The Great Shoe Caper

On July 3, 2013, Jos. A. Bank, a men’s apparel store and online retailer, offered a sale on pairs of Allen Edmonds shoes. These shoes were priced at $39.98, when they regularly sell for around $335. Consequently, a great number of shoppers jumped at the discount and placed online orders. For some of these individuals, their orders were accepted, the shoes were shipped, and hence received by the customers per the terms of Jos. A. Bank’s advertisement.

However, for another group of unlucky shoppers, Jos. A. Bank failed to adhere to the listed price. Jos. A. Bank accepted their placed orders, charged their credit cards for the transaction, and even sent them an online receipt – only to renege on the terms of the deal. Jos. A. Bank sent an email to many of these customers alleging that the listed price was a pricing error on their website, and consequently failed to fulfill its obligations by properly completing the sale: “Due to a pricing error on our website, orders received on July 3, 2013, prior to 1:30pm Eastern Time, for the Allen Edmonds Nathan shoe will not be filled. We apologize for the error.”

Since the dot-com boom beginning in the 1990s, retail transactions and advertising on the Web have surged, as increasing numbers of shoppers purchase their products online. However, because of the high volume of retail transactions occurring online, issues such as what Jos. A. Bank customers experienced in July are becoming more and more common.

Contrary to common beliefs, a mere advertisement by a retailer is very often not an “offer” in terms of contract law. In fact, when a customer places an online order, his order itself is likely a mere “offer to purchase” the product. However, once the customer tenders payment and the retailer accepts this payment, a binding contract has likely been created. Per the terms of this contract, the retailer would then be contractually obligated to tender performance by shipping the product and hence completing the sale.

Sometimes though, the retailer never intended to honor the advertisement or sale, as the advertising campaign is intended to be a “bait and switch.” In a bait and switch, a retailer “baits” a customer by advertising a product or service which in truth it does not intend to sell, and then attempts to “switch” the consumer from buying the advertised product in an effort to sell them something else of a much higher value.

For example, by offering a product to its customers at a significantly reduced price, retailers are able to draw in a high volume of customers. Once they refuse to honor completed sales due to a “pricing error,” “insufficient quantities,” or some other excuse, the retailer will instead attempt to switch those customers into buying different products, such as via banner ads on the customers’ web browsers. State and Federal law prohibit most bait and switch advertising practices, as they are unethical marketing tactics designed to take advantage of consumers.

Even if an online retailer alleges that an advertisement was a “pricing mistake”, then they still may be liable for failing to maintain proper safeguards to discover inaccuracies in their pricing.

If you, or a loved one, have been impacted by improper or deceptive advertising techniques, call the attorneys with Arguello Law Firm, P.L.L.C. at 1-888 CLAIM-68 or email us at ArguelloHope&Associates@SimplyJustice.com. Victims may be entitled to compensation, and our experienced attorneys will be happy to speak with you and discuss your options.