Blog homePricing errors tend to fall into distinct categories:
- Product but no price
- Loading error (human)
- Code logic error (developer)
- User trying to fool the system
Product but no price
On many systems the product (such as a tour, hotel, flight etc) is loaded and configured into a system at a different time (and maybe by a different person) than the dates & prices. Some (and I am going to have to be fairly general here not to give away too much NDA’d detail!) systems will ensure that a zero priced product can’t be sold…..but this then causes problems for product that really is zero priced (extras that are not sold - or where the cost price is not passed on to customers).
On systems that don’t stop zero priced products from being sold the plan can sometimes be to add all product in at £99999….. then, before that product is put on sale, it is just a matter of searching for the £99999 products - and ensure that a correct price is loaded….. but this doesn’t always happen - and the assumption is that a customer really wouldn’t buy a holiday for that amount should they see one of these large numbers…. At the web end of the system, the developer can double check that they are not showing the “magic” 999999 number on the screen - and alert back to the product team….. All of this is quite nasty from an IT perspective and is best avoided if possible.
Loading error (human)
Moving information from a “product contracting” system into the reservation system can be, in many companies, a human process. Humans are never 100%. These errors are very difficult to pickup.
Code logic error (developer)
With many different types of product that can be put “in a basket” on a travel website it is difficult (but not impossible) to test all the likely combinations. Sometimes the “business logic” layer of the code can have a hiccup…. and create an incorrect end price…. (or it could be a succession of rounding errors for example). Really you shouldn’t get any of these type errors….
User trying to fool the system
There are now a number of extensions you can add to web browsers (such as Firebug for Firefox) which let users “adjust” values in web forms before the are submitted…. I have seen websites where you can tweak values and get different prices on subsequent online booking screens. Never trust your users or their input.
How can pricing errors be found and resolved?
Two distinct routes to resolve these problems:
- Sales tracking - including margin analysis
- Legal solutions
If you have a good “yield or revenue management” system it should tell you when either a product is selling too quickly (priced too low) or not at all (priced too high) vs where you need to be with the specific time prior to product “expiring”. This can sometimes pickup pricing issues.
Margin analysis - if you know that you are always looking for a 30% margin (sales price vs cost price) - then you can check this at point of booking - and ensure that the margins are all OK…. this can either be done by human intervention - or by your computer system.
Legal solutions (UK law)
(I am not a lawyer, this is not legal advice….!)
Out-law.com have a great article on legal solutions for pricing errors. They are lawyers so it is best to ask them…. however, here is a quick precis:
On the “order now” button within an online booking process, ensure that you are saying “you are making an offer to purchase goods, which, if accepted by us, will result in a binding contract”…. Then you don’t have to accept the offer if the price is wrong.
Make it clear that just because you have taken the customers money doesn’t mean you have accepted their offer. “Your card will be debited with the sum of £200 when you click the order button. This will be refunded if your offer is refused”.
Ensure that in your “confirmation email” that you use language like “your order has been received and is being processed” (which doesn’t suggest you have agreed to the customer’s offer) - rather than (in the case for physical ecommerce) - “your goods will be dispatched within 24 hours”.
Further reading
Read the story about how one customer got £8000 worth of hotel reservations from Opodo for £1.50 (3 USD). Apparently this is as as result of the hotel loading their own rates & availability…..
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