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Macy’s Wrongly Priced Necklace: The Problem That Was Never Supposed To Be Possible In-Store

Written by Evan Schuman
April 3rd, 2013

A strange recent incident involving Macy’s (NYSE:M), an impressively—and unintentionally—marked down necklace and a POS system is noteworthy not merely because of what happened, but where it happened: namely, in-store.

The recent Macy’s (NYSE:M) print ad certainly spoke the truth. It described as a “super buy” a $1,500 diamond-silver-and-14-karat-gold necklace on sale for $47. It was indeed a super buy — and it was also a major mistake. But Macy’s didn’t catch its own mistake for some time, until well after quite a few customers made good on the purchases in-store.

The $1,500 necklace

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was indeed supposed to be marked down, but only to $479, not $47. Things like this happen online with annoying frequency. But in-store? This raises several questions: Macy’s described the error as “a mistake [that] was made in a recent Macy’s advertisement,” according to Holly Thomas, a Macy’s VP for national media relations. Was that mistake replicated in the pricing database, accessible through POS?

If the wrong price existed only in the print ad, what happened with the checks-and-balances that are supposed to exist in-store? When an associate did a scan and saw $479, didn’t a $47 ad activate any alarm bells? No one thought to check with a supervisor?

Apparently not, as quite a few purchases of the necklace happened in-store. Indeed, one such shopper bought out all of the remaining inventory—which is usually a good heads-up to double-checking pricing. That buy-out generated another problem. Seems the associate then offered the shopper behind him the ability to buy more of the necklace and have Macy’s ship it. He agreed. Before it was shipped, though, Macy’s figured out what was going on.

A different Macy’s spokesperson, Beth Charlton, E-mailed a statement: “For those customers who bought the necklace at the $47 price, they were fortunate. For the gentleman you spoke with, he was not so fortunate. We are sincerely sorry he was disappointed and unable to buy the necklace at the $47 price for his wife.”

So Macy’s policy when it makes a mistake is essentially “You pay your money and you take your chances”? No apology? No explanation of what happened? No attempt to make the shopper feel better, such as an apology gift certificate?

What we have here are two broken promises to customers: One promise in an ad and another by an associate. Yes, it was based on a mistake, but it was the chain’s mistake. If Macy’s thinks the mistake was costly based on how many customers got the promised necklace, wait until the retailer sees the results of those angered customers who didn’t.

The proper response would have been to say “This was our mistake. But we want our shoppers to

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trust that we back up with an associate tells them. Therefore, any customers who were promised this necklace at that price will get it delivered. It’s the right move.”

Given that it was a one-day sale and that a very small number of shoppers were made this promise, it seems an easy way for Macy’s to have scored nice-retailer points.


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4 Comments | Read Macy’s Wrongly Priced Necklace: The Problem That Was Never Supposed To Be Possible In-Store

  1. thomas young Says:

    I disagree with your assertion that Macy’s needed to honor the ad price, particularly if the pricing database was correct and all parties at the time of the sale were aware of the discrepancy. Integrity applies to all parties in a transaction. A consumer who knowingly accepts change in excess of the amount due is no different than one who takes advantage of an honest mistake made by an store employee regarding pricing of an item. Macy’ doesn’t need to worry about customers with that ethos. They do need to better train their employees, though they should have common sense before they even show up for work.

  2. Evan Schuman Says:

    Agreed that it applies to all, but there’s no indication in this situation that the shoppers knew anything was wrong. Macy’s had labeled it clearly as a huge discount–and it was–so there was no reason for them to suspect anything. Macy’s associates, on the other hand, have access to their sales and should have seen that the price in the POS didn’t match the ad. And if it did, how could it have? A typo in an ad that was replicated in the POS? Much of this doesn’t add up, but have yet to see anything that shoppers were acting dishonestly.

  3. StevenK Says:

    I agree with Evan’s conclusion that Macy’s should have handled this differently… on a number of levels. With all of the money Macy’s has invested in new IT over the past few years, this error is a perfect example of how even the best new systems are susceptible to human error. Here, there were at least 2, maybe even 3 or 4 separate systems that contained the error. (MMS, POS, E-Com, Marketing) Was it a process breakdown? Sloppy data entry? Collusion among employees? Nobody knows for sure. Regardless of how the error was caused, it is not the customer’s problem that the error happened. Any reasonable person, and in this case there were several, would not have thought anything amiss when the advertised one-day sale price matched the price scanned at the register. (Remember the problem grocery stores had with barcodes scanning at higher prices than labelled? Here, it seems the opposite problem occurred.) This should be a wake-up call for retailers to implement better controls in their IT systems and business processes. On a related topic, I wonder if the jewlery merchant at Macy’s will get dinged when the GM$ for the department come in far under plan or if that will get written off as a marketing expense!

  4. Cme Says:

    I work at Macy’s in fine jewelry. I wasn’t at work that day, but if I had worked, and if I had noticed the error, the process to report the error is so complex that it would have been challenging to report the error. Also, if I noticed the error and I was wrong, then I risk being viewed as a troublemaker. In other words, it’s not a store employee’s “place” to question a large corporate decision.

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