Last Monday (16 May 2016), Mango clothing South Africa landed itself in hot water for incorrectly advertising selected clothing on its website for as little as R1 during their mid-season sale,
As suspicious as the sale price might have seemed, many consumers were taken in by this unusually low special.
Consumers couldn’t contain their excitement and went on an online shopping frenzy, only to find out the following day, 17 May 2016 that their orders had been cancelled.
The misled consumers notified by the retailer, saying, “We are contacting you with regard to your order placed in our Mango.com‚ online store. We regret to inform you that your order could not be processed and that we had to cancel it. We advise you to check all the details provided when you placed your order and to try and place the order again at Mango.com. We apologise for any inconvenience caused.”
To add fuel to retail fire, Mango immediately made changes to its terms and conditions after the technical issue had occurred
Mango has since released an apology on social media saying, “We regret the inconvenience that the technical issue may have caused to our customers last Monday on our website.
It was never our intention to confuse our customers in anyway. The incident was corrected without delay and customers have since been able to enjoy the mid-season sale promotion.
We have immediately notified this situation to all customers and proceeded to issue the corresponding refunds.”
But customers would have none of it and lashed out at retailer on social media platforms like Twitter and Facebook. They vented their anger and frustration for being misled on the price and having their orders cancelled.
One of the many outraged consumers posted a comment on Facebook saying, “Correction this was not dealt 'without' delay! You're dishonest and your non responsive attitude up until now has left much to be desired! Changing your T&C's on the 17th to try and cover your backsides is fraudulent!”
She added, “Oh and secondly! It wasn't last Monday! It was this Monday the 16th of May! Perhaps you should try and get the fundamentals right in your half-baked apology?””
Another posted, “You are legally bound to honour the sales to all who received confirmation of their orders. Who do you think you are dealing with? I want my order, not my refund. This is NOT over. #MANGOmustfall”
Some consumers have stated that they had lodged complaints to the Consumer Goods and Services Ombud (CGSO), but do they have a leg to stand on?
The Consumer Protection Act (CPA) sets out specific rules regarding the display of pricing, however, Rosalind Lake, director of Norton Rose Fulbright South Africa Inc, informs us that does not apply to online sales.
“It does, however, make provision for a circumstance where a seller of goods makes an inadvertent and obvious error in relation to pricing. In those circumstances, the supplier will not be bound by that price after correcting the error in the displayed price; and taking reasonable steps in the circumstances to inform consumers to whom the erroneous price may have been displayed of the error and the correct price. This reflects the common law position, which will apply to this particular sale by Mango,” explained Lake.
She added,” Under the common law a consumer is not entitled to “snatch at a bargain” in other words force a supplier to sell goods at a price which is obviously the wrong price. If many people rush to buy the goods at the advertised price (as was this case with this sale by Mango) this may be an indication that the error is obvious.”
Suppliers are in entitled to change the incorrect and inadvertently displayed prices and inform customers who are seeking to buy goods of these errors. This is because all contracts of sale require an offer to sell and acceptance of that offer.
Lake explains that in the Mango case, the retailer did not intend to sell the goods at the offered price and therefore there was no valid offer as well as no contract concluded between Mango and its customers.
“The supplier is not obliged to sell the goods at an obviously wrong price that was inadvertently advertised. In this case, Mango elected to cancel the orders placed based on the incorrect pricing and to refund customers. Even though they are entitled to do so by law, given the outrage expressed by customers on social media, perhaps this was not the best response in the circumstances from a reputational perspective, said Lake.
Change in T&C’s
However, Mango’s alteration of its terms and conditions was not a good move, feels Lake: “This situation has been compounded by the change to their terms and conditions after this issue arose. A unilateral change of terms and conditions by a supplier could be viewed as unfair under the CPA and Mango may not be able to rely on these changes.”
According to Lake, the CPA does offer protection to consumers but the Act is about fairness, and doesn’t allow consumers to take advantage of a mistake by the supplier.
While consumer’s frustration is understandable, it is very unlikely that they will be successful in any claim under the CPA, without evidence that Mango had priced the selected items intentionally as a tactic to bait them into visiting the online store, with no intention to sell products at the price advertised.