Amazon.com hit with pricing glitch

Computerworld - Shoppers took advantage of a pricing glitch at Amazon.com and ordered toys at far lower prices, but the online retailer later informed the customers that they could pay the correct prices or cancel their orders.

Monday, after becoming aware of the apparent glitch, which affected the price of some toys, the company sent e-mails to consumers alerting them to the problem, saying it would be handled according to its posted pricing policy. The policy states that if an item's correct price is higher than Amazon's stated price, the company will contact customers with the correct price and ask them whether they want to purchase the item at the higher price.

Amazon.com didn't return telephone calls for comment.

However, the exact nature of the problem is unclear.

In a July 31 e-mail to Tracy Ann Johnson in Delton, Mich., Amazon said, "We have new information about your toy order from this past weekend. . . .Due to an error on our Web site, the toys you ordered were incorrectly priced. You will be receiving a follow-up e-mail shortly with instructions on how to either complete your order with the corrected prices or cancel your order." In the e-mail, the company also gave Johnson a $5 Amazon.com gift certificate for her inconvenience.

But in its follow-up e-mail on Aug. 2 Amazon said, "We have new information about your order and need to hear from you before proceeding. We are sorry to report that we have contacted the respective suppliers, and the prices of the following items have increased . . ." One of the items was a refrigerator play set that Johnson ordered for $2.49, but Amazon.com said the correct price was $29.99.

Whatever the problem, Johnson said she isn't happy with Amazon's response and has filed a complaint with the Michigan Better Business Bureau. And now she's waiting to see what happens.

"I have not approved the price increase, nor have I canceled the order," she said.

This potential public relations problem came a week after the Seattle-based company reported a second-quarter loss of $89 million (see story) and its president and chief operating officer , Joseph Galli Jr., announced he was leaving after 13 months at the company to become CEO of VerticalNet Inc., a Web site that serves business-to-business markets (see story).

Harry Wolhandler, an analyst at ActivMedia Research LLC in Peterborough, N.H., said depending on the magnitude of the problem, it could be a better public relations move for Amazon to honor the lower prices.

However, he said,