Mistakes happen. It is simply a fact of life. What happens when that mistake is a retailer improperly labeling the price on a product? Is the retailer required to honor the incorrect price? The answer to this seemingly simple question depends on a few different factors.
In certain consumer-friendly jurisdictions, consumer protection laws might require retailers to honor the advertised or labeled price. These laws are designed to prevent false advertising and protect consumers from deceptive practices, even going as far as to make such acts a criminal offense. Virginia law does not have a specific requirement to honor mislabeled prices, however, it does stipulate that “[one] who in any manner advertises or offers for sale to the public any merchandise, goods, commodity, service or thing with intent not to sell, or with intent not to sell at the price or upon the terms advertised or offered, shall be guilty of a Class 1 misdemeanor[1].”
A mislabeled item cannot be used “bait and switch” tactic from an unscrupulous retailer. A retailer cannot advertise a too-good-to-be-true deal, and then suddenly require the customer to purchase it at another price at the register. The point-of-sale system itself is further required to display the price (See Va Code § 3.2-5627).
But what if the incorrect price is simply a mistake? The operative word in the Virginia statute is “intent,” but a mistake is the most common scenario. An employee puts the wrong sign out or adds the wrong price sticker to an item.
A retailer may not be required to honor their incorrect price. In the purchase and sale of goods, there is typically some understanding between customer and seller of what a reasonable price may be. If the price error is significant and clearly a mistake (e.g., a $500 TV labeled as $5). While it is illegal to advertise a $500 for $5 to get customers to visit the store, with no intention of selling them the TV for $5, an employee who makes a mistake with a pricing gun is not subject to the same level of culpability.
Most reasonable consumers would recognize this as an error. There is further no underlying “meeting of the minds” required to create a valid contract. Both retailer and consumer know that a $500 item would not cost $5 in any reasonable circumstance.
Many retailers will maintain store policies to honor the mislabeled price. This maintains goodwill with their customers, even if the price is incorrect. A one-time error, even if money is lost, ensures that the customer returns to them. It also helps protect their reputation. A negative review could ultimately be more harmful and costly to the company in the long run than simply honoring the mistaken price.
Other retailers might refuse to honor the mislabeled price and instead correct the error immediately. They might offer an explanation and possibly a small discount or another form of compensation to the affected customer. This typically occurs where the mistake would cause harm or loss to the business.
Ultimately, retailers should often review and improve their pricing procedures to prevent these types of errors. This might involve better training for staff, better labeling systems, or more rigorous control of internal processes. Regular review pricing procedures, along with employee training, is crucial in ensuring accuracy and the reputation of your business.
If you need assistance or have questions about your pricing policies or procedures, reach out to any of the capable attorneys of Way Law today!