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Price goofs in e-commerce

Price goofs are a fact of e-commerce. Deal with it.

It was a deal too good to be true - literally. When Kmart's BlueLight.com listed the Nomad Jukebox MP3 player on its site one day in April, a keying mistake set the price at a mere $26.89 instead of $299. Thanks to special bulletin boards for bargain hunters, news of the discount spread across the Web, and soon BlueLight was flooded with thousands of orders. Many people ordered more than one.

BlueLight corrected the glitch quickly enough, but the damage was already done. The retailer now had the unenviable task of telling buyers that it could not honor the accidental discount of nearly 90 percent. Naturally, that didn't go over well with BlueLight's customers, who took to online message boards to lambaste the site. It was, in short, a public relations fiasco.

Pricing goofs like this happen every day on the Web. Usually they're minor errors that go unnoticed, but occasionally it's a big merchant and a big item - like a laptop or a plane ticket. Earlier this year, for instance, lucky shoppers booked $27 flights from the United States to Paris on United Airlines' Web site and free nightly stays at the Hilton's Mexico City Airport Hotel.

Such pricing glitches are nothing new. Amazon.com has grappled with the issue for several years. But as e-commerce expands, so do the goofs. Thanks to the speed of online communications and of Web sites like FatWallet.com, which alerts shoppers to online deals - few goofs go unnoticed.

The simple fact is that no matter how fancy the software, pricing glitches happen. Blame computer bugs, faulty coupons and simple typing errors.

Though most online retailers view glitches as an unavoidable hazard of the job, they typically don't honor the resulting lower prices. Some will put forward some kind of a consolation prize, like offering the mistakenly listed product for its wholesale price, or giving customers a coupon, as BlueLight did in the case of the MP3 player.

''There's no such thing as perfection in life,'' says Outpost CEO Darryl Peck. ''We carry a couple hundred thousand SKUs. Every now and then someone's gonna hit the wrong key on the keyboard.''

Peck says human error is the sole cause of the few pricing glitches suffered by his company's site. An employee need only mistype a decimal point when entering a price, he explains, and a camera could list for 99 cents instead of $99. Such glitches, Peck maintains, are statistically insignificant; he estimates Outpost's losses at a few thousand dollars over six years.

To minimize the damage of data-entry mistakes, arts-and-crafts retailer Eziba.com set up a system of checks and balances. When a new product gets posted to Eziba's site, its price is re-checked by everyone who ''touches'' the listing, from the inventory planner to the copywriter. This system, says Eziba CEO Bill Miller, has limited pricing glitches to a handful of cases.

Hitting the wrong number on a keyboard, however, is just one way to create chaos. Complex software systems can cause much more insidious mistakes. As sites become more elaborate, with dozens of Web servers connecting to application servers, which in turn connect to back-end databases and mainframes, the potential for trouble increases exponentially. A single point of failure anywhere along the chain can result in a pricing goof. And software-based glitches are much harder to detect than those caused by human error.

''If someone missed a decimal point, it could get discovered,'' says Randi Barshack, VP of marketing and business development for TeaLeaf Technology, whose products help find and fix pricing problems. ''You look it up in the database table and you fix it. But if a price is a dynamic calculation, you can't go anywhere to find it. It doesn't exist anywhere.''


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