Consumer Rights: Pricing Mistakes Explained

Pricing errors in shops are a common occurrence, often leading to confusion and questions about consumer rights. Imagine spotting a luxury item at a fraction of its usual cost or seeing a significant discount applied to a product by mistake. Do you have the right to insist the shop honours the price? This article explores the rules surrounding pricing errors in the UK, clarifies when shops are obligated to honour the incorrect price, and examines how consumer law applies in such scenarios.

The Legal Framework Behind Pricing in the UK

Consumer law in the UK is primarily governed by legislation such as the Consumer Rights Act 2015, the Contract Law (as part of English common law), and the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). These laws work together to protect both consumers and businesses, ensuring fair treatment and clear communication in transactions.

When it comes to pricing errors, it’s essential to differentiate between two stages of a transaction:

1. Invitation to Treat

2. Offer and Acceptance

These stages determine whether the displayed price is legally binding or if the shop can refuse to sell the item at the marked price.

What Is an Invitation to Treat?

When an item is displayed in a shop window, on a shelf, or on a website with a price tag, it’s legally classified as an “invitation to treat.” This legal term means the shop is inviting customers to make an offer to purchase the product, but it is not making a binding offer to sell. The price displayed is part of the invitation and not a contractual promise.

For example:

• A dress marked as £20 in a shop is an invitation for the customer to bring it to the till and offer to buy it for £20.

• At the till, the retailer can either accept or decline this offer.

In short, the displayed price doesn’t obligate the retailer to sell the product for that amount. The contract is only formed when the retailer accepts the customer’s offer to buy.

How Does the Law Protect Shops from Pricing Errors?

The principle of “invitation to treat” ensures retailers are not forced into selling products at incorrect prices, especially when errors are genuine. However, consumer law also requires retailers to act fairly and avoid misleading practices.

Common Scenarios of Pricing Errors

1. In-Store Errors

A shop mistakenly marks an item at a lower price, such as £5 instead of £50. When you bring it to the till, the retailer can correct the error before completing the transaction. In this case, they are within their rights to refuse the sale at the lower price.

2. Online Errors

Online pricing errors can be more complex due to the additional laws governing e-commerce. When you place an order online, this is generally considered an “offer” to purchase the item at the advertised price. The retailer can accept or reject the order, and most online retailers include terms and conditions stating they reserve the right to cancel orders in case of pricing mistakes.

Do Shops Ever Have to Honour Incorrect Prices?

In most cases, shops are not legally required to honour incorrect prices. However, there are exceptions where consumer law may come into play:

1. If a Contract Has Been Formed

If a shop accepts your offer to purchase the item (e.g., by taking payment or issuing a confirmation email for online purchases), a legally binding contract is formed. Once this happens, the shop is obligated to honour the price agreed upon in the contract. Canceling the transaction at this stage could breach contract law, and the consumer might have grounds for complaint.

2. Misleading or Unfair Practices

Under the Consumer Protection from Unfair Trading Regulations 2008 (CPRs), retailers are prohibited from engaging in misleading or deceptive practices. If the incorrect price is part of a wider tactic to lure customers into the store or onto a website, the shop could be found in breach of these regulations. For example:

• Advertising an incorrect price in a promotional flyer to attract customers but refusing to honour it upon arrival in-store.

• Displaying a “sale” sign with misleading discounts.

If a pricing error leads to significant consumer detriment or is deemed deliberately misleading, trading standards authorities could investigate and take action.

3. Online “Click and Collect” Purchases

When shopping online, the process often involves multiple steps:

• Adding an item to your cart.

• Proceeding to payment.

• Receiving an order confirmation email.

Legally, the contract is usually formed when the retailer confirms your order via email. If you’ve received this confirmation, the retailer may be obligated to honour the price unless their terms explicitly allow for cancellations in the event of errors. Always check the retailer’s terms and conditions for clarity.

Examples of Real-World Cases

Case 1: The Famous Tesco Pricing Error

In a well-publicized case, Tesco mistakenly advertised a television for £49 instead of £349 online. Thousands of customers placed orders, but Tesco canceled them, citing the error. While disappointed customers argued that the retailer should honour the price, Tesco’s terms and conditions explicitly allowed for cancellations in cases of pricing mistakes. No legal action was taken.

Case 2: Local Retailer Offers Item at Wrong Price

A high-street retailer mistakenly marked a coat at £10 instead of £100 in-store. A customer brought it to the till, but the shop refused to sell it at the incorrect price. In this case, the retailer acted within their rights because no contract had been formed, and the invitation to treat principle applied.

Case 3: Misleading Online Sale Advertisement

In another case, an online retailer advertised a “50% off” sale but failed to apply the discount to some items during checkout. This led to complaints to trading standards, as the practice was considered misleading under CPRs. The retailer was fined and required to clarify its pricing.

What Can Consumers Do in the Event of a Pricing Error?

If you encounter a pricing error, you have a few options:

1. Politely Raise the Issue

Many retailers may honour the incorrect price as a goodwill gesture, even if not legally required to do so. This is particularly common in cases where the price discrepancy is minor.

2. Check the Terms and Conditions

For online purchases, carefully review the retailer’s terms. Look for clauses related to pricing errors and cancellations.

3. Report Misleading Practices

If you believe the pricing error is part of a deliberate or misleading tactic, report it to Trading Standards or the Advertising Standards Authority (ASA).

4. Consider Legal Advice

In rare cases where a contract has been formed and the retailer refuses to honour the price, you may seek legal advice or file a small claim in court.

Key Takeaways for Consumers

• Displayed prices are not binding offers: Whether in-store or online, a displayed price is usually an invitation to treat. Retailers can correct pricing errors before a contract is formed.

• Contract formation is crucial: A retailer is only obligated to honour a price once a contract is formed, such as when payment is accepted or an order is confirmed.

• Misleading practices are illegal: If a pricing error misleads or disadvantages consumers, it may breach consumer protection laws.

Conclusion

Pricing errors can be frustrating for consumers, but understanding the legal principles behind them is essential. In most cases, retailers are not required to honour incorrect prices, as displayed prices are invitations to treat rather than binding offers. However, if a contract has been formed or the error involves misleading practices, consumers may have grounds to take action.

While retailers are encouraged to resolve pricing disputes amicably, consumers should remain aware of their rights and protections under UK law. If you ever encounter a pricing issue, approach it with the knowledge that fairness and transparency are central to the UK’s consumer protection framework.