Michael Eriksson's Blog

A Swede in Germany

Posts Tagged ‘stores

The perversity of offers in B2C commerce

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Portions of my recent (and past) problems with eCommerce (cf. e.g. [1], [2], [3]) were worsened by a fundamental flaw in the typical* legal view of how a (B2C) purchase takes place: What should be viewed as an offer to sell a product is just an “invitation to treat”, leading up to the prospective**buyer making an offer to the seller, which the latter can then accept or reject at will.

*I have not researched the global situation, but this is the case in both Germany and the U.S. (and likely most or all other “common law” countries, because they naturally tend towards the same legal principles).

**A word that I will leave out in the remainder of the text, for brevity, irrespective of whether a purchase actually takes place.

The absurdity of this is proved by how the price and other conditions are usually unilaterally determined by the seller: Go to a grocery store, grab something priced at 9.99, go up to the cashier—and offer to buy it for 7.50. Not only will the offer be rejected out of hand almost everywhere*, but chances are that the cashier will even lack the comprehension that this type of offer should be possible. Indeed, she would likely neither be legally authorized by the store to negotiate the price, nor technically able to accept a different price**—even should it be a higher one. Effectively, “we invite you to extend an offer towards us with these exact conditions—and if you do not like said conditions, don’t waste our time”.. To consider that an invitation, not an offer, is absurd.

*One potential exception is a mom-and-pop store when the owner actually happens to be at the cash register.

**At least without causing a discrepancy between the electronic transaction logs and the contents of the cash drawer, which the cashier might be forced to cover with own funds.

Looking at e.g. eCommerce, this legal approach causes problems like a seller being able to refuse purchases even on the flimsiest grounds, no matter what efforts the buyer has gone through, and even after the buyer’s “offer” might appear to have been accepted. For instance, in my interactions with Cyberport (cf. parts of [2]), the web interface appeared to accept my “offer”, a confirmation email was sent, and my offer then rejected* some 15 (!) hours later. More generally, such transactions (at least in Germany) tend to have an attached disclaimer that “a legal contract only results with our confirmation” (or similar). Cyberport takes it to an extreme “Im Übrigen** kommt ein Vertrag mit Zusendung der Versandbestätigungs-E-Mail zustande.” (“In other cases**, a contract results with the confirmation-of-shipping email.”), which effectively implies that Cyberport can reject any “offer” until the product is actually sent on its way.***

*Cyberport still wanted my business, but refused the “offered” payment per invoice. Legally, this amounts to a rejection.

**A previous sentence specifies other rules for the special cases of prepayment and cash-on-delivery.

***Even afterwards, actually, through simply suppressing said email, but this would almost always be to Cyberport’s own disadvantage.

In other areas, problems like undue discrimination can arise, say with a (physical) store refusing customers due to a too dark skin tone, a Jewish nose, or a pro-Trump hat.

The advantages of altering this legal view include greater safety and fewer complications for the buyers, e.g. in that situations like mine will occur far more rarely, that selling items online without being certain that they can be procured will backfire,* and that bait-and-switch schemes will be harder. To boot, the situation will be more logical—cf. above or note how even the typical language of the sellers tend to place the offer on their side.**

*This practice is apparently somewhat common: A store offers a product at a certain price and a buyer places an order (makes an “offer”). If the store manages to procure the product at a price that allows it a profit, it eventually accepts; if it cannot, it rejects. This is particularly problematic when there is a non-trivial delay in time, because the buyer will have to wait that much longer before he goes to the competition. Indeed, chances are that he would never have gone through the effort to place an order, had he known in advance that delivery was not next to guaranteed. (Of course, the point of the scheme is to keep customers from going to the competition, even when it would be in their best interest.) I once read an article (likely in C’t) about a computer dealer who systematically tried to delay delivery so long, weeks or months, that it could profit from changes in the price level for its products. (Along the lines of promising a brand new Apple product for five percent below the typical retail price—but not actually delivering until the retail price had dropped by six percent. This leaves a percentage point extra profit and a number of customers who would have gone elsewhere without the misleading price claim.)

**As in “today’s offers”, “we offer”, etc. Vice versa, the word “offer” is typically not used for what the customer does—instead words like “order” and “application” dominate.

Now, making the actual offer (by the seller) an offer in the legal sense, raises a few complications, but none that cannot be handled. For instance, if the price of a product is considerably lower than normal by accident, a reservation for “obvious errors” would give the seller protection—that a car normally in the 20,000-Euro price range does not sell for 20.00 Euro or 2,000 Euro is almost a given.* Running out of product is not much of an issue in a physical store, because the offer through a sign/label/whatnot is obviously directed at the products in front of the buyer—you can buy one of these cartons of milk for 50 cent. If no cartons are present, then no offer takes place. Online, the stores would be forced to keep their listings up-to-date to reduce the risk, but that is relatively easy and increases customer friendliness.** Should later problems ensue, e.g. that the store does not receive expected deliveries, it is only fair that the store keeps the customers unharmed and settles its own problems without disadvantaging them.*** Issues like credit worthiness are largely beside the point, because if a seller has a reasonable fear that the buyer will not fulfill his part of the bargain, he cannot be obliged to stand by his offer.**** If worst comes to worst, there is always the option to make an offer conditional—with a condition that must then be explicitly stated in advance and is, correspondingly, fairer towards the buyers than the current arbitrariness.

*But with lesser errors, the store might well have to sell at the stated price—and that would be good in my eyes. (Exactly where to draw the lines is beyond the current scope, and might well depend on both product and audience.) Indeed, this is often what would happen today anyway: If the bar code is associated with the wrong price, the cashier is unlikely to even notice—and, cf. above, might not be able to do anything about it, even if she did.

**Or to implement better order management, or similar, with an improvement for both the buyers and the store.

***Note e.g. that what product sources the store uses, and what risks are associated, is a decision made by the store—not the customers of the store. Correspondingly, the store should carry the consequences of these decisions.

****However, the seller might see restrictions in the great arbitrariness that currently applies, where “unreasonable fear” is quite common. That too would be good.

Excursion on different types of deals:
Regular store sales, e.g., are by their nature offers—not invitations. However, this does not apply to all other conceivable deals. For instance, the sale of a single house or a single painting is by its nature an invitation to negotiate—all involved parties expect a negotiation and understand that only one buyer will actually get the house/painting. For instance, auctions are by their nature invitations to bid.

Excursion on advertising:
In contrast to the above, advertising might be an area where “invitation to treat” is a reasonable concept, e.g. because it is impossible to change the contents of a prospect after its been sent in the mail, even should the circumstance change or an error be detected. Explicit reservations for errors or the supply running out might be helpful substitutes (and I have seen them relatively often even as is), but might come with the danger of raising red flags to the customer, who could suspect e.g. a bait-and-switch scheme or a “lure” product that is offered at a fantastic price (but in extremely low numbers) solely to get people into the store.

Excursion on the historical situation:
In earlier days, the situation might not have been as absurd as it is today, giving some explanation to how the legal view arose. (But the more likely explanation is the convenience of the sellers.) For instance, price haggling was far more common and often outright expected in the past, amounting to a series of offers and counter-offers.* For instance, mail-order catalogs are much harder to update than websites, and there was a lot of room for misprints with older technology. (Then again, mail-order catalogs might be better viewed as advertising or otherwise be exempt, with an eye on inflation, price fluctuations, VAT changes, and similar, which can make it impossible to guarantee the same price over many months.)

*Incidentally, yet another argument why the seller’s offer should be the offer from a legal point of view: When haggling is reduced to a single statement of the seller’s price wish, this amounts to only the seller’s final offer remaining, making it absurd to interpret it as a “invitation to treat”. Negotiations did not usually go like “A: If you were to offer me ten shillings, I would sell. B: No, I couldn’t do that—but if you were to offer to sell for seven shillings, I would be on board.” (where the formulations are intended to be interpreted literally, not as round-about formulations of offers).

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Written by michaeleriksson

March 30, 2019 at 9:11 am

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A few thoughts on grocery shopping and holiday crowds

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Earlier today, I went grocery shopping. Between the restrictive German opening regulations (yesterday/Sunday closed; tomorrow/holiday closed) and the event character that New Year’s has for many, it was very, very crowded. This was made the worse by people having failed to make (or adhere to) some basic observations/guide-lines that any adult shopper should be long aware of:

  1. Never leave a shopping cart standing by its own: Unattended shopping carts are a great cause of “traffic” and access problems, and it is much better to move with the shopping cart.

    Notably, a typical aisle is roughly half-blocked (some entirely) by a shopping cart, which implies (a) that other shoppers can only pass in one direction at a time, (b) that people have to forego the contents behind the cart entirely, (c) people either have to forego the contents on the other side of the aisle too or they will cause the entire aisle to be blocked.* A moving cart, in contrast, will soon be gone (making the issue temporary in any given place) and it poses no obstacle to “two-way” traffic.

    *Some relief can be found through moving the cart forwards or backwards; however, in crowded situations, there is not always much room to do so. Personally, I am also loathe to move other peoples cart by more than a nudge or two, unless they are severely misparked—it has always struck me as rude.

    In a twist, unattended shopping carts can sometimes cause a chain-reaction, because an unattended cart has made it impossible for another shopper to reach a certain spot without leaving his cart behind.

    For those who insist on leaving their carts around, at least make sure that the cart is parked as close to one side of the aisle and as parallel to it as possible, and that it does not protrude into e.g. a “cross-aisles”.

    (Foregoing a shopping cart entirely is an option, but it is not always practically possible, and the additional gain compared to not parking the cart seems small.)

  2. Similarly, try to keep moving as much as possible and try to not be unduly slow: Slow movers slow others down and increase the risk of blockages. Standing around to look in detail at various products, especially in groups and/or with carts, causes similar problems as above. By all means, shop consciously and make comparisons, but adjust your behavior to the degree of crowdedness and the importance of the decision—which of several low-end sekt bottles to buy is not worth five minutes of discussion between three people.*

    *While I did not time them, I did see a group of three people having exactly this discussion for what must have been a somewhat longish time: I co-incidentally passed them by on two occasions with several minutes in between. (And, yes, we are talking the likes of “Rotkäppchen”—not expensive Champagne brands.)

  3. Do not bring family/group members that are not needed (at least on crowded days): Not only is every extra person an additional burden on space, but people who move in groups tend both to form obstacles in a different manner than the same number of people moving individually, and to move a lot slower on average (cf. above; note that the slowest individual sets the tempo for the entire group).

    As a special case: Do not bring small children (in general) and small children in a prams (in particular), unless there is no other option.*

    *On non-crowded days, this would apply for another reason—the undue amount of noise that they so often make. If you do bring small children, make sure to silence crying and whatnot as swiftly as possibly. To just let children cry out loud without reacting, as some parents do in at least Germany, is inconsiderate towards the rest of the world and poor parenting towards the children.

  4. While the above items deal with how to reduce the impact of a crowd,* there is also the matter of reducing the crowd, it self. For instance, those who shop faster will make the crowd smaller once they are gone; those who can manage to go on an earlier day** will distribute the crowd more evenly; etc. Such planning has the additional advantage of directly benefiting the planner, himself. (While the earlier items help others; with the hope that others will also adhere to them, and thereby give a benefit in return.)

    *Whether a shopper or a shopping cart is currently moving or standing still does not (or only marginally) affect the amount of space taken. However, those that move still cause a smaller disturbance (as surprising as it might seem).

    **Admittedly not always easy: Forego shopping today, and there is a three-day stretch without shopping, with the first prior opportunity being a Saturday (which tends to be fairly crowded even on ordinary days, and was likely much worse than usual due to New Year’s). Forego the Saturday too, and it is a four-day stretch. Over this year’s Christmas, with both the 25th and the 26th being German holidays, the corresponding stretch was four resp. five days (foregoing the 24th, resp. the 24th and the 22nd/Saturday). While these time periods are by no means unsurmountable, they are suboptimal for those with no freezer and a small fridge, on the long side for many “fresh” items, and increase the risk of something unexpectedly running out—let alone the risk that some event-specific item has been forgotten.

    Here we can also see a vicious circle: The increase of the crowd increases the amount of time the individual shoppers need, which increases the crowd, which …

  5. Try to show some degree of awareness of other shoppers and how you might currently impede them: Even on non-crowded days, one or two people who ignore the rest of the world can be a severe hindrance. Cf. an older text on women and awareness of surroundings.

As a similar advice to store-managers/-staff: Try to limit activities like stocking shelves to the absolute minimum in crowded situations. If a shelve is about to run out of whatever it contains,* do re-stock—but save the “routine” stocking until the crowd has abated (or do it before the crowd comes). Also try to do this ad-hoc re-stocking with as few and as small carts as possible (cf. the shopping-cart discussion above).

*Not only will greater crowds increase the risk in general, but “special-day” crowds will be disproportionately likely to go for the same items. Some standard items, e.g. milk, could conceivably need multiple re-stockings even on a regular day. Correspondingly, not re-stocking at all is a bad idea.

Written by michaeleriksson

December 31, 2018 at 5:54 pm