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Dell Could Face Fines For Recent Price Errors

By - Source: Tom's Hardware US | B 20 comments

Those 'fine' deals could cost Dell.

It's been rough times for Dell's Taiwan online branch, as it was ordered by the Taiwan government to honor orders for the erroneously priced 19-inch LCD monitor for $15. Unfortunately, Dell has committed several other pricing errors that customers took advantage of.

Normally, a retailer covers itself with a clause concerning pricing errors. Taiwan's Consumer Protection Commission, however, isn't content to let Dell just walk away from simple pricing errors.

On July 5, 2009, Dell's Taiwan site featured another mispriced product, which predictably was instantly popular with internet shoppers. According to PC World, Dell Latitude E4300 laptop that normally sells for NT$69,000 (US$2,101.34) sat at NT$18,500 (US$563.40) for eight hours on Sunday. The drastically reduced price had 40,000 orders for the laptop.

Dell already canceled all the orders for the products at the incorrect price, and offered to buyers of the LCD monitor a NT$1,000 (US$30.32) coupon. The AP reports that buyers of the laptop received a NT$20,000 ($600) coupon, while PC World wrote that it was a NT$3,000 (US$90.95) coupon.

The coupons aren't good enough for the Consumer Protection Commission. "If Dell's Taiwan office does not have the power to decide this issue, then the top offices at Dell should have to hear the disappointment and indignation of Taiwanese consumers so they will quickly and sincerely come up with a concrete response," the commission said, quoted by PC World.

Dell could actually be faced with fines should authorities decide that Dell broke the law.

"If we find Dell to have broken the law, the company could be fined NT$50,000 [US$1,500] to NT$25 million [$758,000]," Taiwan's Fair Trade Commission Deputy Chairman Wu Hsiu-ming said to the AP.

Dell is now reportedly working with the commission for a solution.

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  • 4 Hide
    nekatreven , July 7, 2009 6:36 PM
    ouch. I'm sure someone got fired for this one...
  • 5 Hide
    mikepaul , July 7, 2009 6:44 PM
    I realize there'd be NO Internet shopping if all websites had to conform to "no backing out of a bad price" rules, but the sheer gall of these companies just blythely going "ooops, sorry, order cancelled" hundreds of times a year with no adverse impact makes me happy to see some payback...
  • 1 Hide
    nekatreven , July 7, 2009 6:56 PM
    @mikepaul
    Every Dell site I've ever been on has that disclaimer warning they'll cancel orders that result from pricing errors. I know what you mean though...they probably hide behind it. I think the coupon idea they did in this instance might actually be perfect. At least it costs them a little something and the customer gets a little credit :) 

    Heh...I've always wanted to find a pricing error and then order and see if I could talk around the disclaimer.

    "No, no... you see my order didn't arise because of the pricing error, I was going to buy the thing anyway! This was just a, a bonus, that appeared when I went to check out..."
  • 1 Hide
    doc70 , July 7, 2009 7:12 PM
    mikepaulI realize there'd be NO Internet shopping if all websites had to conform to "no backing out of a bad price" rules, but the sheer gall of these companies just blythely going "ooops, sorry, order cancelled" hundreds of times a year with no adverse impact makes me happy to see some payback...

    my thoughts exactly... but they'll work out a deal sweet for them and not for the costumers...
  • 0 Hide
    chaohsiangchen , July 7, 2009 7:13 PM
    mikepaulI realize there'd be NO Internet shopping if all websites had to conform to "no backing out of a bad price" rules, but the sheer gall of these companies just blythely going "ooops, sorry, order cancelled" hundreds of times a year with no adverse impact makes me happy to see some payback...


    I'm from that shitty little island and I can tell you that, well, internet shopping is quite different there. People still mostly use cash there, and money is paid to delivery man rather than via commercial banks. The amount of fraud and scam is so high, that people don't trust credit system in general. Price error is almost impossible on online stores run by Taiwans themselves, since they know that's exactly what's going to happen.

    Online shopping is definitely will not take off in Taiwan. It doesn't matter anyway. The island is so small that you can find nearest computer store within 30 seconds of walk.
  • 2 Hide
    Nakecat , July 7, 2009 7:44 PM
    First, PC World was right at 3000 NT coupon, but later Dell Changed their mind to 20000 NT.

    Second, the 20000 NT coupon will only be valid if you buy the same model E4300, sounds good for 69000-20000 right? Wrong, because Dell over price the laptop. People can buy the same laptop from retail at around 40000 with discount, so dell is trying to play the game while make a lot of outrage people.

    Third, Dell doesn't care about Taiwan branch since it's small, which make people so mad in Taiwan. Dell paid way much better when the same thing happened in china a while back, because that's where the cash cows are.
  • 1 Hide
    Platypus , July 7, 2009 7:47 PM
    doc70my thoughts exactly... but they'll work out a deal sweet for them and not for the costumers...

    Is it Halloween yet? Why would Dell worry about the costumers?
  • 2 Hide
    velocityg4 , July 7, 2009 9:00 PM
    I think the Dell should have to honor the price. In the US if you go in a retail store and a piece of merchandise is clearly priced they must honor that price. So I do not see anything different from an online store nor catalog for that matter.

    It's not like a screwed up ad in the newspaper or a magazine. Which has to go through a third party for printing making the reseller not liable for misprints.
  • -1 Hide
    velocityg4 , July 7, 2009 9:00 PM
    I think the Dell should have to honor the price. In the US if you go in a retail store and a piece of merchandise is clearly priced they must honor that price. So I do not see anything different from an online store nor catalog for that matter.

    It's not like a screwed up ad in the newspaper or a magazine. Which has to go through a third party for printing making the reseller not liable for misprints.
  • 0 Hide
    techtre2003 , July 7, 2009 9:10 PM
    I think this type of thing happens more than many people realize; and not just by Dell. I don't do that much shopping on the internet and I've had 3 orders canceled. One was by Amazon, one by the Discovery channel store, and the other by a big PC components company (don't remember which one). One of those was a price error and the other two were great sale prices that I ordered multiple quantities of; neither site had a limit posted. In only one of those cases did I even get an email that my order was canceled.
  • 0 Hide
    acecombat , July 7, 2009 9:58 PM
    Even if they are fined the full NT$25m they would be better taking that then shipping the units at the reduced price.
    NT$69,000 - NT$18,500 = NT$50,500 loss on normal sale price
    NT$50,500 x 40,000 orders that were placed = NT$2,020m loss
  • 1 Hide
    Anonymous , July 7, 2009 10:14 PM
    The Taiwan Consumer Commission looks pretty toothless frankly. Looking at the paltry maximum fine they could face, I think Dell would prefer to take the hit of being fined rather than be forced to sell 40,000 laptops at over US$1,500 below retail each! For comparison the maximum fine the Commission can impose (assuming the article is correct) works out to be just $18.95 per cancelled laptop order, far less than the coupons they've already given out
  • 1 Hide
    jerreece , July 7, 2009 11:24 PM
    Dell obviously has a SERIOUS problem with posting their prices on their Taiwan based website. I think the commission ought to come down on them pretty heavily to force Dell to correct whatever problems they're having in their numerical conversions.

    Without forced change, apparently Dell is going to keep posting ridiculously erroneous prices on items. :( 

    Though I'd love to buy a $2,000 laptop for $600 (if it was really worth $2k).
  • 0 Hide
    Wayoffbase , July 8, 2009 3:51 AM
    nekatrevenouch. I'm sure someone got fired for this one...

    you would think they would have been fired the first time...
  • -1 Hide
    Silluete , July 8, 2009 6:07 AM
    Anybody else think taiwan dell web has hacked? or just me...
  • 0 Hide
    ohim , July 8, 2009 2:10 PM
    I don`t understand why is Dell supposed to pay any fines ... how retarded this world has come to realy belive an LCD will sell for only 30$ and a 2k $ laptop will sell for 500$ ... is the world filling with morons and we need some organisation to help them in their daily life ? Is the global IQ dropping that rapid ?
  • 0 Hide
    yao , July 8, 2009 2:56 PM
    Why does Dell make such a stupid mistake all the time. It happened on Dell US before. fortunately, they don't need to honor that.
  • -2 Hide
    computabug , July 8, 2009 3:41 PM
    If Dell wants to stay in business, they better fulfill every single on of their orders, even the ones with incorrect prices.

    Working with the commission? What's there to work on? Just ship out the products to the customers like any trustworthy company would do...
  • 1 Hide
    kal326 , July 8, 2009 5:36 PM
    computabugIf Dell wants to stay in business, they better fulfill every single on of their orders, even the ones with incorrect prices.Working with the commission? What's there to work on? Just ship out the products to the customers like any trustworthy company would do...


    It probably has something to do with the $61,517,600US loss they would incur by shipping the laptops alone. The vast majority of the 40,000 orders for the laptop would probably all people that were only purchasing the laptop because it was roughly 25% of its original price and most of them probably found out about it because of some deal site.

    If 4 or 5 people that were legitamitly going to purchase the machine at full price ordered before Dell realized the error I would say honor the error similar to an incorrect sign in a retail store. But when 40,000 orders are placed to expliot an error it is a vastly differant scenario in my opinion. If 40,000 people showed up to a store in a few hours to purchase something with an incorrect price the issue would have been resolved within a few, if not one transaction.
  • 1 Hide
    agentbb007 , July 8, 2009 7:28 PM
    I totally agree with kal326. You cannot compare a huge online retailer to your neighborhood best buy. If you local best buy accidentally posts a $2k laptop for $500 they will find the error after the 1st laptop is sold and are only out $1500 not a big deal. But when 40,000 orders are placed that's completely different and a company shouldn't be required to sell any of those units.