South African Airways (SAA) customers are up in arms after the airline announced that it will be rescinding tickets that the customers bought at a discounted rate online.
According to reports, from February 25 to 27, SAA advertised a 72 hour sale, during which time customers bought business class tickets for a flight from Johannesburg to Abu Dhabi for R858.72. SAA claims that it is not obliged to honour the purchases of these tickets as it was an error that these flights were advertised at such a low rate.
The airline said: “[SAA is] not obligated to provide services for compensation that is erroneously published and commercially unfeasible. As a result, because the fare you booked was invalid, we have cancelled your reservation and ticket.”
A spokesperson for SAA said in a statement that the airline will be refunding customers for the cost of their tickets.
The consumer’s rights
Consumer Goods and Services Ombud Neville Melville believes that the Electronic Communications and Transactions (ECT) Act 25 of 2002 would apply in a situation such as this.
“Until such times as this area of law is considered by the courts or the National Consumer Tribunal, the law will remain uncertain. However, we believe that the courts may adopt the approach suggested in our advisory [note 10: E commerce],” he said.To view the advisory note, click here.
“Our research indicates that internationally there is a widely held view that by clicking on the “I accept” button, the transaction becomes binding. The ECT Act however provides that the parties may themselves agree as to when an agreement is concluded.
“This is an important milestone as an offer may be withdrawn prior to acceptance. If the point at which an agreement is concluded is not mentioned in the agreement, we are of the view that in terms of the ECT Act the default position is that the offer made by the supplier is a binding offer open to acceptance by the consumer,” explained Melville.
Melville added: “A supplier can specify in its terms when an ecommerce transaction is completed, so long as this is brought to the attention of the consumer. If it does so and indicates that the contract will be formed only if the customer's order is accepted by the seller, the seller is not bound by an error in the price.
“If, however, the supplier does not make such a stipulation, the default position is that the agreement as well as any error in the price becomes binding upon acceptance by the consumer. This is unless there was such a large discrepancy with the usual price that a consumer ought to have realised that there was a mistake.”
Melville points out that consumers who are unhappy with the situation with SAA could approach the National Consumer Commission to lay a complaint against SAA.
Incorrect pricing
According to a report by the Consumer Goods and Services Ombud (CGSO), suppliers are required to offer consumers goods at the lowest advertised or displayed prices, however, in the event that there was an error with the displayed price, “the supplier is bound until the consumer is informed.”
It goes on to explain that “if the consumer acts in a manner consistent with buying the item prior to being informed of the error, the consumer is entitled to pay the error price.”
The CGSO adds: “Suppliers need to bear in mind that in addition to allowing consumers to buy at lower prices or compensating them, the suppliers run the risk of having to pay administrative fines for incorrectly advertising prices.”
In a case relating to a pricing error, it was stated that “the retailer has the opportunity to inform the customer of the error and ensure that before a transaction is concluded that the right price is given to the consumer.”
Melville highlights a case where a man (Mr D) was quoted R6 601.51 for material for decking, which he agreed to and paid. He also went to the warehouse to view the product before paying.
However, a few days later Mr D received a phone call informing him that the quote was incorrect and that he needed to pay an additional R12 000 before his materials could be delivered. Mr D wanted the decking delivered without having to pay more than he was quoted for.
The CGSO stated: “There is thus no evidence to justify the inference that Mr D knew or should consequently have realised that the prices had been wrongly quoted.
“It therefore appears, without any proof to the contrary, that Mr D did not know of the mistake and therefore did not try to ‘snatch up an offer’. A valid contract therefore came into being and the supplier will therefore have to deliver the goods as ordered and paid for.
“Based on the facts of this case, the information and evidence furnished to this office and on the principles of reasonableness and fairness, this office cannot make a finding that the contract is invalid. It is accordingly recommended that the supplier honours the price quoted.”
An issue that needs to be considered when looking at the complaints from SAA customers, is whether or not their actions can be defined as “snatching at a bargain” or not, as they purchased the plane tickets assuming that they were part of the special that SAA had been advertising.