Cancel a Sale to a Customer

[Sparetoolparts]

Hi Guys

A customer bought an item from my online website, that I don't have instock, when I go and try to get this from my supplier I've been told a price increase and a part number change. I have gone back to my customer and told them about this and advised them if they still want the item they will need to pay extra or I can issue a refund.

The customer is demanding I ship the item at the price they paid for it and are quoting consumer rights etc etc.

My understanding on this, is I have the right to refuse and refund any order that I want; as nothing has been physically given to the client yet.

Can anyone confirm this for me?

 

[thetiger2015]

Bit of a tricky one that, as it was probably best to cancel the order and say you ran out of stock but now the customer thinks you're trying to extract more money from them.

https://www.citizensadvice.org.uk/c...f-something-is-advertised-at-the-wrong-price/

'Your legal rights depend on something fairly tricky in the law: whether or not you have a ‘contract’.

Depending on the company’s terms and conditions, you’ll have legal rights (and a contract) either:

once you’ve paid for the item
once they’ve sent it to you

If you have a contract, the company can’t usually cancel your order, even if they realise they’ve sold you something at the wrong price. They’ll only be able to cancel it if it was a genuine and honest mistake on their part that you should’ve noticed.

If you don’t have a contract and someone realises they’ve told you the wrong price, they can cancel your order.'

 

[Mr D]

Yes you can cancel. The item is no longer available at that price.

Of course the buyer can slag you off to all and sundry.

 

[fisicx]

You contracted to supply an item at an agreed price. They fulfilled their part of the contract bu placing an order and making a payment.

You are obliged to provide the item at that price. If you fail to do so you could be in breach of advertising standards.

Don't think you can get out of this. If it wasn't in stock you shouldn't have listed the part.

 

[finleydesign]

You contracted to supply an item at an agreed price. They fulfilled their part of the contract bu placing an order and making a payment.

You are obliged to provide the item at that price. If you fail to do so you could be in breach of advertising standards.

Don't think you can get out of this. If it wasn't in stock you shouldn't have listed the part.

Incorrect, might seem an odd concept for you, but there is no "entitled" clause, any company can refuse to serve anyone for any reason, joe public don't have a right to buy!!!

The only time it would become an issue, if it was widely recognised that a company had purposely advertised products at wrong prices to encourage sales, thats the only time pricing can be questions or enforced.

If he ordered, then the company can simply refuse to serve the customer doesn't have to give any reason

 

[tony84]

If the item number has changed then the item is no longer available? Sounds like it is a similar item but not identical in every way? (or am I clutching at straws?).

Just tell them you cant provide the item at the advertised price, you will refund them or they can pay the difference and have it at cost. Give them a couple of days to decide and just tell them you will refund them automatically if the answer is anything other than they want the item at cost - obviously word it better than that but life is too short.

If they choose to take you to court or report you to advertising standard then deal with it. But I have reported things to advertising standards before (a company made an advert saying 90% of mortgage brokers are guilty of bad advice) Advertising standards got in touch and the company said they would remove it... job done, nothing else happened.

 

[thetiger2015]

If he ordered, then the company can simply refuse to serve the customer doesn't have to give any reason

It's this bit though:

"I have gone back to my customer and told them about this and advised them if they still want the item they will need to pay extra or I can issue a refund."

I'd of just cancelled and refunded. Systems don't always count stock accurately and items can be sold out before the website refreshes the feed from the warehouse etc. It's just the 'pay extra' bit that's probably caused the problem.

 

[WebDesires]

just avoid the mess and say sorry ive talked to our supplier and the new part number is not the same as the old one, thus you are out of stock and will refund the order.

Then refund them, job done.

 

[Mr D]

It's this bit though:

"I have gone back to my customer and told them about this and advised them if they still want the item they will need to pay extra or I can issue a refund."

I'd of just cancelled and refunded. Systems don't always count stock accurately and items can be sold out before the website refreshes the feed from the warehouse etc. It's just the 'pay extra' bit that's probably caused the problem.

Yes its the problem bit - and annoying to the customer.

However pretty much every online seller goes out of stock / can't find the item they know they have in stock somewhere. And cancels the order.
Should be rare with decent stock control systems but does happen.

 

[fisicx]

Yes, but they didn't cancel the order. They said the customer has to pay more if they want the item. This is where it's all gone awry. If they had just issued a refund it would all be OK.

 

[iDigLocal]

I think you need to check your terms and conditions of sale but in general, if it is an honest mistake on your part, then you can cancel the order. "Sorry, there was a pricing mistake and we cannot sell at that price."

When this happens the best solution is to either

1. just tell them you haven't got it in stock
2. depending on the loss, send it out at the price they paid and take the hit then update the price. Sometimes the loss is outweighed by potential future sales. you can even tell them that in actual fact the price was wrong but you will honour it then they will feel good about your business.

As long as it is not some scam to get sales then its just a mistake, just cancel the order. You won't get the customer back though by the sounds of it. But then if they are being that unrealistic about things then that's probably a good thing.

 

[kulture]

Yes, but they didn't cancel the order. They said the customer has to pay more if they want the item. This is where it's all gone awry. If they had just issued a refund it would all be OK.

In retail, the advertised price is not necessarily the contract price. When a customer orders the product at the advertised price, this is an invitation to treat. The business can accept that offer at that price and a contract is formed, or can negotiate and suggest a different price. The customer can then agree the new price or walk away. An ecommerce retailer should not take the money until the contract is agreed and the item ready to dispatch. Most merchant providers would require the retailer to reserve the money but not take it. So no actual refund would occur.

 

[Nick Walsh Studios]

Refund and send them a 20% off code for any future purchase, the lifetime value of that client could be worth many thousands of pounds

 

[Sparetoolparts]

Thanks for all the advice guy, I think I'm just going to take it on the chin and move on with my life!

 

[Chris Ashdown]

Is it not the case that once the order has been accepted the contract is made, so if you acknowledged the order confirmation to the buyer then you made a contract to supply and you need to honor that contract

If you did not confirm (accept) the order in any way then you can cancel the offer and refund the payment

You seem to have been dropshipping and got caught out and should send the replacement item and just absorb the cost as part of life's learning

Asking for extra money would be seen as a scam and if the sales was by Ebay or Amazon then could damage your company account if reported to them

 

[wayzgoose]

Is it not the case that once the order has been accepted the contract is made, so if you acknowledged the order confirmation to the buyer then you made a contract to supply and you need to honor that contract

If you did not confirm (accept) the order in any way then you can cancel the offer and refund the payment

You seem to have been dropshipping and got caught out and should send the replacement item and just absorb the cost as part of life's learning

Asking for extra money would be seen as a scam and if the sales was by Ebay or Amazon then could damage your company account if reported to them

I've got in my terms that the contract is not accepted until I post the parcel out.

 

[Chris Ashdown]

I would doubt that is legal as rather unfair to the customer

 

[wayzgoose]

I would doubt that is legal as rather unfair to the customer

Not really unfair as it is my choice as to time when I accept the order. It's not really possible to accept an order as soon as the money is received as that wouldn't givre you any time at all to agree to it. So at what point to you consider the order is accepted?
The acknowledgement email is purely showing that an offer to buy has been received.

 

[wayzgoose]

From UK Practical Law site:

Offer and acceptance
To give the trader control over the terms of the contract, a website's terms and conditions often:

• State that by submitting an order the customer is making an offer.
• Describe when the trader is deemed to have accepted that offer, for example, only once it has issued the customer with an order confirmation e-mail, or actually dispatched the goods.

 

[LanceUk]

The first point is established in contract law, with limited exceptions.. But doesn't hurt to put it in to your standard Ts&Cs.

The second case varies the normal offer/acceptance rules and would probably be deemed potentially unfair, but not illegal. As such, the advice should also be that this would be made prominent - maybe highighted at your shopping cart and with a separate tick-box... unless this is standard practice for your industry (not dropshipping, but what you sell as I doubt your customers know you dropship) - there are many cases where unfair/onerous terms in B2B and B2C contracts have been struck out as they were not made prominent enough, or had the purchaser's attention explicitly drawn to them...

 

[MBE2017]

The first point is established in contract law, with limited exceptions.. But doesn't hurt to put it in to your standard Ts&Cs.

The second case varies the normal offer/acceptance rules and would probably be deemed potentially unfair, but not illegal. As such, the advice should also be that this would be made prominent - maybe highighted at your shopping cart and with a separate tick-box... unless this is standard practice for your industry (not dropshipping, but what you sell as I doubt your customers know you dropship) - there are many cases where unfair/onerous terms in B2B and B2C contracts have been struck out as they were not made prominent enough, or had the purchaser's attention explicitly drawn to them...

An email acknowledgement of the order with a statement to the effect a contract is entered only on despatch of goods would be fine, almost all the large companies do this to protect themselves against mispricing errors.

In the past it used to be on monies being accepted, but in mispricing cases by the time a large retailer identified a problem they might have lost thousands of £.

I was banned by Orange from buying handsets years ago, they lowered a £389 phone on pay as you go to £34 in the sale, instead of £340, I bought 20 for cash and insisted on the contract being honoured. They did so, but banned any future purchases from myself. That was approx 20 years ago.

 

[LanceUk]

I would assume the law of offer/acceptance and mistake has evolved over the last 20 years especially with respect to internet/online transactions.

However, what is clear is that any terms and conditions must be made apparent prior to offer and acceptance.. and if the term places an unsual conditions, they should be made apparent prior to the order being placed. It may be that the application of the law with respect to online transactions has evovled to make it common practice that normal B2C orders do not result in acceptance until the goods are shipped - if there is a precedent that states in the ratio that this is the case, or there are regs/laws that state this, then fine... not so much of a prob. I didn't see anythning in the distance/online selling regs that stated this...

To be safe, make sure it is made as plainly as possible to the purchaser before they click the pay button. Will save many probs in future disputes of this type.

 

[fisicx]

I remember this one:

https://en.wikipedia.org/wiki/Hoover_free_flights_promotion

 

[Scalloway]

I was reminded of this case involving Argos.

https://seqlegal.com/blog/offer-and-acceptance-online

"n 1999 Argos accidentally advertised Sony televisions for sale on its website at £2.99 instead of £299.99. Subsequently, orders were placed and confirmed by Argos at the £2.99 price. However, since a website is generally construed as an invitation to treat, no binding contract had arisen between Argos and customers whose orders had not been expressly accepted."

 

[paulears]

You're really sorry but the one on the shelf is an empty box or the wrong product so you do the refund immediately, the customer has their refund so can't really argue. If you have revealed your hand already, do the refund and accept their grumpiness, and just say sorry. If you try to help by putting the price up it won't work. Coincidentally, I was updating my web site and came across an item, with the usual PayPal buy now button that I know I've sold out of. If somebody had clicked on the button, I'd have had to say I'm really sorry but I have to give you a refund as I've run out -- sorry.

 

[Mr D]

I was reminded of this case involving Argos.

https://seqlegal.com/blog/offer-and-acceptance-online

"n 1999 Argos accidentally advertised Sony televisions for sale on its website at £2.99 instead of £299.99. Subsequently, orders were placed and confirmed by Argos at the £2.99 price. However, since a website is generally construed as an invitation to treat, no binding contract had arisen between Argos and customers whose orders had not been expressly accepted."

Pity amazon didn't do the same.
Several years back a pricing error caused by 3rd party meant a lot of FBA stock - including televisions - was sold for a tiny price.
1p for a TV.

As they were acting on seller instructions they sold a lot of stuff very quickly.

 

[Maxwell83]

Its madness to set up your T&C's so that the contract is formed when the customer places the order. I can't speak for all of them, but every big online retailer whose terms I have actually checked make it clear that the purchase is the offer, and the seller then accepts or rejects. Just like buying in person in a shop.

That is how I operate my website. You get the odd customer talking guff about breaching the contract when what they want isn't available, but its all waffle. Give them a refund and send them on their way.

 

[fisicx]

I agree but in this case the offer was accepted by the seller. They then said ‘give us more money if you want the goods’. That’s where it all went awry.

 

[UKSBD]

I was reminded of this case involving Argos.

https://seqlegal.com/blog/offer-and-acceptance-online

"n 1999 Argos accidentally advertised Sony televisions for sale on its website at £2.99 instead of £299.99. Subsequently, orders were placed and confirmed by Argos at the £2.99 price. However, since a website is generally construed as an invitation to treat, no binding contract had arisen between Argos and customers whose orders had not been expressly accepted."

My 1st ever digital camera was a Kodak DX 3700 reduced from £330 to £100
http://news.bbc.co.uk/1/hi/sci/tech/1795624.stm

 

[Maxwell83]

I agree but in this case the offer was accepted by the seller. They then said ‘give us more money if you want the goods’. That’s where it all went awry.

Yes that wasn't the best thing to do in that situation from a customer service POV, but it still wasn't fatal if there was no contract to begin with.

I always find customers respond better if you are unable to provide anything at all and so have to give a full refund. No one likes what looks like a shake down for more money, even though it wasn't intentional.

 

[FLS]

You need a clause that says that an email acknowledging the buyers 'purchase' is an offer, the acknowledgement email does not constitute an acceptance of the buyers offer and you reserve the right to cancel at any time for xyz reasons.