A Bargain or a technical problem? Pricing errors in Canada's e-commerce

Author

Option consommateurs

Organization

Option consommateurs

Published

2018

Summary

Every year, companies mistakenly advertise their online products for sale at a lower price than market value. With the internet, it can take only a few minutes for a company to sell thousands of products. Unfortunately, if an error has occurred in the pricing, this can cause significant losses for the merchant. When merchants realize this mistake, they will often cancel the order, sometimes with some compensation for the consumer. The legality of this action is an open question in most provinces. Only in Quebec is it mandated that a consumer who purchases a product at an erroneous price is entitled to keep it. The purpose of this study is to determine whether or not it would be in the interests of the other provinces to legislate on this matter quickly. With this question in mind, Option consommateurs (OC) surveyed over 1000 Canadian consumers and studied the websites of 50 companies visited by Canadians.

This study found that 24% of the 1000 respondents had previously purchased a product online for which the advertised price was wrong. As online retail activity continues to grow, the number of pricing errors appears to be growing with it. In 2017 alone, dozens of such cases were recorded. This study also found that consumers had very few recourse options in the event of erroneous pricing. One merchant refused to be bound by the representation made on their website. Another gave itself the right to demand a higher price than the one advertised. To improve access to justice in these cases, OC recommends three policy interventions. Firstly, provincial legislatures should amend their laws in order to specify that it is forbidden to sell a good at a higher price than advertised, and that once a contract is concluded, an order is placed. Secondly, OC recommends the adoption of a Price Accuracy 2.0, which specifies a price threshold at which a price should be honored or refused. Finally, it is recommended that the federal legislature update the Canadian Code of Practice for Consumer Protection in Electronic Commerce in order to clarify issues pertaining to erroneous pricing.

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OCA Funded Research
This research received funding support through the Office of Consumer Affairs' Contributions Program.


Contact information

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50 Sainte-Catherine street West, Suite 440
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H2X 3V4
Telephone
(514) 598-7288
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Source: Consumer Policy Research Database

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