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Marketing stunts and out-of-the-box promotions are a daily occurrence, but in Chai's opinion, nothing is more outrageous than disguising a scam as a bargain and using misleading pricing to lure in traffic for free.

However, there's some good news lately. A consumer successfully purchased ten iPhones worth 100,000 yuan for just 9990 yuan, but the merchant refused to ship, citing incorrect pricing. Ultimately, the court ruled that the merchant must fulfill the order. Here's what happened: Last year, Mr. Cheng saw that a top-spec iPhone 15 was listed for just 999 yuan on an e-commerce platform, with a note saying "pre-sale, shipping before 8 PM on October 6th." He placed an order for ten phones and paid 9990 yuan in total.

However, Mr. Cheng didn't receive his shipment. The merchant informed him that the pre-sale order required a price difference to be paid, and if not paid, the shipment would not be made. They offered to refund his money plus an additional 100 yuan as compensation.

Mr. Cheng insisted that the merchant fulfill the order at the agreed price, but the merchant refused, citing incorrect pricing. So, Mr. Cheng sued the merchant!

The court ruled that by posting detailed product information on their online store, the merchant had made a binding offer under the Civil Code. Mr. Cheng's successful order for ten phones constituted acceptance of this offer, and the sales contract became effective upon order confirmation.

The court also noted that the right to rescind a contract due to misunderstanding expires 90 days after the party becomes aware or should have been aware of the grounds for rescission. The court ordered the merchant to deliver ten phones to Mr. Cheng. The merchant appealed, but the appellate court upheld the original decision. This case sets a positive precedent amid frequent incorrect pricing scandals in the e-commerce industry, protecting consumers' rights and deterring such malpractices.

Let's use this opportunity to discuss the sudden rise of incorrect pricing scandals in the e-commerce industry.

E-commerce has been thriving in China for over three decades, and China leads the global e-commerce landscape in various aspects. For instance, next-day delivery has become standard, and even same-day or half-hour delivery is no longer uncommon thanks to instant retail.

The powerful algorithms used by e-commerce platforms are also noteworthy. They showcase products tailored to your interests and purchasing power, seamlessly connecting your cross-platform search history and even social media conversations to relevant shopping options. For instance, after discussing phone cases with a friend, Chai found phone case ads everywhere on shopping apps.

Even more astonishing, your cross-platform search behavior and online conversations can be used by these algorithms to suggest relevant products. Features like shake-to-skip ads, live streaming sales, automatic inventory replenishment, and dynamic pricing put Chinese e-commerce platforms ahead of the game globally.

Yet, despite China's dominance in e-commerce, incorrect pricing scandals seem to pop up every few days, making headlines. From multi-billion-dollar brands to small merchants, these scandals involve everything from forced refunds to tearful apologies. In the past six months alone, there have been dozens of such cases.

For example, a well-known mooncake brand mistakenly priced 39-yuan mooncakes at 1 yuan, resulting in nearly 6 million orders.

Amidst the headlines, the brand issued tearful apologies and claimed significant losses, but customer service was unresponsive.

Similarly, a kitchen appliance dealer also made headlines with tearful apologies.

One after another, these scandals have captured public attention, with merchants crying poor and leveraging the situation for publicity. In one month, another home appliance brand faced a similar scandal, with staff holding apology letters and pleading for forgiveness. The hashtag "70 million yuan stolen overnight" even went viral, painting consumers as "wool gatherers." Unsurprisingly, the store reaped a windfall of traffic and became a trending search term on e-commerce platforms.

In another case, a major shoe and apparel brand refused to fulfill orders due to incorrect pricing, despite previously promoting discounts and sales.

Such scandals have become common, with well-known brands like coffee shops and new beverage companies frequently making headlines. Social media is flooded with merchants' tearful apologies.

However, upon closer inspection, Chai hasn't seen any actual shipments. Instead, merchants profit from the free publicity and hold onto customers' payments, earning interest for weeks. In the home appliance dealer's case, media estimates suggest merchants held onto roughly 40 million yuan in payments, earning substantial interest while delaying refunds for over ten days.

The ultimate solution? A 10-yuan cash red packet and a 100-yuan coupon, effectively forcing customers to make another purchase to redeem the coupon. With 40,000 orders, the merchant invested just 400,000 yuan but gained far more in marketing value.

The average customer acquisition cost in e-commerce is 200-300 yuan, with Alibaba reportedly spending over 1,300 yuan per customer in 2022. The four major e-commerce platforms average over 800 yuan per customer.

So, why do merchants resort to incorrect pricing? It's a cost-effective marketing tactic. Launching a new product? An incorrect pricing scandal instantly grabs headlines. During Singles' Day a few years ago, a beverage brand mistakenly priced a 260-yuan product at around 10 yuan. Despite restocking during the pricing error, no shipments were made. The brand pleaded poverty and requested refunds, but everyone knew no actual losses occurred. At worst, merchants lose a deposit.

Curiously, many media outlets side with merchants, labeling consumers as "wool gatherers" or criminals.

Upon reflection, who are the real victims here? First, with over 5.71 million e-commerce businesses in China, how do "wool gatherers" identify pricing errors within 20 minutes? Second, whether genuine consumers or "wool gatherers," payment signifies a binding contract. Merchants must fulfill orders without theft, robbery, or hacking involved.

If it doesn't ship, the merchant is the one who breaches the contract. Of course, more importantly, the so-called price missetting by the merchant is caused by the merchant's own mistakes. Why should consumers foot the bill? In similar incidents, what is black and what is white is clear! But why, in the eyes of the media and merchants, do consumers become the most heinous wool party.

For example, some consumers said, "I set the wrong price, and buying something is a crime? Is it here to make fun of? Everything is the consumer's fault."

Isn't this a situation where consumers not only become victims but are also insulted and shamed by the perpetrators?

"The merchant's own mistake, but the derogatory term 'wool party' is put on the buyer's head. Isn't the buyer paying according to normal procedures? Or did the buyer use the platform's program bug to exploit loopholes? Even if the store loses heavily, it is still paying for its own mistakes. Why insult the buyer?"

More importantly, in cases of mispricing, merchants ultimately become beneficiaries, not shipping and still earning traffic.

Obviously, why has mispricing suddenly increased in recent years like an epidemic? From the perspective of gains and losses, merchants are obviously attracted to it because they can achieve millions or even tens of millions of marketing effects with little or no cost. In other words, there may be genuine cases of mispricing, but in large areas, merchants disguise their scythes as wool marketing tactics.

Just like the case of a certain old-fashioned mooncake brand mentioned earlier, some consumers said it was not the first time they had set the wrong price.

These merchants are the real wool parties. It is worth noting that this routine is continuously iterating and upgrading. For example, in addition to mispricing products, misissuing coupons has also emerged frantically in recent years.

Do you remember last year when a food delivery platform issued a large number of large coupons to attract new users, but when users tried to use them, they found that the coupons had been withdrawn?

The withdrawal method is also absurd. After users redeem the coupon, there is either no place to use it, or the coupon is unilaterally canceled. Even after placing an order with the coupon, the platform forcibly cancels the order and refunds unilaterally. Secondly, a certain book e-commerce platform has also been exposed to similar incidents.

According to user reports, the 130-130 coupon redeemed on a certain web applet can be used for any book within the coupon's valid range, as stated on the coupon page. After painstaking selection, the order was finally placed, and the page showed that the order was being picked. The next day, when I clicked into my order page again, it was automatically canceled without any notice or compensation.

At that time, many users said that this was not the first time this platform had done so and that it was a common trick. "It is understood that this is a common practice of a certain website and has not been the first time that it has automatically canceled consumer orders in this way," said one user. Another user said that their order using the coupon was unilaterally intercepted during shipping, all without their knowledge!

Similarly, during the ongoing Singles' Day shopping festival, a well-known e-commerce platform has been exposed for issuing coupons, receiving orders, and forcibly closing them, leading to complaints from hundreds of people.

Obviously, the reason they are so brazen about mispricing and misissuing coupons is that such antics are a great way to profit. If they continue to behave in this way, the e-commerce industry will only deteriorate further!

Chai Goufski ©

Author | Chai Wuhao

Editor | Tan Song