Another hit in the war of the algorithms, and a very costly one for retailers.
Suppliers may argue that it was an obvious mistake and they could therefore refuse to deliver the orders; purchasers can argue that orders already dispatched cannot be cancelled and they are entitled to keep the goods. It appears that the sellers are faced with a stark choice: they can either honour the orders and go bankrupt, or they can not honour them, to the serious detriment of their rating in the marketplace and/or face repercussions from Amazon, and then go bankrupt.
It will certainly be difficult to claim in respect of orders that have already been fulfilled. However, retailers should keep a very careful record of all their losses in terms of products supplied and fees paid to Amazon. In addition to the loss in respect of the orders that have already been fulfilled, there is the reputational damage to retailers.
This calls for retailers to put in place some form of seller insurance and other protective measures to safeguard them against further glitches.
There were Christmas shopping bargains galore on Amazon’s website over the weekend … for about an hour. Because of a technical glitch, the prices of thousands of items crashed to 1p – giving eagle-eyed customers a pre-Christmas treat while leaving scores of small family-owned businesses nursing heavy losses, with some warning they could enter the new year facing closure. From 7-8pm on Friday, software used by third-party sellers to ensure their products are the cheapest on the market went haywire and reduced prices to as little as 1p.