Blessed by the Potato

Ellen Roseman had an article recently about a fellow with a visual impairment that ordered some speakers from their online store on sale, only to find out that the sale price was an “error”. Even though the speakers hadn’t shipped yet, they wouldn’t cancel the order, and told him that he had to return them in store in person, or ship them back at his expense. Then, when he called to complain about how difficult that would be for him, they told him to respond in writing.

Using her gift, Ellen helped get this particular issue resolved, and Future Shop has “noted a change to procedure for the call centre that would have escalated Mr. Klupsas’ case to a senior member of our escalations team, in order to determine a solution for the return based on accommodating his disability.”

This is entirely unsatisfactory in my eyes. How did it ever become policy that as a result of their pricing error, the customer has to ship the item back at their expense? Making an exception for people with disabilities in the call centre response tree is not getting to the root of the problem.

John Hempton said it best: “In many cases, the processes are as important as the outcome. Indeed, they are more important.” These processes need to be set up to encourage their employees and their organization to behave in ways that produce desirable outcomes. This sort of policy encourages pricing errors as a sales technique: slash prices, get people to buy the item, ship the item, then say “Whoops, that was a mistake” and force people to either return the item at their expense, or pay the full price. How many people do you need to trick into paying full price this way to make up for the shipping costs (and complaints line staff time) for the orders that do get shipped back?

Indeed, price errors appear endemic at Future Shop. From what I’ve observed I’d say that about 99.99% of their price changes execute properly — which sounds decent until you realize that that still leaves them with several major screwups per year. At what point does it go from a series of unfortunate errors to a strategy? Loblaws does even more prices changes per week than FS, yet has fewer pricing errors — and when they do screw up, they follow the scanning code of practice, so you still get your deal (or if the price error works against you, up to $10 off your misscanned item). In fact, Future Shop is a member of the voluntary organization that implemented the scanning code of practice, but doesn’t seem to feel the need to uphold their principle to “Visibly demonstrate retailer commitment to price accuracy” when it comes to their online store.

How automated is their online store, anyway? Is there a person who checks each order, akin to a cashier, before the confirmation email goes out? If not, why not? It’s not like the online prices are that much better than in-store, so the overhead should be there to hire that sort of person; it shouldn’t be very expensive, and it may pay them back in catching SNAFUs like this before they get out of hand. I mean, their entire online system isn’t automatic — there are all the phone reps, and someone has to be packaging and shipping in the warehouse, it can’t all be robotic yet (and if it is, I want to see it).

So, what policies can we set up that will demonstrate FS has a commitment to customer service, and not in being that sleazy guy who tries to change the price after the checkout is done, yet at the same time protects them from potentially having to sell two hundred Xboxes at a loss? What rules will align everyone’s interest? After all, the focus is on these sorts of structural problems after the financial meltdown.

Well, first off, you want to remove any way for them to profit from purposefully making price errors. So, remove the need for the customer to return the item at their expense. Since shipping is not instantaneous, refusing to sign should be enough (and again, I don’t know why Mr. Klupsas’ case was allowed to get as far as it did, regardless of his disability). And since shipping is not instantaneous, and your order confirmation is not (or shouldn’t be) instantaneous, there should only be so much opportunity for FS (or any online retailer) to renege on the deal. Someone over there should check the order before the confirmation is issued, and at that point, they’re locked in (if not, is it really a confirmation?). If a mistake is noticed, then the policy should be similar to the SCoP for bricks-and-mortar stores, but modified to fit FS’s big-ticket merchandise: you get the item at the mistaken price (assuming the price is lower than it should have been) or at cost, whichever is higher. Determining cost will have to be on the honour system, but the idea is to find that balance where FS doesn’t go bankrupt because they have fat fingers on the price change keypad, yet where they also don’t make money from screwing customers with bait-and-switch price errors.