back to article HORRIFIED Amazon retailers fear GOING BUST after 1p pricing cockup

UK businesses that rely on a third party pricing system on Amazon were hit by an hour-long software glitch on Friday night, with items being sold for just 1p. Some retailers complained that RepricerExpress's technical cockup, which happened between 7pm and 8pm on 12 December, could leave them bankrupt. A number of small …

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  1. Steve Knox Silver badge
    Childcatcher

    Shurely

    ResellerExpress accepts liability for when its software messes up, and has an escrow account set up to handle those cases where the sale will go through, right?

    The small businesses read the TOS/licensing contracts for the software and verified that they were covered -- right?

    I mean, it's not like we live in a society where software companies can just throw products out there willy-nilly with no fear of liability, relying on excessively long contracts with overly complicated language in miniscule fonts to minimize the chance of customers even knowing their rights and a torturous legal system to dissuade those complainants who do have valid cases ... right?

    1. BongoJoe

      Re: Shurely

      Don't worry ResellerExpress have Clause 2.4 to protect themselves.

    2. present_arms

      Re: Shurely

      If that was the case, MS and others would have been bankrupt long long ago. Oh how I wish that were true :D

      1. Eponymous Cowherd

        Re: Shurely

        If that were the case, then Microsoft would probably survive, along with the other big names. What would disappear would be all of the small ISVs and developers who wouldn't be able to afford to insure themselves against a situation like this if they were directly responsible for the loss.

        The only result of making software developers responsible fir consequential losses would be vastly less choice, much less functionality (the more complex, the greater chance of a cockup) and vastly higher prices.

        So the only word processor would be MS Word, it would have the functionality of Wordpad and cost £3000.

        Exaggerating? Yes, but not by all that much.

        1. vagabondo

          Re: Shurely

          "much less functionality (the more complex, the greater chance of a cockup) much less functionality (the more complex, the greater chance of a cockup) "

          Complexity does not necessarily lead to funcionality and vice versa.

        2. Smooth Newt Silver badge

          Re: Shurely

          >wouldn't be able to afford to insure themselves against a situation like this

          Strangely enough, most hardware manufacturers have to find this sort of insurance. If the computer you are reading this on caught fire then you would be at liberty to sue your supplier, who in turn would sue the manufacturer, for the damage caused.

          Writing reliable and trustworthy software really is no big deal - you have to invest in proper validation and verification. It just seems a big deal to a lot of people because it isn't as much fun as coding, so many people don't do it and don't see why they should have to.

          So your small software vendors would have to demonstrate that they had proper processes in place to obtain the insurance at a sensible price. Just like hardware manufacturers, and for that matter plumbers and jobbing electricians, have to do now.

          1. Eponymous Cowherd

            Re: Shurely

            So your small software vendors would have to demonstrate that they had proper processes in place to obtain the insurance at a sensible price. Just like hardware manufacturers, and for that matter plumbers and jobbing electricians, have to do now.

            I work for a TickIT+ certified developer so we do follow those "proper processes" and we do have to demonstrate that we follow them. We also guarantee our software up to its full value. If it breaks you get your money back.

            It is, precisely, because we do follow rigorous procedures that we understand that they cannot ensure an absolute, 100%, fault free product (show me a product that has never failed). A contract with even a tiny chance of being taken to the cleaners for £millions isn't worth it.

            Oh, and "hardware" manufacturers certainly do limit their liability. If your handbrake fails on your new car, they may pay for the damage to your vehicle, but not for any 3rd party damage. And one manufacturer who likes to claim a "lifetime" warranty on their vehicles specifically includes an addition to their manual that you should leave the vehicle in gear when you park it (against highway code advice) because they know a certain model is prone to handbrake failure. A friend recently had his new car roll away, smash 3 parked cars and demolish a lamp post. When he tried to claim off the warranty they pointed at the clause in the manual and, effectively, told him to fuck off.

            1. paulc
              Mushroom

              parking on hills...

              BZZZTTT!!! WRONG...

              252

              Parking on hills. If you park on a hill you should:

              park close to the kerb and apply the handbrake firmly

              select a forward gear and turn your steering wheel away from the kerb when facing uphill

              select reverse gear and turn your steering wheel towards the kerb when facing downhill

              use ‘park’ if your car has an automatic gearbox.

              https://www.gov.uk/waiting-and-parking/parking-at-night-248-to-252

              suggest you read it again... all of it...

              1. pepper

                Re: parking on hills...

                And using the gear for parking and not the handbrake in the winter to avoid the handbrake freezing stuck!

                1. Fink-Nottle
                  Paris Hilton

                  Re: parking on hills...

                  pffft....

                  I pull up to a space and press the parking button - the car does the rest. I don't need to know complicated technical stuff.

                  - Mrs F-N

        3. BillG Silver badge
          WTF?

          Re: Shurely

          it had cancelled most of the orders placed on the items that had wrongly been marked with a 1p price tag.

          I thought Amazon was supposed to honor those purchases?

          For the past two years, there is a book I have kept in my "Saved for Later" list that I watch fluctuate between $8.00 and $800.00. I'm sure Amazon would be happy to rip off any chumps that paid $800 for the thing.

          1. gnasher729 Silver badge

            Re: Shurely

            A company doesn't have any obligation to sell you an item at the advertised price. Especially if the price is clearly wrong. And anyway when the price is wrong by mistake.

            The only situation where you have a comeback is if the company _intentionally_ advertises incorrect and misleading prices to lure customers in and then charges or tries to charge a different price. So if they refuse to sell because the price is wrong, then they better fix the incorrect price as quickly as possible.

        4. Red Bren
          Mushroom

          Re: Shurely

          I'm sure my IT contractor friends have professional indemnity insurance in case things go...

    3. J__M__M

      Re: Shurely

      ResellerExpress accepts liability for when its software messes up, and has an escrow account set up to handle those cases where the sale will go through, right?

      No, they have something called "small print". I would, too.

      1. Graham Triggs

        Re: Shurely

        And I wouldn't use software that has small print instead of guarantees.

        1. cambsukguy

          Re: Shurely

          Don't know about Apple but emacs/GNU stuff pretty much starts with "This software is supplied for free and we make no guarantee, express or implied about it serviceability" etc.

          I don't read much MS bumpf but I think it says "We charge money for this software (or 'This software is free - there is quite a lot of free stuff from MS'), and we don't warranty it at all"

          Maybe you write all your own OSs?

          1. DavCrav Silver badge

            Re: Shurely

            "Don't know about Apple but emacs/GNU stuff pretty much starts with "This software is supplied for free and we make no guarantee, express or implied about it serviceability" etc.

            I don't read much MS bumpf but I think it says "We charge money for this software (or 'This software is free - there is quite a lot of free stuff from MS'), and we don't warranty it at all""

            EULAs aren't worth the paper they are written on. This is a business-to-business case, so things are less clear here, but if a piece of software trashed my computer I would be looking for compensation from them. With a copy of the Sale of Goods Act in my hand as I went to their office door.

        2. TeeCee Gold badge

          Re: Shurely

          Any guarantees are worthless as you cannot guarantee against bugs.

          There are two sorts of software authors.

          1) Those who know there are bugs in there somewhere, admit to it and take action to protect themselves from litigation resulting.

          2) Fucking idiots living in dreamland.

    4. Tom Samplonius

      Re: Shurely

      "ResellerExpress accepts liability for when its software messes up, and has an escrow account set up to handle those cases where the sale will go through, right?"

      So for a 50 pound per month service, you expect to receive the vendor to hold in escrow funds equivalent to what is being offered for sale?

      1. Tom 13

        Re: Shurely

        So for a 50 pound per month service, you expect to receive the vendor to hold in escrow funds equivalent to what is being offered for sale?

        Yes, we do. The insurance cost is negligible when properly allocated across time and all clients. Unless of course your company develops a history of such mistakes, in which case you have far more significant problems anyway.

  2. Anonymous Coward
    Anonymous Coward

    If it's anything like the company I work for, our software carries a £10k maximum liability for any single failure as part of the T&C, which in instances like this would likely be a drop in the water compared to the exposure that the client companies would face.

    1. Destroy All Monsters Silver badge

      "any single failure" == "one missapplied price"

      1. Yet Another Anonymous coward Silver badge

        Ok I will cover our millions of clients for $10K/copy for any losses - the cost of the software will of course have to go up by $10K seat.

        Unless you know of a way of writing bug free software?

        1. Anonymous Coward
          Anonymous Coward

          "any single failure" = "any customer who purchased for 1p"

          "Ok I will cover our millions of clients for $10K/copy for any losses - the cost of the software will of course have to go up by $10K seat"

          Fair enough, put the price up, that's up to you, it's your business and your right to make that choice - so it's your decision. Same as the decision to use a third-party to do your pricing without ensuring they accept full liability for any screw-ups was the decision of those who chose to use this thing ...

        2. Destroy All Monsters Silver badge

          Unless you know of a way of writing bug free software?

          Between "Bug Free" and "Bug Full" is a large way to travel. Start with the first step.

          1. P. Lee Silver badge

            >Start with the first step.

            And the first step is "fail-safe."

            Health-checks which check the limits agreed by sellers when they set up the re-pricing system.

            i.e. Vary the price but don't drop below X.

            Actually, I hate dynamic pricing. When suppliers try to game the system for their advantage, I'm inclined to game the system for my advantage too or possibly just to foil their plans to extract more money out of either myself or other purchasers. It makes purchasing an unpleasent experience for me, so I start to get vindictive. How high can I push the price to stifle demand without actually buying stuff?

            1. Voland's right hand Silver badge

              Re: >Start with the first step.

              Actually, I hate dynamic pricing. When suppliers try to game the system for their advantage,...

              That is OK, provided that you can play the game too. The problem with UK is that unless the seller is a small company they can wiggle out of a dynamic pricing cockup. F.E. Ryanair did a while back. So did Tesco and a few others. It is small companies that suffer in cases like this.

              In fact, this is something where I agree 100% with some of the small Eu regional airlines which have completely abandoned their earlier experiments in dynamic pricing - it is not a game which a small player can (and should) play. If the pricing algo cocks up you cannot absorb the costs so you might as well (grudgingly) accept lower margins and lower revenues, but stay alive instead of maximizing and taking the risk of going bankrupt on a cockup.

        3. UncleDave
          Trollface

          It's not about being bug free - it's about writing to spec.

  3. PleebSmash

    price mistakes

    Almost all price mistakes like this I've seen result in cancelled orders. It's an exaggeration for any of these retailers to say they could go bankrupt.

    1. Cliff

      Re: price mistakes

      Invitation to treat - web sites invite offers to buy, contract exchange concluded on dispatch/delivery. Bankruptcy talk is hysteria - or retailers not actually sanity checking the deals they do before dispatch - and if they dispatched all their orders within the hour or so before this was spotted, I'll be a monkey's uncle.

      1. Anonymous Coward
        Anonymous Coward

        Re: price mistakes

        I've no idea why some fool has downvoted you, you're correct. It isn't the first time this kind of pricing error has occurred online (or offline for that matter), and until all elements of the contact have been formed, including acceptance, the retailer has no obligation to sell at that price.

        1. Paul 25

          Re: GCSE Computing still a joke????

          In this case many of these businesses had orders fulfilled by Amazon, from their warehouses.

          So the businesses didn't get the chance to sanity check the orders before Amazon automatically shipped them, at which point it's too late for the seller to cancel.

          However my sympathy is pretty limited, if you put control of almost every aspect of your business in other people's hands, from pricing to fulfilment, you should be aware of the risks.

          This reminds me of all those companies that had really good Groupon offers with no restrictions and found themselves swamped with orders for loss-making deals.

          1. J__M__M

            Re: GCSE Computing still a joke????

            "However my sympathy is pretty limited, if you put control of almost every aspect of your business in other people's hands, from pricing to fulfilment, you should be aware of the risks."

            How does one prepare to sell his entire holiday season inventory for 1p each? Have the bankruptcy lawyers on hot standby?

      2. Steve Graham

        Re: price mistakes

        According to newspaper reports, Amazon software was marking the deals as dispatched, i.e. complete, while the sellers were struggling to get them cancelled. The Amazon helpline for sellers was not manned.

        1. lurker

          Re: price mistakes

          I'm guessing it must have been the ResellerExpress software marking it as complete i.e. shipped. I've written software to integrate with Amazon, and normally that's definitely something the company listing on Amazon has to do itself.

      3. Ben Norris

        Re: price mistakes

        The problem with amazon's system is that they despatch the goods for the seller with no way to sanity check or intervene.

    2. Voland's right hand Silver badge

      Re: price mistakes

      Not if the order is fulfilled. Then it becomes interesting.

      F.E. When United cocked up their pricing algo a few years back they honored their tickets. Under similar circumstances a few years ago another airline (which we can safely call Scumbag Air) did not. They should not have been allowed by consumer law, but large companies in the UK can generally get away with mass murder if they want to. Small ones - not so much.

      The problem this time is with companies which have taken the AWS economy to its ultimate extreme - their shop front is AWS, their payment is AWS and their _FULFILLMENT_ is A(W)S too (the mechanical turk, warehousing and logistics). So the orders were fulfilled before the owner could do a thing. Outsourcing your core business without leaving a _SINGLE_ control point - gets you every time, all the time. It is not a question of will, it is a question of when and frankly, I am finding it a bit difficult to commiserate here - you get whatever Christmas you deserve.

      1. Anonymous Coward
        Anonymous Coward

        @voland

        They have the defence in contract law of "honest mistake" to make the contract null and void.

        1. jonathanb Silver badge

          Re: @voland

          Not if the money has been collected from the credit card, and the item is in a box with your name on it.

  4. MrT

    It's not just the pricing...

    ... I once dealt with a reseller who told me that Amazon provide the descriptions for all items for sale on the marketplace, so therefore he couldn't correct the product details to delete something that the manufacturer no longer included. Which seems like a cop-out, but it's as well I checked because the I needed the deleted item, so at least I could check the state of play and make arrangements.

    1. Ben Tasker Silver badge

      Re: It's not just the pricing...

      Had that a while back with Ebay, was selling an old phone and Ebay's catalogue description included that it had 'Wireless'

      It didn't so I skipped the catalogue entry and wrote my own - also pinged support a quick email to let them know their catalogue template was wrong.

      A week later I got an email saying my listing had been cancelled for failing to use the catalogue entry, so responded them telling them to fuck themselves and sold the phone (and everything else since) elsewhere.

    2. Anonymous Coward
      Anonymous Coward

      Re: It's not just the pricing...

      My employer sold things through Amazon at one point. We did succeed in getting details changed, but it was a PITA.

      Problem with Amazon was things like this:-

      Listings were (are?) submitted in bulk using the standard unique UPC/EAN barcode as the product identifier. We automatically created a listing of all the products we sold (correctly) identified via their barcodes.

      We then got a complaint from a customer that we'd sent him a single black ink cartridge when he was expecting the set. Turned out that an entirely unrelated seller had already created a listing for a *set* of four cartridges and wrongly used the *individual* black cartridge's code for it. Probably because he was selling cartridges in individual boxes, didn't have a barcode for the collective "set" and "borrowed" the black ink cart's barcode to keep Amazon's system happy.

      Result is that when we listed the barcode for the black cartridge alone at £1 (or whatever), this was incorrectly associated with and shown as- through absolutely no fault of our own- a set of *four* for the single cart price. Innocent customer thinks he's getting a great price, we think he's buying the black cart alone and send him that, customer complains.

      Not the customer's fault, but not ours either. The people to blame were the original third party seller and (arguably) Amazon for letting them get away with that. I can't remember if that was the case where he left bad feedback- it's hard to explain this to the customer without it sounding like a convoluted excuse- and Amazon *did* remove it because we could quite clearly show it wasn't our fault.

      1. werdsmith Silver badge

        Re: It's not just the pricing...

        I went through the process of becoming a seller on Amazon, by the end of all the hoop-jumping and waiting I had given up, walked away and used a different means.

  5. JamieL
    FAIL

    "E&OE" exists for this very purpose

    And if you're foolish to leave those three letters and one symbol out then you deserve all you get

    1. Anonymous Coward
      Anonymous Coward

      Re: "E&OE" exists for this very purpose

      "&OE

      This means Errors and Omissions Excepted. This is a significant qualification and should not be accepted by the buyer. To accept the statement is leaving the door open to the seller to change any aspect of the quotation. - See more at: http://www.brianfarrington.co.uk/2013/10/certainty-in-an-uncertain-world/#sthash.IuO99Q6g.dpuf

      1. Cliff

        Re: "E&OE" exists for this very purpose

        People are allowed to fuck up. People make typos, slip up, whatever.

      2. Anonymous Coward
        Anonymous Coward

        Re: "E&OE" exists for this very purpose

        E&OE is a significant qualification but it is most exceptional for any vendor to rely on it as grounds to make significant changes. Reputational and commercial damage is such that only a scammer would abuse it. More commonly the vendor will contact you to say something like "we've not got it in blue, I can supply it in red or give you a refund", the purchaser will find it difficult to insist on specific performance of contract if the E&OE clause has been used. It's practical, common and widespread use is to cover the kind of errors that can so easily slip through any system whether human or computer moderated.

        If you regard it as a warning sign that raises the question of whether you'd do business with "a limited company". Limited means "limited liability", if they go broke owing you something you're probably not going to get what you're owed (like delivery of that $1000 TV).

      3. Anonymous Blowhard

        Re: "E&OE" exists for this very purpose

        "This is a significant qualification and should not be accepted by the buyer."

        This is fine for B2B contracts; but for consumers the only way that this could "not be accepted by the buyer" is to not use that particular seller's service; for retail purchases you are protected by the Sale of Goods Act (and various others like Distance Selling Regulations) so as long as you're dealing with UK based companies and using a credit card with fraud protection then you are pretty safe.

        As always, if it looks too good to be true then it probably isn't.

  6. Anonymous Coward
    Anonymous Coward

    Amazon Shipped

    Amazon shipped the goods so a contract was formed. A number of small businesses which are not as legally sophisticated as the large high street or web retailers got stung before Amazon noticed and stopped the 1 penny goods getting shipped.

  7. Crazy Operations Guy

    Probably expected an INT, got a BOL instead

    probably a change somewhere in the software where the API call expected something like:

    [a list of variables], BOL_IsDynamic, INT_Price

    but got:

    [1 more variable than expected], BOL_IsDynamic, INT_Price

    so that when the request to grab the price was made, the price was set to true (True being interpreted as 1, and price is determined as pence)

    Wouldn't surprise me if it was determined to be a simple off-by-one error in the variable parsing function (EG zero-indexed array when 1-index array was expected).

    At least that's my thought on the situation.

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