The Right Way and Wrong Way to Handle Pricing Errors

Pricing errors are a fascinating social experiment. It starts with a website or store mistakenly pricing an item at an outrageous price. Thanks to the power of those old InterTubes, it spreads like wildfire. Before you know it, Twitter is down under the load of people tweeting their good fortune, Facebook changes their terms of service to reflect some other way they think they need to protect themselves, and sites like Woot write wry salutes.

What happens next is interesting. First, the retailer pulls the offending item, causing a hue and cry from those who missed it, and a series of gloating posts from those who got in on the deal...or did they? The retailer has a choice at that moment: honor the error, or issue an apology but cancel the orders. Consumers seem to think there is some sort of legal requirement for this, but the laws are based state by state, and most do not have such protection. PR consultants debate what gets more press: reneging and getting TV coverage of the outcry (any PR is good PR, remember), or "doing the right thing." Debates are spawned, local TV news pieces do their bit, and so it goes.

Case in point, as a study in contrasts:

- Best Buy prices an $1800 TV at $9.99. The cycle kicks off as described. Best Buy cancels the errored orders. The pundits debate, the internet wails.
- ThinkGeek's server went a little schizo, and accidentally priced items as free. The cycle erupts as expected. ThinkGeek says "Whoops! Our bad. Shouldn't punish the customer; keep what you got." The web quietly rejoices and Consumerist celebrates.

The obvious argument is that BestBuy is far larger than ThinkGeek, so they couldn't absorb such an error. But Best Buy's CMO, Barry Judge, has been quite vocal and transparent about their errors before, so why not use this as an opportunity? The obvious answer is the results: ThinkGeek did the right thing, and barely was recognized. Best Buy does the wrong thing, gets tons of PR, has an opportunity to make amends, and all of the web will be talking about Best Buy.

This formula repeats, as well, as Apple, eBay, Amazon and more have shown. Until we as consumers reward companies with PR for doing the right thing as loudly as we condemn them for doing the wrong thing, the cycle will repeat.

Comments

Loyalty Review: Kohl's Yes2You

As some of you know, I've spent over 15 years in the customer loyalty space. So, when I come across a new retail loyalty program, I can't help but see the pluses and minuses. After this many years, it's kind of ingrained. Periodically, I'll share my thoughts with you. Today, it's Kohl's turn under the scope. Let's have a look, shall we? I've divided the review up into three sections: what's good about the program, what's bad about the program, and what I'd change about it. That last one has some actual value: I charged hundreds of dollars per hour for loyalty program consulting, and had over a dozen clients, before I moved to JustAnswer FT. But, being a pandemic and all, I'm giving it away for free here. Kohl's, you're welcome. Here we go! The Good Sign up is opt in Seems odd to praise Kohl's for this, but in department store loyalty, this is a rarity, and a smart one. It means the customers who are opted in are already prime...

Revisiting Star Trek: The Next Generation: Season 1

I recently started rewatching Star Trek: The Next Generation from the beginning. I have nothing but fond memories of the original run in the 1980s, given how excited I was for a new Trek series in my lifetime (I had only reruns and the movies to stoke my Trek interest), and it recently occurred to me that, while I diligently consumed every TNG episode, I had not experienced the series since it's original run. Why did I do this? Well, a few reasons: With the triumphant return of Sir Patrick Stewart to the smaller screen as the venerable Jean Luc Picard , I thought it would be interesting to contrast this version with the previous, and see how far he has come. It would add color to the character, as well as Sir Patrick. Frankly, with the COVID19 lockdown, the series I have binged upon have been intense, dark, and disturbing. Combined with the activity of the world, including insane politics, homicidal police who seem to view people of color as "prey," rather than their ch...

The Icarus Effect

This morning's news started with the latest grim proof of overdevelopment in a tough sector: SkyBus Airlines shut down , less than year from when it started. Never heard of Skybus? Not surprising; they chose to focus on trips from Ohio to the West Coast for ridiculously low fares. Yes, you read that right: the airlines' unique niche was that they focused on trips from Ohio . Was air travel such an amazingly profitable business that we needed that much segmentation and focus? Of course not. A year ago, when Skybus was just getting off the ground (har har), fuel costs were at an all time high. United was still in bankruptcy; Delta, a fellow airline with a major hub in Ohio, was just exiting Chapter 11. And yet, "irrational exuberance" led investors like Nationwide Mutual Capital, Huntington Capital Investment Co., and Battelle Services Co. to ignore the obvious signs of risk, and dive into what was a dubious investment. Today, they, and the passengers who were lured by ...

Tretakoff Musings

Search This Blog