts/pages/promisesabouttheprice.aspx. Basically it says if you knew that there was a mistake with the price and the sale is completed, then the retailer can come after you for the difference. Not sure what act it is in, maybe the contractual mistakes act? You would think the advice on the CAB website would be correct?

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#1476312 21-Jan-2016 18:48

mattwnz:

That is odd, because the Citizen Advice website says otherwise, second question down at http://www.cab.org.nz/vat/consumer/bts/pages/promisesabouttheprice.aspx. Basically it says if you knew that there was a mistake with the price and the sale is completed, then the retailer can come after you for the difference. Not sure what act it is in, maybe the contractual mistakes act? You would think the advice on the CAB website would be correct?

Contractual Mistakes Act does seem to be the only one that could apply, though there is very little example cases from the Disputes Tribunal who have jurisdiction.

Interestingly, Consumer Affairs have a slightly different description:

http://www.consumeraffairs.govt.nz/for-consumers/shopping/how-you-pay/price-of-goods-and-services:

After the sale is completed a trader can’t ask a consumer to pay the extra amount, unless the consumer knew that there was a mistake about the price and the price was considerably less than it should have been.

For example if you bought a jumper for $30 when it was supposed to be $40, then the trader can’t ask for the extra money. But if you bought a new TV that was supposed to be $500 and the trader only charged your eftpos card $50 then the trader can ask you to pay the extra amount.

This implies that the mistake only applies when you're given a price, and what they charge you is less than the quoted amount. I'm not sure it applies when they quote you an amount and then proceed to change you that amount.

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#1476743 22-Jan-2016 12:20

Lizard1977:

mattwnz:
Handsomedan:

So all up, Flybuys is out of pocket somewhere in the vicinity of $20k (ish)

For the good PR, they're not being heavy handed, but they are also doing the right thing by themselves, by asking for the iPads back.

I think they're going about it pretty much the right way. I really don't think I could live with myself, if i was one of the 17 that collected the iPads...and to get in so early, they had to know it was likely to be rescinded.

In fact the free advertising they have got from this in new sign ups has probably covered it. Just means someone misses out on some of their bonus this year :)

As with the HN example last year, I wondered whether it would have been better for the PR team to spin it a different way than "we got ripped off." If, once they found the problem and plugged the leak, they had announced that they had been running a stealth giveaway campaign of a limited number of iPads for 1 point, and that this would happen "from time to time", how many people would have signed up and been scouring the FlyBuys website for those "deals." Meanwhile, in the back office, the responsible person is roundly whipped for their mistake, but in public FlyBuys get to look magnanimous and generous, with the positive publicity that others (like HN and JBHifi) so obviously squandered. The value of the the good press would undoubtedly be worth the value of product given away.

The problem is that they had to plug the leak and tell over a hundred customers that their purchase was not valid, so your approach above never would have worked.

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#1476805 22-Jan-2016 13:18

mattwnz:

Sale contracts are simple - Offer, Acceptance, Consideration. In this instance, the offer was one fly buys point. The customer accepted the offer, supplied consideration, and the product was handed over - contract fulfilled.

It is the customer who makes the offer of one fly buys point based on the sellers advert. Seller accepts, supplies product, purchaser pays fulfilling contract.

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#1476807 22-Jan-2016 13:23

Handsomedan:
So all up, Flybuys is out of pocket somewhere in the vicinity of $20k (ish)

For the good PR, they're not being heavy handed, but they are also doing the right thing by themselves, by asking for the iPads back.

I think they're going about it pretty much the right way. I really don't think I could live with myself, if i was one of the 17 that collected the iPads...and to get in so early, they had to know it was likely to be rescinded.

No only 17 people or so got the iPads before they stopped giving it out.

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