Three hundred and twenty seven New Zealand shoppers who paid ridiculously cheap prices for furniture on the Harvey Norman website during a Sale event last week have been offered a refund , an apology and a $100 voucher. However, a Wellington lawyer has since weighed in on the debate and advised customers caught up in the technical meltdown glitch to fight for their goods.
Hundreds of Harvey Norman customers were irate after being told that furniture they bought online in its “biggest ever retail sale” on Thursday morning had been priced incorrectly.
Wellington lawyer Don McIlroy was not impressed the hundreds of customers had been offered a voucher and urged customers not to settle for it.
“The best advice I can give [customers] is to stick with the price and demand [Harvey Norman] produce the goods for the price advertised,” McIlroy told NZ media.
If Harvey Norman did not honour the furniture sales, it ran the risk of breaching the Fair Trading Act, he said. He believes customers had been given incorrect advice.
Under section 13 (g) of the Fair Trading Act 1986, Harvey Norman were making a false or misleading representation with respect to the price of any goods or services, McIlroy said.
“If the retailer makes a mistake they have to stick with it.”
To amend the price was misleading and a false representation of price, he said.
Harvey Norman had taken a contractual approach, informing customers it had made a mistake they believed customers had taken advantage of, he said.
“But that is incorrect … The fact they say it was an ‘error’, is irrelevant,” he said.
Customers need to prove naievity
McIlroy said that The Fair Trade Act trumped contract law, however two other Wellington lawyers have said the customers would have to try to prove they believed the advertised price was genuine.
Michael Wigley, principal of Wigley Law, said where there was a genuine mistake by Harvey Norman and the buyer figured the price was too good to be true, it was unlikely they could legally force sale at the low price.
Alan Knowsley, a managing partner with Rainey Collins Lawyers in Wellington, said it appeared a contract had been formed and the onus is on the shop to seek relief from the contract.
The shop could seek relief under the Contractual Mistakes Act if the price was a mistake and it can show the buyer knew of the mistake. A buyer could seek to enforce the contract if the shop refuses to complete the transaction and the shop would then seek relief, he said.
Meanwhile the offer of a voucher hasn’t placate all Harvey’s affected customers.
One of them, Chenelle Fraser-Wood, said, “Lots of people want to take it further and have already laid complaints with the Commerce Commission.”
Harvey included on Trader Compliance Programme
Harvey Norman is now one of eight traders being monitored by regulators concerned by a high level of complaints.
The Commerce Commission has included Harvey Norman in its Trader Compliance Programme, under which it monitors eight companies that together generated a quarter of consumer complaints to the commission last year.
The programme is in place to try to reduce complaints.
A commission spokesman said it had started receiving more complaints about Harvey Norman since Thursday’s sale error.
Complaints about major retailers such as Harvey Norman mostly related to pricing, warranties or credit terms, he said.
Consumer NZ chief executive Sue Chetwin told the media that the lobby group, which had still heard nothing from Harvey Norman, kept track of the commission’s list and took it seriously. Traders in the compliance programme were monitored and educated on consumer and fair trade laws, she said.
The nature of complaints extended to warranties and failing to meet the terms of consumer guarantees.
The sale error was compounded after the retailer sent out a group email to those affected, revealing their email addresses to one another.
After realising the sale mistake, Harvey Norman sent a generic ‘error’ email to all of the customers who purchased items in the sale, leaving some even more upset that their personal details had been shared.
The retailer has since emailed an apology for the privacy breach that happened after a “manual processing error” and urged those concerned to contact the privacy officer at Harvey Norman.
“No other information about you has been disclosed to other customers, this is limited only to your email address. We have taken immediate internal measures to rectify this issue. We ask that you delete our original email that has been sent in error in order to assist to maintain the privacy of all customers who have been affected by this error,” an email sent by the company to customers said.
An NZ Harvey Norman communication spokesman agreed the retailer was working with consumers but said it would not be making any comment.