Every so often, the internet lights up with a piece of news that spreads faster than a rumor at a small town barbeque. Somebody scored an absolutely unbelievable deal while shopping online – savings so outrageous they just had to humblebrag on social media. Someone else sees the post and decides to check it out, and the rest is history. In the blink of an eye, thousands of users descend on the website for a chance to score a deal that’s too good to be true. Unfortunately for the store, it’s not true at all. It’s an ecommerce price glitch, and it’s costing them dearly.
Ecommerce pricing glitches, data errors, and coupon loopholes happen more than you think. Pricing errors can include malfunctions such as bugs in the website coding, data errors or typos that lead to mismarked items, and irregular discounts and coupon loopholes. It is an ongoing challenge for small and large companies alike to maintain the integrity of pricing data and discount processes.
Recent Ecommerce Pricing Glitches
There have been several high-profile pricing glitches and shopping cart errors on major retail websites in recent months.
Here are some of the stories you might have heard about on social media.
A system glitch caused the price of many items, including pricey home goods, kitchen appliances, and even gift cards, to be set at just $14.99 in-store and online. News spread like wildfire on social media, and shoppers flocked to the site for the chance to score $500 gift cards at 97% off.
The price of $195 tote bags mysteriously dropped to $0 each + ~$10 tax & shipping when added to the online shopping cart. Social media lit up, and shoppers clamored to capture the unbelievable deal on this coveted luxury item.
Hundreds of items, including desks, outdoor items, and furniture that generally sell for hundreds of dollars, were mistakenly listed for a “reduced price” of less than $1. The glitch occurred when shoppers searched for certain keywords with specific parameters selected. And as if it couldn’t get any worse, many of the items were sold by third parties on Wal-Mart’s ecommerce marketplace, which caused an extra level of customer service nightmare for Wal-Mart.
Toys R Us
This one’s not as recent, but it’s too big to be ignored. In fact, this notorious glitch is often cited as a contributor to the downfall of this once-beloved retail giant. What happened? In short, it’s a tale of BOGO gone bad. A buy-1-get-4-free deal on a series of $0.99 toys took a seriously wrong turn when the website allowed shoppers to add ANY 4 additional items to their cart for free. Shoppers took advantage and scored expensive items like Xbox One gaming consoles, iPads, pricey Lego sets, and more at the low-low price of just $0.99 + shipping. Ouch!
Ecommerce Pricing Glitches Hurt Both Small Stores and Big Stores
When price mistakes happen in-store, there’s a cashier who might notice and refuse the sale, saving the company from a loss. But online, there’s no cashier to catch the error and stop the sale from going through.
Smaller stores with lower margins and lower amounts of cash savings can get hurt by just a few accidental discounts. It’s important to be very careful and diligent when you are small.
Bigger stores can handle a few transactions here and there with accidental discounts. However, the bigger reputations that these larger stores have can be their downfall. The word of the pricing error can spread like wildfire and the consequences can get severe very quickly. Once a user discovers an error, it usually doesn’t take long for news of the glitch to get out.
Bargain Hunters Spread The Word
There are even entire websites, social media communities, and Reddit threads devoted to helping shoppers exploit online pricing and shopping cart loopholes.
For example, one bargain hunter in the UK shared how he was able to get a brand new £200 Xbox for just £45, a pair of £229 Bose headphones for a mere £72, and £1500 worth of clothing for only £36.
Pricing Errors Are Great For Customers, but Bad For Business
The promise of scoring some crazy low-price deals is exciting for customers, but bad for the business – especially if you don’t have an expert team (us!) ready to help you mitigate these pricing glitches from happening in the first place, and on-call to help fix them as soon as they happen.
In the social media age, word of a good deal spreads incredibly fast. Thousands of orders can be placed within just minutes, sending merchants spiraling into damage-control mode.
One Chinese business called Genki Forest accidentally lost millions of dollars worth of product after an employee made a typo. 300,000 retail and bulk orders were placed in about a half-hour, resulting in a big loss and PR crisis for the store.
Here Are Some Common Types of Pricing Errors
As vigilant as you are as a seller, pricing glitches can still happen. Small companies to large retailers and marketplaces have had challenges with decimal point glitches, dropped digits, the penny glitch, coupon stacking, and other issues.
Decimal Point glitches
Big-ticket items were being sold for hundreds of dollars instead of thousands of dollars at Best Buy, when the decimal point on the sales price mysteriously moved over a digit to the left. Etsy had a challenge with their shipping rates when their decimal point moved over one digit to the right. Suddenly, sellers were being automatically charged 10x the amount of shipping fees.
Dropped Digit Errors
United Airlines accidentally dropped digits while employees were adjusting fares in the system. Fares were sold for $5.00, $10.00, and some were even free.
The Penny Glitch
Multi-channel strategies make it difficult to keep track of pricing problems. Price management software can help with their algorithms. But, automated strategies can get you in trouble. Such as auto-pricer software with the wrong settings.
If you don’t properly set a minimum price for your products, such as 0 or null, and it gets sent to Amazon. Amazon may not reject this product. Instead, it could accept the product and round up the price to $0.01.
Coupon Code Stacking
Some shoppers are smart with figuring out ways to stack coupons on top of each other. Sometimes this is totally legal and expected by the retailer. For instance, Kohls plays a very cleverly calculated game with their coupons and Kohls cash strategies. But for other companies, this can be a mistake and cost big time. Percent-off coupons on top of other percent-off coupons can quickly lower prices to almost free.
Many coupons clearly state that the coupon is only valid on the product and quantity shown. Any other use constitutes fraud. For instance, there could be a coupon that gives a shopper $1.00 off of a 6 pack of soda. In this example, a glitch may exist where a shopper could use the coupon on a single can of soda and receive the soda for free.
What Do You Do After There is a Pricing Glitch?
Always take care of your customers the best that you can.
8 Steps to Handle a Pricing Error:
- Have a reliable and routine backup solution like Rewind in place.
- Notify your expert team (us!) to immediately fix the mistake.
- Notify the platform like Amazon, Etsy, Shopify, BigCommerce, etc.
- Take responsibility for the mistake.
- File a claim with your business insurance.
- Work with buyers to cancel orders.
- Issue credits to help repair customer loyalty.
- Refund customers or reimburse partners to cover any losses when necessary.
Does the Company Have to Honor Price Glitch?
When companies get into a frenzied situation like the Genki Forest situation mentioned above, they have difficult choices to make. Do they cancel the sales and risk souring their brand’s relationship with potentially thousands of customers who think they’ve scored an amazing deal? Or do they honor the sales and take a major financial hit? Whichever path they choose, they lose. If only they had a time machine!
Although many stores choose to cancel orders after they catch the pricing glitch, it may be in your best interest to honor the sale regardless to protect the integrity of your promises – as long as your business can handle the loss. Sometimes, honoring one order with a pricing glitch can result in a flurry of activity from customers who see it posted on social media. Most importantly, you will maintain good relationships with your customers.
How To Prevent, Recover and Learn From Ecommerce Pricing Glitches
Ecommerce price glitches are best handled by preventing them before they even occur, and that starts by ensuring your ecommerce platform is rock-solid. In addition, you need the right pricing and payment management solutions and a consistent process that leaves no room for error. Make sure pricing data is translating properly across channels and marketplaces. And of course keep your ecommerce store secure from hackers.
To ensure that pricing glitches don’t happen in the future, ask your Expert Ecommerce Team to conduct the following tests and safety checks:
- Specifically, check for certain changes
- Alarms around the volume of changes
- Proactively watch for mistakes that are happening with other companies
- Look for conflicting old software that hasn’t been revoked or uninstalled that could send bad data.
- Test the full product lifecycle in simulation or using real product data. Note that if you are on a marketplace like Amazon, you don’t have the opportunity to use a sandbox.
You should also consider adding a backup solution to your ecommerce technology stack.
Not every problem in ecommerce can be resolved easily with a simple app, but this one can! Solutions like Rewind Backups make it easy for merchants to back up, copy, and restore your SaaS and cloud data. Rewind’s data backup and recovery software can backup all your critical business data, including ecommerce, accounting, productivity, and development. As developers, we love Rewind because it lets us “move fast and break stuff” without doing any damage, which helps us sprint our clients solutions forward faster. As marketers, we love Rewind because it gives us the safety net to take bold steps when they stand to make the biggest impact, like during the holidays and sales events. No more “hands off” policies hindering our ability to test, tweak, and optimize the customer experience when it really counts. It won’t prevent problems from happening, but it will give you the safety net to roll back and carry on quickly to minimize business impact.
Blayzer has been preaching the gospel of religious backups for much longer than we’ve been partners with Rewind, and we are thrilled to have such a robust solution for our ecommerce clients included in our network. Let us know if you want to line up a demo — they work with the top ecommerce platforms like BigCommerce and Shopify, plus a whole lot more. We’ll tap our partner rep and get you taken care of.
Check out Blayzer’s Ecommerce Technology Partners page for a list of tested and proven solutions we trust to keep our clients out of this kind of trouble and much more.