Tesco Shows The Way To Handle An IT Price Glitch
Written by Evan SchumanTesco—the world’s third-largest retail chain—is so beloved in the U.K. for a reason. How many chains would issue a statement, explaining an IT-caused price glitch, and do so with a sense of humor?
The incident prompting the statement was Tesco’s offering the new iPad (a version with 4G and 64 gigabytes) for £50 (which is about $80 in U.S. dollars). That is a tiny fraction of what the price was supposed to be, especially when considering that U.K. prices for U.S. consumer electronics are typically much higher.
Tesco spokesperson Hannah Carolin issued a statement with a twist on typical marketing language. “We always look to offer our customers unbeatable value but, unfortunately, this was due to an IT error,” she said, adding that the error has since been corrected.
Her next line was to apologize for the situation, but not before questioning the wisdom of those customers who tried to make good on the deal.
“Most of our customers realized that this was an obvious mistake, but we apologize for any inconvenience caused.” It’s the word “obvious” that makes the statement so wonderful.
The Telegraph newspaper reported that the March 13 incident caused such a sharp spike in Tesco site traffic—fueled in part by Twitter—that Tesco.com crashed. The glitch also wasn’t caught instantly, as confirmation E-mails were received by some customers. Following the pattern of most other E-tailers caught in such a bind, Tesco canceled those orders and issued refunds. The only major exception that we know of came from Zappos back in 2010, when it made good on a large number of extreme discounts by way of its own IT glitch.
As for Tesco, we’re still waiting to hear how the IT glitch happened. Just because an error goes through IT systems—as just about everything does—doesn’t mean it is IT’s fault, such as if a supplier coded in a wrong number.
A true typical IT error, such as an incorrect calculation, would have likely resulted in tons of prices that are incorrect in roughly the same way. A single error on a single Apple product doesn’t sound like a likely IT error, but we’re awaiting more details from Tesco.
Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code.
-Marc
