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What to do if the price tag isn't right

It’s a retailer’s worst nightmare, and a delight for consumers – realising a pricing error has underpriced goods for sale.

It rarely happens, but if it does strike your business, here are some tips on how to handle it.

First, correct the error. You want to maintain your customers’ goodwill, and the health of your business, so communicating with them is key.

From a legal point of view, you and your customers have rights and obligations when things go askew. The Consumer law section on Business.govt.nz explains this in more detail. The Consumer Protection website (external link)  also has useful information about what customers expect when buying goods and services. 

The good news is you don’t have to sell goods at the displayed price if it’s wrong. To keep goodwill with your customer, explain that you’ve made a mistake. But bear in mind that you have obligations under the Consumer Guarantees Act (external link)  when it comes to services – and that includes pricing. You have to take reasonable care to avoid mistakes.

The situation is less clear when you have an online sale, so it’s best to get advice and put appropriate measures in place to avoid getting into difficulties in the first place. Make sure any price displays are consistent with what you're charging customers at the checkout. You want to avoid that awkward moment when you tell your customer the $199 leather sofa they’ve grabbed is actually $1,199.

Continuing to deliberately advertise goods at the wrong price will break fair trading laws.

Continuing to deliberately advertise goods at the wrong price will break fair trading laws.

If you realise a mistake after the sale, then you can’t ask the customer to pay extra – unless the customer knew there was a mistake and the price was considerably less than it should have been.

For example, if a shop assistant sold a jumper at $30, only realising later that it should have been $40, he can’t ask the customer to pay more.

However, if a salesperson sold a $500 television to a customer but accidentally charged only $50 to her Eftpos card, then the customer can be asked to make up the difference.

If you're holding a sale, make sure you describe it accurately, such as if it only runs for a limited time. Otherwise those "special" prices splashed across your website can turn into usual prices – and that can be misleading under fair trading laws.

The Commerce Commission website (external link) has further tips for businesses on pricing.

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