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If a company prices a product erroneously, then (in the US) do they have to sell the product for that price, if someone buys it at that price?

Or are they allowed to correct the price and not sell for the erroneous price?

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  • In New York City, absolutely, yes (see www1.nyc.gov/assets/dca/downloads/pdf/consumers/…). In other jurisdictions, maybe not.
    – phoog
    May 23, 2017 at 18:00
  • @phoog That document is for informing consumers about their rights, it's not a quote of the law. There's a difference between trying to rip off consumers by putting up signs for $100 and then trying to charge $110, and having a $99.99 item with an incorrect sign for $9.99.
    – gnasher729
    Jan 4, 2018 at 20:55
  • @gnasher729 the law is in title 20 of the administrative code and title 6 of the city rules. See e.g. nyc.gov/assets/dca/downloads/pdf/about/PricingLaws.pdf or use your favorite search engine to look for 20-708 item pricing.
    – phoog
    Jun 28, 2023 at 18:49
  • @phoog Okay, but I didn't find more than § 20-708.1.e
    – mavavilj
    Jun 29, 2023 at 5:39
  • @mavavilj that's all there is; it's sufficient (unless you're also interested in the penalty provisions at 20-753).
    – phoog
    Jun 29, 2023 at 8:45

2 Answers 2

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It will vary by jurisdiction. This is a complicated area of law, but usually an advertisement or a display of goods in a shop is not an "offer" (in the contract law sense of the term), but an invitation to treat (or "invitation to bargain" in the US).

The "offer" is the shopper saying "I'd like one of those please" or putting the goods on the band for the till. The "acceptance" is the checkout girl saying "that'll be ..."

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A seller can correct their price, and they are not bound by an mistaken advertised priced. A sale is a contract, and there isn't a contract until the parties reach an agreement. A store being willing to sell (at some price) does not bind you to buy their item, and even if you intend to buy it, you have to overtly agree. In the usual store sale, they will post a notice by the item saying that they are sorry but the advertised price is wrong. At that point, since you know the price (or at the point of sale when you see the price), you can "cancel" the negotiations (sale), before a contract is formed (before you pay and they transfer ownership of the item).

Online sales generally are generally governed by a "terms of service" clause which allows them to cancel the sale in case of a pricing error. The reason why online sales are different is that the correct price is discovered after the sale, and you don't get notice saying "oops, that should be $50, not $5". If there is no TOS allowing them to cancel and refund, that would be a unilateral mistake, i.e. their fault, so they would be held to the price unless the discrepancy is "unconscionable" (basically, unreasonable to assume that the advertise price is correct).

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    @phoog that's now what it says: it says "It is illegal to charge more than that posted price." The store can refuse to sell at the posted price and still comply with this. They can then post the correct price.
    – Dale M
    May 23, 2017 at 21:01
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    @DaleM that's not how it works in practice. The DCA would not accept a defense of "we refused to sell it until we were able to post a higher price, so we're in compliance." That would render the rule useless. Also, your proposed "workaround" would not work for an item with a price label.
    – phoog
    May 24, 2017 at 0:52
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    @phoog So stores in NYC are never able to raise the price of their goods?
    – Dale M
    May 24, 2017 at 0:56
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    @DaleM sure they are. They just have to post the new price before they start charging it rather than after. If you show up at the register and they try to charge a higher price than that they had posted, however, they have to honor the lower, posted price.
    – phoog
    May 24, 2017 at 0:58
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    @RyanJensen see portal.311.nyc.gov/article/?kanumber=KA-02136. I couldn't readily find any statistics about complaints filed or fines collected, but they're surely available. Perhaps a freedom of information request is necessary. See also duckduckgo.com/?q=20-708+item+pricing there's no need for a lawsuit; the city can impose an administrative fine of up to $250 for a first offence and $500 for subsequent offences.
    – phoog
    Jun 28, 2023 at 18:44

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