Amazon pricing blunder a warning to business

Online retailers must make sure their terms of business are clearly set out in the wake of Amazon UK's high profile pricing...

Online retailers must make sure their terms of business are clearly set out in the wake of Amazon UK's high profile pricing blunder, lawyers have warned.

The e-commerce giant last week said it would not be honouring the orders of customers who paid just £7 for Hewlett-Packard Pocket PCs that normally retail for around £270.

Amazon closed its UK website for almost an hour on 19 March, after the pricing error led to a rush of purchases with some shoppers thought to have placed orders for 50 or 60 devices at a time.

In a statement, Amazon said, "In keeping with our conditions of use and our pricing and availability policy, we will be cancelling orders made for the HP iPaq Pocket PCs at the incorrect price." Buyers were given the choice of purchasing devices at the full price or cancelling the order.

Some users who contacted Computer Weekly said they expected Amazon to honour the purchases because they had been sent an e-mail confirming the purchase.

However, the company's terms and conditions state that, "there is no contract between and the customer for an item until accepts the customer order by e-mail confirming that it has dispatched the item. Until that time, is within its rights to not accept any customer order."

Michael Archer, partner at IT law firm Beale, said Amazon's conditions of use, particularly with regard to the confirmation e-mail, are not entirely clear.

"Is [the confirmation e-mail] meant to be acknowledgment of the order, or confirmation of the contract?" he said. "Amazon's [confirmation] e-mail provides information on how 'to cancel this contract'. It could be argued that Amazon is stating this is acceptance of the consumer's offer, and it would be surprising if a court were to decide that no contract existed at this point."

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