Last week, SIA made a financially substantial error, offering business class tickets at economy class prices. We take a look at this and other interesting cases of misprice in Singapore and around the world.
SIA: Premium Service at Plebeian Prices
For those who have been living under a rock in the past week, Singapore Airlines had mistakenly sold 900 business class “flight segments” at economy class prices via travel agents in Australia. The tickets sold were for destinations in Europe and Asia, and the lucky travellers who snagged the tickets could potentially save up to AU$2,500 (S$2,700). SIA initially told the affected travel agents and passengers that they would not be honouring the pricing mistake. The ticket buyers had one of three options: get a refund, pay the price difference or fly economy class.
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Cue backlash and furore, as many on the Internet took up virtual arms, hammering away on the keyboard to give their own opinion on the matter.
The airline giant changed its tune a few days later, honouring the mispriced business class tickets.
Losses: Up to S$2.5 million, although we suspect it should be lower as one flight segment doesn’t necessarily comprise the entire journey
Gains: Great PR and a story to tell the grandkids
Zappos.com: A Million Dollar Mistake
Zappos is a popular online shopping portal in the States. Besides its eponymous website, Zappos also runs 6pm.com, a haven for people who love buying branded products at heavily discounted prices. On 21 May 2010, someone made a huge mistake while manipulating the company’s pricing engine, inadvertently causing everything on 6pm.com to have a maximum price of US$49.95. Luxury bags and clothes that would normally cost a few thousands of dollars were going at bargain basement prices.
When the Zappos team finally detected the error and temporarily shut down the site to rectify the mistake, the online retailer had racked up losses totalling US$1.6 million. Zappos opted to honour every single mispriced order. No one was fired.
Losses: US$1.6 million
Gains: Tremendous amounts of PR and lots of unintentional marketing value, cementing the company’s already amazing customer service reputation
Hewlett Packard: The One That Went to Court
On 8 January 2003, Samuel Teo was working on a training template for Digiland International when he accidentally altered the price of a Hewlett Packard LaserJet printer on the company’s online store from S$3,854 to a mere S$66. Five days later, the mistake was discovered and rectified. Unfortunately, in those 120 hours, 794 people had placed an order for 4,086 printers. Hewlett Packard and Digiland stood to lose more than S$6 million if they honoured the pricing mistake.
Naturally, they didn’t.
Six friends who had bought hundreds of printers together decided to drag the company to court, attempting to make it honour the misprice. After months of deliberation, the courts threw out the case and the subsequent appeal. The presiding judge ruled that the six friends knowingly knew the price was wrong and had set out to make profits by purchasing such a large amount of printers, far too many for one person to use.
Losses: Resources and time spent battling the court case
Gains: An employee who will never commit such a grave mistake again
MBS Hotel: Glitch or Promotion?
A couple of years ago in August, my friend threw a small party for her close colleagues and friends. She held it in one of the bigger rooms – the Orchid suite – at the Marina Bay Sands hotel. It was a magnificent place. The bathroom had beautiful marble flooring and a large bathtub that was the scene for many selfies. There was a separate bedroom and living room, and the view from the windows were glorious. I could see the twinkling of the city lights and the shimmer of the stars and the moon on the surface of the Singapore River.
“How much did this room cost?” I asked my friend casually.
There was a twinkle in her eye and a mischievous grin formed on her lips. “$20 a night.”
My mouth, which was drinking from a champagne flute, literally opened in shock. A few drops of golden liquid made their way to the carpet.
“How is that possible?”
She started an amazing story that involved finding out about the too-good-to-be-true room rate from her friend in the middle of the night. She fired up her laptop and navigated to the booking website. Her friend wasn’t lying. It was really $20 a night. Certain conditions had to be met and a combination of boxes had to be ticked for the rate to appear, and she was certain it was a glitch, a misprice. But, there was no harm trying and so, she booked a stay for two weeks. $160.07 in total, inclusive of tax.
She pressed the checkout button. A few minutes later, her email inbox beeped – confirmation. She closed her laptop.
The next day, my friend tried to recreate the conditions that made the S$20 rate possible but no matter how she tried, it wasn’t possible. The glitch, apparently, had been fixed. For the next few months, she waited for an email from the hotel’s management to regretfully inform her that they had to retract her booking.
The message never came.
Later on, the hotel management told her it was a promotion. She’s doubtful but she’s not complaining.
Losses: A few thousand dollars at the most
Gains: No news coverage at all, positive or negative, regarding this, only good memories of great times created by those who were lucky enough to be awake at the wee hours of the morning