Do Stores Have to Honor Price Flubs?

NEW YORK (MainStreet) – Apple’s coveted iPad 2 just came out four months ago and sales are still strong, so it will be a while until we can expect to see any kind of price drop on the tablet. That’s why it was so surprising to see Sears offering the Wi-Fi-only version of the device for just $69 – a full $430 less than its suggested retail price.

The deal seemed too good to be true, and indeed it was—Sears quickly acknowledged that it was a pricing error and fixed the problem. And in a move that angered many customers who thought they’d made out like bandits, Sears then canceled orders at the $69 price and refunded customers' money.

Sears’ decision comes as no surprise, however. Most online retailers have been victimized by accidental price errors at one point or another, and most react the same way. A couple years back, Best Buy briefly had a 52-inch flat screen TV on sale for just $10, a whopping 99.7% discount off the original price. Like Sears, Best Buy refused to honor the price, and refunded customers the $10 they had paid for the television. And when Sears itself accidentally took 50% off many snowblowers last winter, it pulled the offer and canceled the orders.

As a general rule, if the retailer catches the error before the package has been shipped, it will do what Sears did and refuse to honor the price. Sears even has a disclaimer to that effect in its terms of service, noting that “In the event of a pricing error on the Sears Site, Sears reserves the right to cancel any orders resulting from such pricing errors.”

Brad Wilson of deal site BradsDeals says that despite the cries of some customers that Sears is legally obligated to honor posted prices, it is indeed within its rights to cancel the orders.

“More often than not, it’s not something that works out for consumers,” he says. “From a legal standpoint, a price is merely an offer, not an obligation.”