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Amazon Sellers Forced to Honor Penny Sales after Repricing Glitch

Shoppers on Amazon UK snapped up expensive items from merchants for just a penny on Friday, but the pricing wasn’t part of a sale. Rather, it was due to a glitch in a third-party repricing tool. Some gleeful customers will receive their one-penny bargains, while others will be disappointed to learn their orders have been cancelled. For merchants whose items were shipped before the error was discovered, it feels like the nightmare before Christmas

Sellers using RepricerExpress went into panic mode when they found Amazon customers purchasing their items for a penny on Friday evening. One merchant said he lost 100,000 pounds worth of inventory within 2 hours. “We cannot afford to lose 100k pounds at this time of year and will be bankrupt in January as a result.”

The CEO of RepricerExpress Ltd. Brendan Doherty responded to merchants who had posted on the company’s online forum, apologizing for the disruption and explaining that the service began experiencing a problem on Friday at about 19:00GMT. The company worked to fix the original issue by 20:00GMT, he said. “We continued to work over the following few hours in conjunction with Amazon to revert any incorrect prices to their original prices. We have received communication that Amazon will not penalise sellers for this error.”

Merchants Using FBA Could Take the Biggest Hit
Shmuli Goldberg, Director of Marketing for Feedvisor, whose customers were not impacted, explained that Amazon’s response in these situations is almost always the same. “Any order not yet fulfilled, Amazon will allow the seller to cancel, and in the vast majority of cases will ensure the seller’s feedback is not penalized for the cancellation.”

However, he explained, “Any orders that have already been shipped, which would include the majority of FBA orders placed at this time of year, will be honored, and the seller would be expected to cover the cost of Amazon’s shipping fee, as well as incur the loss of the item sold.”

Merchants Cancelling Orders Not Immune from Problems
Amazon sent the following letter to customers whose orders were cancelled:

We’re writing to let you know that your order (redacted) from (redacted) has been cancelled because the price of the item(s) wasn’t set correctly by the Seller. In most cases, you pay for items when they’re dispatched to you, so you won’t be charged for items that are cancelled.

If you have any questions about the cancellation of this order, please contact your seller (LINK)

Sellers on Amazon strive to minimize cancelled orders. We’re sorry for the inconvenience this has caused.

For your reference, we’ve included the details of your cancelled order below.

But some customers were dissatisfied with that response, and some sellers who cancelled the 1-penny orders have already received negative feedback as a result.

Envy Boutique Outlet received 4.5 stars over the past 12 months, but on Friday, it racked up three 1-star reviews. One customer wrote, “Cancelled order with no explanation.” A second wrote, “Rip off don’t buy from them has they quote one price then cancel your order hopping that you will pay the new price I am now reporting them to fare trading standards as the price you show is the price you pay and shame on amazon for letting it happen.” And a third wrote, “My order was cancelled due to the wrong price being set. If that had happened in a shop they would have normally sold it to me for the price they displayed out of courtesy. Not Happy!”

Feedvisor’s Goldberg said that sellers who cancel orders as a result of the glitch could take solace in knowing that their feedback score would not drop too dramatically. However, “the seller will still have to go through each and every negative feedback for weeks to come and ensure he lets Amazon know which came about because of this glitch.”

One seller pointed out that bad feedback had already caused some sellers to lose the highly sought after Buy Box. “Even if only there for a short time, until it is removed the effect again is difficult to quantify in losses,” the seller wrote.

Amazon Aware of Repricing Risks
It’s not the first time that a glitch at a repricing service caused Amazon listings to show as a penny. Another incident in 2012 reportedly impacted 100 merchants.

Ironically, Amazon UK had notified merchants last week that it was putting into place a new policy effective January 14, 2015, in order to reduce price error risks to sellers and to avoid potentially negative customer experiences:

As of that date, merchants will be unable to use Seller Central preferences to select a blanket “opt-out” from all potential low and high-pricing error rules. “Instead, you will need to set a minimum and maximum allowed selling price for each product in your inventory,” Amazon informed them.

Sellers who don’t set pricing limits for each product will be subject to Amazon’s default potential pricing error rules that states that for any listing without a minimum and maximum allowed price set by the merchant, Amazon will deactivate the listing when a potential pricing error is detected based on default rules.

Merchants Can Mitigate Risk
Goldberg said problems such as this can occur when rule-based systems do not have “sanity checks” in place before they send prices to Amazon. “Bugs do happen.” He offered advice to merchants using repricing software to prevent such problems in the future:

“The first and most important thing is choosing a repricer that has failsafes, and double or triple checks in place, to make sure no prices are sent to Amazon that are outside the price brackets pre-defined by the seller. In addition, fulfilling orders themselves instead of selling through FBA will give sellers a window of time in which to check sales prices before shipping items out.”

“That aside, and short of turning off repricing and going back to setting prices manually, it unfortunately comes down to trust.”

What Next? 
The Daily Mail covered the issue extensively, presenting perspective from Amazon merchants.

The newspaper quoted an Amazon UK spokesperson who said the company had cancelled the vast majority of orders impacted by the glitch.

RepricerExpress’s Doherty issued a statement in response to our inquiry about the problem on Sunday.

We experienced a problem with RepricerExpress on Friday evening which caused incorrect pricing to be sent to Amazon. We managed to get the problem resolved so that any new prices going to Amazon were correct within about an hour of the problem being reported. It took a further few hours to get incorrect prices reverted to their original prices where possible.

Amazon have assured us that seller accounts will not be penalised for this issue. Amazon has also issued a statement which states that the vast majority of orders placed were cancelled.

I understand that this issue comes at the most important time of the year for our customers and I am deeply sorry by the disruption that has been caused. We have communicated with Amazon to help minimise orders with incorrect prices being shipped and we encourage sellers to contact Amazon for up to date info on this.

Again I would like to take this opportunity to apologise to our customers for this issue. We will continue to investigate the cause and to put measures in place to prevent it from happening again. One of the things all sellers can do to prevent this issue from happening again is to ensure that they do not de-activate the pricing alerts facility provided by Amazon which caters for potential repricing errors.

We take a lot of pride in the levels of service we provide so everyone here is disappointed that our customers have experienced this issue. We will continue to work to provide the highest levels of service we can in order to regain the trust and confidence of our customers.

Amazon UK has not responded to our inquiry sent on Sunday.

Update 12/15/14: We asked Doherty, “What about the orders that did ship before they were cancelled, will the seller bear 100% of the loss in those cases?” He responded, “We are working through answers to a lot of questions right now. We don’t have immediate answers to every question and speculating an answer could be harmful for our customers. If customers contact us directly, we’ll do everything we can to help. “

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.