NSW jeweller says it will be forced to close its doors after incorrectly listing a $34,000 ring for $1000

engagement ring

A New South Wales jeweller may be forced to close its doors after a customer took the business to court over an online pricing error and won.

In October last year, Royal Diamonds jeweller mistakenly listed a 2.16-carat diamond engagement ring on its online store for $1123, where the actual price of the ring was approximately $34,000.

Customer Nicholas Buttle purchased the ring for his fiancée at the advertised price, but was informed by the jeweller the selected ring was “no longer available”.

The judgment from the NSW Civil and Administrative Tribunal reveals at the time of purchase, the company’s website notified Buttle “in the event that a diamond is unavailable, a diamond of similar or higher grade may be offered, or a refund of the purchase price”.

When the customer reminded the store he would like a replacement diamond “as per the note on your website”, the jeweller denied the request, citing a typing error, according to evidence tended to the court.

“The price for the specific diamond was not correct, due to a typing error. Usually we would offer a diamond of a similar or higher grade, however in this instance, unfortunately, it won’t apply,” read the email from Royal Diamonds.

Buttle then took the jeweller to the NSW Civil and Administrative Tribunal, which ruled in favour of him as the customer. Royal Jewellers appealed the case on the grounds the customer was acting unconscionably, but the appeal was dismissed.

The jeweller has been ordered to provide the customer with a similar or higher-grade diamond ring with the value of $34,279. The store must also pay Buttle’s legal fees.

A director at Royal Diamonds, who did not want to be named, told the Daily Telegraph the “company is going to be closing down because of this”.

“We are going to make the ring and close the company,” they said.

The director was also worried the case would “set the precedent” for opportunistic customers to buy expensive items at incorrect prices.

The Tribunal said there were “several issues” related to provisions of Australian Consumer Law (ACL) that were not raised by either party, which instead relied on the law of contract. The Tribunal found an “absolute contract of sale” was made.

“Having considered various authorities, the Tribunal found that there was an absolute contract of sale made between the parties; that payment for the ring had been accepted as was confirmed by the appellant and that the appellant was unable to avoid the agreement by virtue of its claimed mistake,” the judgment reads.

Partner at TressCox Lawyers Alistair Little told SmartCompany despite the case potentially contravening areas of the ACL, the legal issues fell under “basic contract law”.

The areas of the ACL relevant to the case could include engaging in misleading and deceptive conduct, and provisions that deal with multiple pricing, Little says.

“The multiple pricing provisions say that if a product has more than one price advertised, you must offer it to customers at the lowest price advertised,” he says.

“If you catch the error you can withdraw the price, but if a customer has already bought the product, they’ve entered into a contract and that’s the end of the deal.”

While Little believes this case was straightforward and Royal Diamonds had “no real prospect” of winning the case, he says these type of disputes are usually sorted out before they get to court. In this case, it is likely it proceeded to court due to the large price discrepancy.

“Usually these disputes are sorted out without going to court – consumers will complain to a consumer body like the ACCC, who will remind the retailer of its obligations,” he says.

For businesses wanting to make sure they don’t get caught out on pricing errors, Little prescribes a strong dose of diligence.

“The key is to make absolutely sure that you have someone check over your pricing carefully, even have someone who’s job it is to make sure prices are accurate,” he says.

“Don’t leave it up to the advertising agency or the person printing your catalogue.”

SmartCompany contacted Royal Diamonds and Nicholas Buttle but did not receive a response prior to publication.

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President Nixon
President Nixon
4 years ago

“in the event that a diamond is unavailable, a diamond of similar or higher grade may be offered, or a refund of the purchase price” – the important word here is ‘may’ which means by definition “expressing possibilty”. Therefore, the jeweller is not obliged to offer a diamond of similar or higher grade. The Tribunal is wrong and the law, as they say, is bunkum.

Vaughn Dumas
4 years ago

To the customer: is it really worth your while to get the ring knowing that you’ll cause some folks to lose their jobs? Is it? There was a error, but you have now won at the cost of other people. Are you really proud of yourself? Would you teach your children that winning when other people lose their livelihood is OK?

KC
KC
4 years ago
Reply to  Vaughn Dumas

Totally agree! What a pity for any small business who can’t afford the resources to deal with opportunistic customers ready to pounce. The costs for all stakeholders far outweigh the gain for one. Entitlements vs Ethics….ethics lost again 🙁

Michael Ratner
Michael Ratner
4 years ago

Disgusting result. Once more business owners are disadvantaged by a judicial system that appears to reduce everyone to the lowest common denominator.
I presume here is a retailer with no prior convictions or complaints who somehow made a genuine mistake and some predator consciously took advantage of it.
Based on this judgement a whole new world has opened to hackers. Go in and change the price of an item, get one of your associates to lay claim and then follow it through based on this precedent.
To the winner, unless there is something we are not being told, hope you don’t believe in KARMA.

Alex Levashov
4 years ago
Reply to  Michael Ratner

Very valid point and a reminder for retailers to keep their online store secure

helma Parkin
helma Parkin
4 years ago

I feel for those who will be out of a job and I hope the customer doesn’t teach his children to do the same thing and I don’t know how she could wear it know that people are without a job… seems this is common and who cares about jobs that is until they loose theirs.

D
D
4 years ago

Hope this guy chokes on that engagement ring.

Jerome Fandor
Jerome Fandor
4 years ago

Who cares about small business? No one.
Shafted at every corner!
When those in small business decide enough is enough who will replace them?
And then every one will whinge there is not enough competition-petrol anyone?

Annette Scott
Annette Scott
4 years ago

Common sense should have told the buyer that it was obviously a mistake – a diamond of that size would cost a lot more than $1000. The customer should be careful – karma can be a little nasty sometimes. That diamond won’t bring him any happiness.

Matt
Matt
4 years ago

This marriage will fail miserably with that tainted ring. What a bastard. If I was the recipient of that ring knowing how he came about it I would seriously question the character of them.