David Flynn14 November 2008, 12:00 PM
It was a deal that seemed too good to be true, and certainly too good to pass up: an $800 desktop PC offered for just $350. Now, Dell says it was just a mistake.
There’s an old saying that a deal which looks too good to be true usually is. But what happens when that deal is offered by a leading company which pioneered the art of online direct-to-customer selling and built its entire business on online selling? What if the company was known for aggressive pricing and often excellent ‘limited time only’ discounts to get customers clicking?
You’d probably reckon that deal would be kosher, and certainly too good to knock back.
That’s what drove hundreds of wanna-be buyers to place an order with Dell for a desktop PC worth $799 but advertised online for just $350. News of the deal in question – for a Vostro-brand desktop sporting a dual-core Intel processor, 2GB of memory and 160GB hard drive, and bundled with a 19 inch monitor – was circulated through the discussion forums at sites like
OzBargain and
Whirlpool, with some eager buyers placing orders for several systems.
This turned out to be a
SNAFU rather than a special, however, and Dell is refusing to honour the bargain basement price.
Marty Filipowski, senior manager of corporate communications for Dell Australia and New Zealand said that while “a small number of customers tried to make purchases under the discount, we did not accept these orders or send acknowledgements stating we accepted them. We are contacting these customers now and believe they will understand the discount was an inadvertent error”, Filipowski told us, “and we (have) reviewed the process to prevent future mistakes”.
Filipowski told APC that Dell was offering a 10% discount off the PC’s full $799 price “as a gesture of goodwill”. But that’s not nearly enough for would-be buyers who placed their order based on a 55% discount.
That includes Sasha Utjesenovi, who contacted APC to say that he ordered one of the cut-price computers, “but it seems Dell are ringing customers to say that the price on their Web site was wrong and that you can either purchase the system for $799 or cancel the order. I haven’t received a phone call yet, but I do have an email acknowledging that Dell has received my order. My credit card hasn’t been charged at this time.
Utjesenovi cited Dell’s own Terms and Conditions which state ‘No Contract shall come into existence until the Customer’s order has been accepted by Dell and such acceptance has been received by the customer. The contract shall deemed to be concluded at the time and place where such acceptance is received by the Customer.’
“I believe the email acknowledgement that I received indicates that there is now a contract in existence” Utjesenovi says.
However, Filipowski says that the only emails sent by Dell were to to acknowledge the order had been placed rather than to confirm Dell’s acceptance of the order.
“As part of the initial order process, customers receive two emails. The first acknowledges the order when it is submitted. The second is an order confirmation and the email clearly states this. This second email is sent only after we have accepted the order (and) in this instance, no customer received the second email.”
Teresa Mullan, from the
NSW Office of Fair Trading, told APC that “Whether or not a trader is obliged to complete the transaction will depend on whether a binding contract has been formed. Generally if consumers have not paid for the goods (ie, credit cards debited) one of the elements which constitute a binding contract, that of ‘consideration’, has not been met and the trader may withdraw the offer.”
While no purchasers of the Vostro systems appear to have had their credit cards debited some buyers opted to pay money directly into Dell’s bank account through an online bank transfer, and that’s somewhat more of a grey area.
“It’s not the same as the company taking the money from (the customer), it’s about them transferring the money to the company” Mullan says. “It’s a tricky one. The obligation to complete the transaction depends on whether a binding contract has been formed and that’s a matter of contract law which has to be determined by the
NSW Consumer, Trader & Tenancy Tribunal or a lawyer.”
Mullan suggests that “if people are concerned that the company has engaged in misleading or deceptive practices, they can contact us for help. If a consumer comes to us, what we can do is contact Dell and try and negotiate on the customer’s behalf. Often what we do is mediate between the parties to try and get an outcome that everyone’s happy with.”