Category: Consumer

Valentine’s Mistakes

Complicated blue valentine; heart via pixabay; complicated via facebookLast month, the Daily Mail website ran a story under the headline: Fury as Tesco offers large bottles of Budweiser for just 14p each on its website – only to cancel orders because the price was a mistake. The offer appeared as a Valentine’s Day special, for beer lovers everywhere. In another example, last Autumn, shoppers on Sears.com noticed that expensive toys (such as kids’ accessories and play sets that cost hundreds of dollars) were available for only $11.95. Nancy Kim on ContractsProf Blog explains many of the contract law consequences of this mistake.

This kind of mistake happens a lot. Sometimes, it’s human error; sometimes, it’s a misfiring algorithm – thus proving the old adage: to err is human, but to really foul things up requires a computer (though, some of these errors could be maliciously caused by hacking). And these errors seem particularly headline-grabbing when they involve really cheap tvs or flights. I’ve looked at the legal issues in these situations several times on this blog: see here, here, here, here, here, here and here. (more…)

If an offer looks too good to be true, it probably is

VikingDirectThe image on the left is based on screen grabs taken by @jimboireland and @WayneDoyle___ (click through for a bigger size). It shows a ‘samsung 51″ series 4 3D plasma tv’ for sale on a retail website for “€6.49 plus VAT” (I’ve zoomed in on the price, just to make the point). This offer looked like it was too good to be true; and that’s exactly what it was – too good to be true. The €6.49 was a typo for €649. I have blogged about similar mistakes on the part of United Airlines, Aer Lingus, Dell, Best Buy, Arnotts, and Round Hall. This time, it was VikingDirect.ie – and, as the Irish Times and The Daily Edge are reporting, they have apologised to their customers, but are not going to honour the sale of the televisions at 1% of its retail price.

The customers will probably argue that they had contracts with the retailer, which the retailer must honour by selling the tvs at the knock-down prices. However, these contracts are subject to the website terms and conditions, section 5 of which details how the relevant contract is made: the customer’s order is an offer to purchase the goods on Viking’s conditions; and the offer is accepted, and the contract is made, when Viking send the customer an e-mail acknowledging the order. This means that the advertisement on the website is not part of the contract at all (in the jargon, it is simply an “invitation to treat”, an invitation by Viking to customers to make offers to purchase). Furthermore, section 15 of those terms and conditions provides for a “right to cancel or vary” on the part of Viking, as follows:

If … our web site and/or ordering web pages contained any error, including in relation to the description or price of any of the goods … we shall be entitled to cancel the contract as a whole or in respect of those goods, in which case we will offer you a full refund, …

As the Viking statement on the issue (and I’m relying here on the media reports, as I can’t find the statement on the VIking website) referred to this clause, and continued

We are in the process of contacting those customers who placed an order for the wrongly priced television to advise them of the misprice and their impending refund. We would like to apologise to our customers for any inconvenience this has caused.

Aggrieved customers might argue that section 15 is an unfair term, for the purposes of the European Communities (Unfair Terms in Consumer Contracts) Regulations, 1995 (SI No 27 of 1995), but I don’t think that’s a particularly strong point. In the end, therefore, the fact that Viking Direct can avoid having to sell samsung 51″ series 4 3D plasma tvs for the advertised price of €6.49 plus VAT is a pretty straightforward piece of contract law; and the moral is twofold:

  • terms and conditions will apply (so vendors should ensure that the terms and conditions of their websites cover such eventualities; and consumers should be aware of such terms and conditions); and
  • if the offer is too good to be true, it probably is.

Nevertheless, if I were one of the customers, I think I’d rather have the television than the apology.

B&Q Ireland will honour vouchers during Examinership – updated

B&Q logo, via B&Q websiteThe High Court has today approved a petition for the appointment of an interim Examiner to B&Q Ireland, a home improvement and garden centre retailer. A statement on the B&Q website explains:

During the examinership processs, it is anticipated that B&Q Ireland Ltd will continue to trade at all nine stores; all employees will be paid, and all pre-paid goods and services, including kitchens, bathrooms and bedrooms and their installation, together with Gift Vouchers and Credit Notes will be honoured. Suppliers will be paid for goods and services supplied during the process. …

What about my credit note or gift voucher?
We are still honouring credit notes and gift vouchers throughout this process. We don’t want our customers to lose out.

Update (12 Feb 2013): the High Court has today confirmed the appointment; and it was confirmed to the court that all vouchers, credit notes and deposits will be honoured by the company throughout the examinership period.

This is a far more satisfactory approach than that taken in the context of HMV (see here, here and here). And the fact that B&Q can take this approach demonstrates that the Examinership process (or Administration, its UK equivalent) does not automatically preclude the company under the protection of the court from honouring vouchers. I hope we have heard that last of that particular canard, but I am not too sanguine that we have.

Bonus (including updates and amendments through 12 Feb): The UK arm of HMV continues to demonstrate how not to handle an Administration; the Guardian and the Independent reported that HMV workers (or at least one of them) took over the official Twitter feed to vent their fury over sackings – there’s an excellent assessment on Forbes. Meantime, the Administrators have made all of the members of the Board, including the CEO, redundant; and they are seeking to do deals with suppliers and landlords, close unviable stores (update (21 Feb 2013): in two waves), and sell off non-core businesses such as nightclubs and other venues.

Update (12 Feb 2013): Meanwhile, the receiver of the Irish arm of HMV has been unable to find buyers for the 16 Irish stores. All of the stores were loss-making, due to online competition (cd and dvd retailers, as well as streaming and download services) and high levels of rent. The shops will not be reopening; the employees, who had been laid off temporarily, will be made redundant; and the chain will be liquidated. This is a sad day for the employees, and a sorry end to a great business.

HMV will Honour My Vouchers after all, at least in the UK

HMV voucher, via the drumAccording to TheJournal.ie, HMV stores in the UK are to start accepting vouchers again. Meanwhile, a sit-in by staff at some of HMV’s Irish stores came to an end over the weekend, as the Receiver confirmed that they would receive pay due to them; and, in a separate development, the Receiver also confirmed that the proceeds of a charity single would be paid. However, for so long as the Irish operation remains in an increasingly complex receivership and the shops are closed, there is no practical means by which to redeem vouchers, gift cards, and the like. But the UK operation is merely in Administration (equivalent to Examinership), and Sky News is reporting that the Administrators have bowed to public pressure, and have announced that gift cards and vouchers can be redeemed in stores from today (Tuesday). Update: calls from the Taoiseach on HMV to give their Irish customers the same rights as those in Britain to redeem vouchers seem to have fallen on deaf ears (in much the same way as calls to him to change the law in this regard have equally fallen on deaf ears, though some legislative changes might be afoot in the UK).

These are the very same Administrators who tried to say last week that the process of Administration prevented them from honouring the vouchers and gift cards. If the law prevented it last week, then it prevents it today. If, on the other hand, the law allows them to honour vouchers today, then it allowed them to do so last week as well. As I argued here and here, it was clear to me that the law did not prevent them from honouring the vouchers last week, and that claiming otherwise was nothing more than disingenuous spin on the part of the Administrators (seeking to save a few bob: it was reported last week that the outstanding vouchers could have been worth £100m, but it is being reported today they are worth in the less eye-popping range of £6m to £7m). In fact, they must have known that they could honour vouchers in an Administration, as the same firm conducted the Administration of electrical retail chain Comet, in which they initially suspended vouchers and then subsequently honoured them (though the Administration was not successful and the shops were eventually closed).

At least this week’s story is more plausible; according to the BBC, the Administrators have said that they can honour the vouchers after assessing HMV’s financial position. Last week, for the Administrators, the sale came first, and the truth came second; this week, it’s all about the money, money, money. The Guardian reported that consumers greeted the news warmly on Twitter, though there was speculation as to whether many shoppers would already have thrown their vouchers away.

The moral of the story is very simple: if you are in Ireland, hold on to your vouchers, and wait and see; if you are in the UK, and if you have HMV vouchers and gift cards that you haven’t thrown away, don’t walk to the shops; run!

Update: The US restructuring specialist Hilco, which had bought out HMV’s Canadian operation in 2011, has purchased HMV’s debt from the group’s lenders, thereby taking effective control of HMV’s UK operations and giving the Administrators more time to attract further backers. The receivers of HMV’s Irish operation declined to comment on whether this would have any impact on the receivership.

Finally, Jim Carroll has an excellent overview What’s next in the HMV narrative? on the On the Record blog on the Irish Times site; he concludes:

There’s still some way to run in this story. HMV may well return in some shape to a street near you, but it will be a far different beast to the one who stood there for decades.

No doubt, but let’s hope that it will honour vouchers, gift-cards, and the like.

The HMV vouchers saga just makes me wanna shout, and throw my hands up, in frustration

HMV noticeThere have been many developments today in the HMV vouchers saga about which I blogged yesterday. I argued that HMV’s vouchers, tokens, gift cards, and the like, were valid, and that National Consumer Agency (the NCA) should have been vocal and active in support of consumers in possession of vouchers which HMV had been refusing to honour. Having monitored the situation yesterday, the NCA sprang into action this morning. They questioned the basis upon which gift vouchers, tokens, gift cards, and the like, were not honoured in HMV’s Irish shops yesterday; and they met with representatives of HMV. However, it was too late, and it was all for naught. HMV’s Irish shops did not open their doors this morning (the notice, right, was on the front door of HMV’s Grafton Street shop this morning). This meant – among other things – that it was not practically possible to redeem vouchers, whatever the legal position as to their validity. Then, it emerged during the day that the Irish operation was going into receivership (and not Examinership, the Irish equivalent of the Administration regime to which the UK operation is subject). This definitively means that vouchers are now effectively worthless, just like the claims of other contractual creditors (including the claim to the proceeds of a charity single). Worse, the Consumers’ Association of Ireland called yesterday for legislation to protect consumers with gift vouchers which had been issued by now-insolvent retailers, but the Government has today ruled that out.

Many of HMV’s UK shops have been displaying notices saying that they were unable to issue refunds or exhanges, or sell or redeem gift cards, or take trade-ins of dvds, games, etc (though in practice, they seem to be honouring their statutory obligations to refund or replace in the case of faulty goods). Passions have been running understandably high over the decision taken on Tuesday by the Administrators of the UK operation not to honour vouchers (which had been for sale up until the previous day). A UK politician and consumer advocate have likened the refusal to honour vouchers to theft. Police were called to a HMV store in Oxford after a “minor dispute” broke out when two customers were told they could not use their gift cards. A grandfather walked out of the HMV shop in Henry Street in Dublin with three computer games after staff refuse to accept a gift voucher presented by his grandson to purchase the games. Good for him, but I wouldn’t recommend this. I can understand that irate customers wanna scream and shout and let it all out, but I think it unfair to make the staff on the ground (whose jobs are in jeopardy) to bear the brunt of consumers’ ire over decisions taken by Administrators. You shouldn’t have to shout, shout, let it all out – which is why prompt action by the NCA (and the OFT in the UK) is much the preferable route to resolve such issues.

(more…)

I can’t believe the news today: if Administration fails, then HMV might go away

HMV, Grafton St, Dublin, Sat night, by Cian Ginty, via FlickrThe photo on the left, by Cian Ginty on Flickr, shows the HMV store on Grafton Street, Dublin, closed up on a Saturday night. I read the news today, oh boy, about how 300 Irish jobs are at risk as HMV enters Administration in the UK. None of the Irish media coverage that I have seen or heard contains anything on the formal fate of the Irish operation. It could be put into Examinership (which is the equivalent of the UK’s Administration regime); or, since it is a relatively small part of the total operation, and it is tightly bound to the UK business, the Irish operation might be left to trade normally while the UK administrators get on with things. In both the UK Administration regime and the Irish Examinership regime, the business seeks the protection of the court in a bid to put in place a scheme to allow the business to continue trading. If the bid is not successful, then HMV will cease trading, and the shutters will come down more permanently not only on the Grafton Street store but on all 236 of its stores after 92 years of trading.

It is being reported that

HMV’s administration means it can legally declare gift vouchers worthless, a blow for those who received one as a Christmas gift.

At least as a matter of Irish law, I don’t think that the matter is quite so clear cut. The National Consumer Agency has a very useful page on the general consumer law issues surrounding vouchers, tokens, and gift cards, and provides good advice to consumers thinking of purchasing them, as does Tina Leonard on her site (for the UK, have a look at this BBC article). But the uncertainty now is not so much about the validity of vouchers, tokens, and gift cards in general, but rather as to whether, if they are valid, HMV can nevertheless repudiate them because it is in Administration in the UK or in Examinership in Ireland.
(more…)

#CRC12 Paper: Chapter 7 – Users

#CRC12logosmallChapter 7 of the Copyright Review Committee‘s Consultation Paper considers whether the Copyright and Related Rights Act, 2000 (also here) creates barriers to innovation by users (update: you can download a pdf of the Paper here (via DJEI) or here (from this site)). This is the longest chapter in the Paper, and it raises a great many issues.

Innovation is traditionally presented as a linear top-down process where innovation is the sole preserve of the producer, but it is increasingly an iterative and interactive one in which users play increasingly important roles. This is particularly so online, where technology is making it increasingly easier for users to innovate, and for that innovation to be based upon the transformation of existing content.

Chapter 4 had earlier considered the centrality of rights-holders in copyright law, but the law recognises other interests as well, and seeks to balance the interests of rights-holders in protecting their monopoly against other legitimate interests in diversity. In particular, by protecting only “original” works, by preventing only “substantial” infringements, and by providing a range of exceptions, copyright law accommodates interests other than those of rights-holders, such as those of users. One of the main questions for the Review is whether the copyright balance between rights-holders and users now requires further amendment, in particular to incentivise innovation.
(more…)

For consumers, three is a magic number

Consumer Protection Cartoon

Like the old joke about buses, you wait for ages, then three come along at once. So it is with consumer protection initiatives. There have been three in the past week. First, the EU Commission last week proposed a new Directive on Consumer Rights, which would merge various existing Directives and update and modernise EU consumer protection rules (hot on the heels of a slightly broader proposed Common European Sales Law). Second, the Minister for Jobs, Enterprise and Innovation yesterday announced the enactment of a comprehensive Consumer Rights Act, implementing the Report (pdf) of the Sales Law Review Group. As with the new Directive, the new Act will also merge various existing Irish pieces of legislation, and then update and strengthen Irish consumer protection law. Third, the Central Bank of Ireland today published a revised Consumer Protection Code (pdf), to ensure that consumers are adequately protected in their dealings with financial institutions. This is all very welcome, and I look forward to when these three initiatives come into force.