Why Walmart Canceled Mispriced Item Orders

Walmart won't honor its truly falling prices of $600 electronics for $8.85.

ByABC News
November 7, 2013, 8:41 AM

Nov. 7, 2013 — -- Walmart is defending its decision not to fulfill orders from Wednesday's website glitch that led to discounts of hundreds of dollars.

On Wednesday night, Walmart said it resolved an issue that was causing an online frenzy among shoppers. An apparent glitch on the company's website that morning led to $8.85 listings for items that included computer monitors and projectors.

The country's largest retailer was selling a 24-inch high-definition Viewsonic computer monitor, an InFocus IN2124 Projector digital projectors and other products, many for $8.85. The projector is now listed for $578.89 on Walmart.com and $579.99 on Newegg.com.

When asked if Walmart is obligated to fulfill a completed credit card transaction, a spokesman for the retailer pointed to its terms of use, which states: "We reserve the right to refuse or cancel an order for any reason including limitations on quantities available for purchase, inaccuracies, or errors in product or pricing information, or problems identified by our credit and fraud avoidance department."

The company said it is notifying customers who ordered items with the "wide discrepancy in pricing" that their orders were canceled and they will be given a refund. The company told customers it will send them within five business days a $10 e-gift card for Walmart stores and Walmart.com.

Read More: Walmart Website Error Allowed Customers to Buy $600 Electronics for $8.85

But customers expressed outrage on Walmart's Facebook page.

"I will gladly pay an extra dollar or 2 for something to avoid stepping foot or spending a dime in your stores," one Facebook user wrote. "Including SAMs. Membership cancelled."

Another said, "I've had it with Wal-mart. I haven't heard anything about $10 gift cards and have been searching all morning for a phone number to call and of course they don't have a phone # you can call you can send an email that they can send an automated response to. I will take all of my business somewhere else if you do not honor my order confirmation!!!"

Tod Marks, senior projects editor for Consumer Reports, said if a pricing error is the result of "a simple or honest mistake," and not part of a systematic pattern of "come ons" or other abuse, a company is not obligated to honor it.

From a public relations standpoint and in the interest of customer good will, a firm will sometimes take the loss, but that typically involves relatively inexpensive items, he said.

"However, to be clear, it's the company's decision," Marks said.

Companies can get into trouble with authorities if they purposefully post an incorrect price to "bait" customers to shop and then "switch" them to a more expensive alternative, Marks said.

"Again, this is something authorities would determine based on a pattern of behavior rather than a single incident," he explained.

As a comparison, Marks said these tactics are not wholly unlike the Black Friday or other doorbuster deals in which retailers dangle $100 laptops and TV sets to tempt people to shop.

"They note that quantities are limited, but also state that no rainchecks will be given, thus legally washing their hands of any obligation," he said. "Stores must have a reasonable quantity of items on hand, but they're off the hook as long as they make clear that supplies are limited."

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Walmart assured the media that the site was not hacked.

"We experienced a technical error that caused some items to show incorrect pricing," Walmart said in a statement on Wednesday morning. "We are working quickly to correct the error and during this time, there may be intermittent site availability. We apologize for any inconvenience to our customers."

Just two weeks ago, Walmart stores in Louisiana experienced another frenzied shopping day, but that time with live customers. An error in the food stamps EBT system caused account limits to temporarily disappear, leading customers to load up shopping carts with hundreds of dollars worth of items.

Read More: Walmart Says Allowing Food Stamp Shopping Spree Was 'Right Choice'