A consumer watchdog is calling for Harvey Norman to honour sales contracts for hundreds of customers who picked up dirt cheap furniture deals online due to a technical pricing glitch.
Harvey Norman customers couldn't believe their luck yesterday morning when they noticed pricey lounge suites, dining table and chairs and other items selling for less than $100 after an apparent technical glitch on the company's website.
The furniture and appliance giant's 'New Zealand's Biggest Retail Sale' began after the clock turned midnight yesterday.
Those that happened to be on the website couldn't believe their eyes when they noticed lounge suites going for under $100, seven-seater dining suites going for $159 and other too-good-to-be-true bargains.
Dannevirke's Alex Lewis jumped on Facebook and saw a post from a member of the Farming Mums NZ page spreading the link.
"This lady put [a post up] and said 'oh look what I've got for $103'. And so we were all like, 'yeah, let's all get in too' and we all did ... I have my receipt for my $103 lounge suite and I actually bought another couple of lounge suites too cos at that price, why wouldn't you ... so three lounge suites for under $500."
Auckland barrister Patrick McGrath said Harvey Norman "were on the back foot here" in terms of challenging the sales which were now official contracts as the sales had been completed.
"The starting point is that it's a binding contract because you've got money that's been exchanged and people have got their receipts and it's all done. So definitely Harvey Norman are on the back foot here if push comes to shove they have to prove to the court that they were mistaken and these people knew about the [online pricing] mistakes."
Mr McGrath said Harvey Norman would have to apply to the court to get out of the contracts if the customers insisted on keeping their products.
Maggie Edwards, consumer advisor for Consumer NZ, said the watchdog could have sympathised with Harvey Norman if the low prices had been changed after one or two hours.
"We're surprised it took such a large company, given all the advertising that they took, eight hours to fix the problem. So if somebody thought this was too good to be true and checked it out an hour later, two hours later, three hours later, they would have seen the prices still there. So eight hours is not reasonable nowadays, given the size of the company, to keep offering. One or two hours, honest mistake.
"They've had this huge advertising campaign...so you'd be expecting some good buys. So you wouldn't know that this was a mistake because they were having this really big sale."
A Commerce Commission spokesperson said traders needed to take care over advertised prices.
If consumers were misled by a price then it could be an issue under the Fair Trading Act. However, if a genuine mistake had been made in pricing (eg a $1400 flight was advertised for $14) then consumers were not necessarily being misled and they should discuss their purchase with the retailer in the first instance.
A Timaru man saw his partner spreading the link on Facebook, too, and after hearing that she made a successful purchase he jumped on and bought two lounge suites for $95 and $103.
"I thought it was unbelievable, unbelievable. I bought a couple of three piece lounge suites. I've been invoiced for them and the money has gone out of my bank."
The man said he hadn't had any contact from the company.
"If you look at the site it's still going a bit nutty now. There was a lounge suite for $183,000 but they've just dropped it down. I don't know if hackers have got in or it's a disgruntled employee or what's happened."
However, Ms Lewis says others who bought items have since been told by Harvey Norman that the prices were the result of a "technical glitch" and those who bought items wouldn't be getting them - unless they paid the proper price.
"They've said that they will get a full refund and that they may get a small discount on the [correct] purchase price on the item that they've purchased online. Looking at the price you're like, 'That's unbelievable', but I thought Harvey Norman could come to the party a bit better than that. So everyone's up in arms about it."
Ms Lewis said all the prices now appeared to be correct.
"That lounge suite that was $103 is now $4999. It's crazy."
However, just after midday yesterday, Harvey Norman online emailed all the purchasers saying "unfortunately this morning between 12.01am and 8.00am there was an error with the Furniture dept. pricing".
"We apologise for this genuine error and wish to advise that a customer service person will be in contact with you shortly to discuss your purchase."
One woman responded that she would have expected "that an email stating my payment had been accepted amounted to a contract for sale being formed".
"I will be very disappointed should this contract not be honoured."
Another woman agreed.
"Not happy here. Seems to be mistake after mistake ... but I have complete faith you will honour and do the right thing."
The Herald is still waiting for an official response from Harvey Norman.
After being told their bargain purchases were the result of a computer glitch, Harvey Norman customers balked after finding all their email addresses were made public.
Instead of ensuring the customers' addresses were blind copied, a staff member had apparently mistakenly sent them out in an open email so those who received it were able to see the email addresses of others who had taken up the dirt cheap deals.
"Not happy here," one woman wrote. "Seems to be mistake after mistake ... but I have complete faith you will honour and do the right thing."
Ms Lewis was unimpressed her email address was made public.
"I sure am annoyed. I don't want everybody knowing my personal details."
Another shopper, Fiona Wolff, said it was "incredibly unprofessional to send off a knee-jerk email like this, and even more so to allow all of us to see the other affected parties".
"Since then, I've had about 10-15 emails from other customers, there is a 'reply all' action happening, which is pretty amusing. Unwittingly, Harvey Norman has allowed all of their affected customers to communicate with each other, and this has meant they can't pick us all off one at a time. More power in numbers."
A Wanganui customer, who bought two lounge suites for $95 and $103, said he couldn't help but notice the privacy clause in the company's terms and conditions:
"Harvey Norman Stores (N.Z.) Pty Limited (referred to as "we", "our", or "us") is committed to protecting the privacy of any personal information provided to us."
He labelled the email blunder "utterly unprofessional".
A Privacy Commission spokesman said the depth of the breach sounded fairly limited - to email addresses - and the cause appeared due to human error.
"This sort of breach is relatively common and an easy mistake to make. We advise Harvey Norman to follow the breach guidelines on our website. We would take any complaints from customers seriously - the same way we do for all complaints."
Maggie Edwards, of Consumer NZ, believed Harvey Norman should front up to the Privacy Commissioner over the error.