Macy's most recent catalog contained a pretty jaw-dropping deal: a diamond necklace with an original price of $1500 was advertised on sale for $47.
The only problem? The sale price was a typo. The necklace was supposed to be $479 on sale. Some poor copy-editor is probably getting fired as we speak.
A number of customers were able to buy the necklace at the $47 price (Macy's eventually cottoned on to the mistake and posted signs at its jewelry counters apologizing for the error and listing the correct price). The local Dallas ABC affiliate talked to a would-be Macy's customer named Robert Bernard who wanted to buy his wife the necklace for their anniversary:
Bernard suspected it might not be true. But when he got to the Macy's at Collin Creek Mall people were actually paying that price for the expensive necklace. In fact, a customer in front of him brought every one of them the store had in stock, he said.
The clerk offered to sell Bernard two of necklaces for $47 and have them shipped to his home. Total Savings was $1,400, his receipt reads.
But a couple days later, Macy's left him a voicemail.
"This item has the wrong price for $47," a Macy's call center employee said in Bernard's voicemail. "The correct price is $479 dollars and because of that pricing error, your order has been canceled and I apologize."
Most upsetting, Bernard says, Macy's never offered him anything else for the money he spent but said it would process a refund for him.
Bernard bought the necklaces on back order and has a receipt. But Macy's didn't honor the sale. "For those customers who bought the necklace at the $47 price, they were fortunate," wrote a Macy's spokesperson in an email. "For the gentleman you spoke with, he was not so fortunate. We are sincerely sorry he was disappointed."
1. Is this even legal? If the price is $47 in the catalog, does the store have to honor it? It may have been a mistake, but $47 was still the advertised price.
2. Robert Bernard seems like a very nice man, and not just some jerk out to profit from Macy's mistake.
3. God, does it suck to be in line right behind that asshole who buys all the necklaces in stock.
4. What on earth compelled Macy's to leave a voicemail about this and drag its feet on the refund? Why didn't they, I don't know, give him a $50 gift certificate just to be nice? That's peanuts to a business like Macy's, and it would have probably prevented a lot of negative publicity.
5. But seriously, is this legal?
I called the Federal Trade Commission consumer hotline and spoke to an operator who sounded interested in the case, but couldn't express an opinion on its legality. The Better Business Bureau's published Code of Advertising covers a lot of truth-in-advertising issues, like misleading language and fictitiously high MSRPs, but little on the subject of whether a stated price has to be honored. "The primary responsibility for truthful and non-deceptive advertising rests with the advertiser. Advertisers should be prepared to substantiate any claims or offers made" in ads, says the BBB.
So I emailed Susan Scafidi of the Fashion Law Institute at Fordham. Scafidi's area of expertise is intellectual property, not contract law, but she was happy to weigh in. And the answer is: it's complicated. "That would be a great first-year Contracts class exam question!" Scafidi wrote.
Courts are reluctant to fix unilateral errors, so unless Macy's could show that it was an ad agency's fault or a publication's fault and not its own mistake, the company could very well have been legally "stuck" once the deal was completed — offer for sale, acceptance of the offer by the buyer, consideration in the form of payment. Unless, of course, Macy's has some kind of advertised policy that no sale is considered final until the merchandise has been delivered and that it can unilaterally cancel sales — the sort of thing that might make sense in an e-commerce context when inventory might be uncertain.
Macy's Web site does, in fact, contain just such language. Under the section called Legal Notice, Macy's states:
This Web site may contain typographical errors or inaccuracies and may not be complete or current. macys.com therefore reserves the right to correct any errors, inaccuracies or omissions (including after an order has been submitted) and to change or update information at any time without prior notice. Please note that such errors, inaccuracies or omissions may relate to pricing and availability, and we reserve the right to cancel or refuse to accept any order placed based on incorrect pricing or availability information. We apologize for any inconvenience.
Bernard didn't technically buy the necklace on Macy's Web site — he bought it from the store, on back order, and received a receipt and was told the necklace would be shipped to him. But this presents an interesting conundrum: if people were able to buy the necklace for $47 in stores, why shouldn't online customers shopping at the exact same time have the same opportunity to score that deal? Isn't the price difference unfair to non brick-and-mortar customers? Or is it unfair to expect Macy's to honor a price that was a (pretty colossal) mistake? Scafidi says the answer to that last question depends at least in part on the intentions of the would-be buyer:
If the buyer knew that the deal was too good to be true, that would constitute mutual mistake, and a court could set aside the contract. Since the buyer whose deal was canceled saw others buy necklaces, however, it doesn't seem likely that he knew the offer was a mistake despite his initial incredulity.
One final thing:
6. If it seems too good to be true, it probably is.