Online pricing error Australia: must the store honour the price?

You spot a $1,200 television listed online for $120, place the order and pay. A day later the store emails to say it was a pricing error and it's cancelling your order. You may be wondering whether it can do that, or whether it has to honour the price. The answer depends less on the Australian Consumer Law (ACL) than you might expect, and more on your contract with the store.

Quick answer

What the contract says matters most. The first question is whether a binding contract was formed at the listed price, and when. That depends on the store's terms and conditions at the time you ordered, and on general contract law rather than the ACL. Many online terms say an order is only an offer and that the store accepts it later, for example when it dispatches the goods. Under general contract law, a price displayed on a website may be treated as an invitation to make an offer rather than a binding offer, depending on how the site works and what its terms say.

No ACL section says a store must honour every price it displays. The ACL can still matter in four ways:

• A genuine, obvious error, with your order not yet accepted under the terms. The store is likely to be able to cancel. In that case, the most practical outcome you can expect is a prompt refund of anything you paid. If it keeps your money without supplying, see section 36 below.
• Your order was accepted or confirmed under the terms, or already dispatched. There is a stronger argument that a contract exists at the listed price. A term letting the store cancel or reprice at will may be unfair under sections 23 to 25 of the ACL. Only a court or tribunal can decide that. General-law rules on obvious mistakes may also work in the store's favour. In this scenario you may be able to insist on the contract or claim damages for breach of it, but whether a court would order supply is up to the court, and any damages depend on what you can show you lost because the goods weren't supplied (for example, the extra cost of buying the same item elsewhere) and on whether a mistake defence applies.
• More than one price was displayed for the same goods. If the store goes ahead with the sale, section 47 generally prevents it supplying the goods above the lower or lowest displayed price. It may instead withdraw the goods until the price is corrected.
• The "error" looks deliberate. Examples are a low price used to draw you in, a higher price added at checkout, or the same "mistake" repeated. Then misleading conduct under section 18, false or misleading price representations under section 29(1)(i), and bait advertising under section 35 may apply. You may be able to claim damages for loss caused by the conduct (section 236), and the conduct may be worth reporting.

Whichever scenario fits, start by writing to the business that sold to you. Then go to your state or territory consumer body if your complaint meets its criteria, and then, if needed, to a court or tribunal with jurisdiction (the right forum depends on the dispute type and amount, so confirm it on the official site).

What the law actually says

Contract formation is general law, not the ACL. Whether a contract was formed, and whether a mistake allows the store to avoid it, are decided by general contract law and the terms you agreed to. Mistake principles may affect whether a contract was formed or can be enforced, for example where one side made a fundamental mistake, such as about the price, and the other side knew of it. The doctrine, the knowledge test and the remedy are technical and fact-dependent, so get advice if it matters. How the law treats your order depends on its facts. A price that is a fraction of the usual price is more likely to look like an obvious mistake than a modest discount does.

Misleading or deceptive conduct (section 18). A business must not, in trade or commerce, engage in conduct that is misleading or deceptive or likely to mislead or deceive. A contravention needs no intention to mislead. Whether a displayed price that is obviously wrong actually misleads anyone depends on the facts. A reasonable shopper may not be misled by a price that is plainly a typo. Our section 18 deep dive explains the test.

False or misleading representations about price (section 29(1)(i)). A business must not make a false or misleading representation with respect to the price of goods or services. This is most relevant where the price you were shown wasn't the price you were charged. It may also apply to a false current price, an inflated "was" price, a "sale" price that wasn't genuine, or a misleading claim about how much you save.

Bait advertising (section 35). A business must not advertise goods at a specified price if there are reasonable grounds for believing it won't be able to offer them at that price for a reasonable period and in reasonable quantities, and it is aware, or ought reasonably to be aware, of those grounds. Under section 35(2), a business that advertises at a specified price must offer the goods at that price for a period that is, and in quantities that are, reasonable, having regard to the nature of the market and of the advertisement. A genuine one-off data-entry error won't necessarily meet those elements. Section 35(1) is most relevant where the low price looks like a deliberate lure; section 35(2) doesn't depend on what the business knew.

Single price (section 48). When a business promotes goods of a kind ordinarily acquired for personal, domestic or household use, and quotes part of the price, it must also show the single total price prominently. That total includes compulsory fees that are quantifiable. Delivery charges can be shown separately, but if the business knows the minimum delivery charge, it must state that minimum. A price that grows at checkout through charges you couldn't opt out of may raise a section 48 issue.

Multiple pricing (section 47). A business must not supply goods that have more than one displayed price at a price that isn't the lower, or lowest, of them (section 47(1)). A displayed price includes a price shown on or with the goods or represented in any other way from which it can reasonably be inferred to apply to them (section 47(2)). Some prices don't count, such as a unit price presented as an alternative way of expressing a displayed price, or a price in a foreign currency (section 47(4)), and a catalogue or advertisement price stops counting once it is retracted and the retraction is published with at least a similar circulation or audience (section 47(5)). The ACCC says this applies "even by mistake", and that the same choice applies where the checkout price in store or online doesn't match the displayed price: sell at the lowest price, or stop selling the item until the price is corrected. Section 47 doesn't help where only one price, the mistaken one, was ever shown.

Accepting payment and not supplying (section 36). If a business accepts payment, it must supply the goods within the period it specified, or within a reasonable time if none was specified (section 36(4)). This doesn't apply where:

• the failure was due to another person's act or omission, or a cause beyond the business's control, and it took reasonable precautions and exercised due diligence (section 36(5)); or
• it offered different goods as a replacement and you agreed (section 36(6)).

It is also a contravention to accept payment while intending not to supply (section 36(1)), while intending to supply materially different goods (section 36(2)), or where there are reasonable grounds for believing the business won't be able to supply within that period or a reasonable time and it is, or ought reasonably to be, aware of them (section 36(3)). A later cancellation doesn't by itself prove what the business intended or knew when it took your payment. Section 36 itself doesn't create an automatic refund right. Repayment comes by agreement, by cancelling under the contract, through damages under section 236, through court orders under sections 237 and 243, or, if no contract was formed, through a general-law claim to recover money paid.

Unfair contract terms (sections 23 to 25). Many online stores use a standard form contract. A term in a consumer standard form contract that is unfair is void (section 23(1)). Whether a term is unfair is for a court or tribunal to decide if it's disputed. The contract continues if it can operate without that term (section 23(2)). A term is unfair if all three of these apply:

• it would cause a significant imbalance in the parties' rights and obligations;
• it isn't reasonably necessary to protect the legitimate interests of the business (presumed, unless the business proves otherwise, section 24(4)); and
• it would cause detriment if relied on (section 24).

Section 25 gives examples of terms that may be unfair. They include a term letting only one party terminate or avoid performance, and a term letting a party vary the upfront price without the other party having a right to terminate. A clause letting the store cancel any order "at its absolute discretion" may fall into that territory, though a court or tribunal weighs transparency and the contract as a whole (section 24(2)). A narrowly drafted clause dealing only with genuine pricing errors isn't automatically unfair. Proposing, applying or relying on an unfair term can itself be a contravention (section 23(2A) and (2C)).

Damages (section 236). If you suffer loss or damage because of a contravention of section 18, 29, 35, 36, 47 or 48 (or because the store proposed or relied on an unfair term in a standard form contract, section 23(2A) and (2C)), you may be able to recover it by action against the business (or any person involved in the contravention). You must prove the loss was caused by the contravention and provide evidence of it. Under general legal principles, loss you could reasonably have avoided may not be recoverable, and you can't claim the same loss twice. The action must be started within 6 years after the day the cause of action accrued (section 236(2)). An application for orders under section 237 has the same 6-year limit (section 237(3)). Section 236 damages are separate from a claim for breach of contract, which depends on the contract being formed in the first place.

The consumer guarantees still apply if the goods arrive. If the store honours the price and delivers, the goods still carry the consumer guarantees, such as acceptable quality under section 54. Under section 64, a contract term is void to the extent that it purports to exclude, restrict or modify the guarantees or the remedies for breaching them. A discounted or mistaken price doesn't remove the guarantees.

When this applies (and when it doesn't)

Trade or commerce. Sections 18, 29, 35, 36, 47 and 48 apply to conduct in trade or commerce. That includes most online stores and sole traders. A genuine one-off private sale, such as an individual listing something on a classifieds site, isn't covered in the same way. Most consumer guarantees also don't apply to such sales.

Consumer status. The pricing provisions don't depend on you being a "consumer". The consumer guarantees and the unfair contract terms rules have their own tests:

• Consumer guarantees (section 3). You acquired goods as a consumer if the amount paid or payable did not exceed $100,000, or the goods are of a kind ordinarily acquired for personal, domestic or household use or consumption, or they are a vehicle or trailer acquired mainly to transport goods on public roads. Any one limb is enough. Goods bought for re-supply, or to use up or transform in trade or commerce in production or manufacture, or in repairing or treating other goods or fixtures on land, are excluded.
• Unfair contract terms. A consumer contract under section 23(3) is one with an individual buying wholly or predominantly for personal, domestic or household use or consumption.

Check how these tests apply to you.

Who sold to you. Identify the business that supplied you from the checkout screen, the receipt or order confirmation, and the terms that applied when you ordered. Don't assume the website you paid through is the seller. On a marketplace, the ACCC says consumer guarantee rights run against "the seller you buy from, not the platform itself", although the platform may be able to help (ACCC: buying online). If the platform itself sold the goods, it is the seller.

Overseas stores. According to the ACCC, an overseas business that supplies goods directly to consumers in Australia must follow the ACL, including the consumer guarantees. The ACCC also says the ACL doesn't cover you if:

• the business doesn't directly offer its products in Australia;
• the goods go to an overseas address and are then forwarded; or
• the whole transaction happens overseas.

Getting a remedy from an overseas business can be hard in practice.

Not covered: wanting the bargain price on a product the store never sold you, where the store corrected the listing before you ordered.

What to do today

1. Capture the evidence now. Listings get corrected quickly. Save screenshots showing the product, the price, the date and time, and the URL. Also keep:

   • your order confirmation and any acceptance or dispatch email;
   • the payment record; and
   • a copy of the terms and conditions as they stood when you ordered.

   An order confirmation or receipt number for an internet transaction is one form of proof of transaction under section 100. A bank record may also be sufficient, depending on whether it identifies the business, the transaction and the goods clearly enough.

2. Read the terms. Find out when the store says a contract is formed, and whether it reserves a right to cancel for pricing errors. Check whether the store had already accepted your order on those terms before it cancelled, and whether a message was a real acceptance or only an automated acknowledgment. Check too whether more than one price was shown.

3. Check whether you were charged and refunded. If the store cancelled but still holds your money, ask for the refund in writing.

4. If you paid recently by card, ask your card issuer now. A chargeback may be available where you paid but the goods weren't supplied and the store hasn't refunded you. If you paid with buy now pay later, ask the provider about its own dispute process; that isn't a chargeback. Time limits follow the card scheme's or provider's rules, not the ACL, so check them early. AFCA says to contact the store first, but don't let a provider deadline pass while you wait. Describe the dispute accurately to your card issuer. A disputed price isn't necessarily an unauthorised transaction. A chargeback isn't guaranteed, and stopping a payment doesn't end a contract.

5. Write to the seller. Set out:

   • what you ordered and when, and the price shown;
   • when and how the order was confirmed;
   • what the terms say; and
   • what you're asking for: supply at the agreed price if you say a contract was formed, a full refund if it was cancelled, or an explanation of any higher amount charged.

   If you think the price was a deliberate lure, or you were charged more than the displayed price, say so and refer to sections 18 and 29(1)(i), and to section 47 if more than one price was displayed. If you write, fairgo can generate a demand letter for you.

6. Give a deadline. 14 days is a practical default, not an ACL requirement.

7. Record any real loss. If you can show loss caused by the store's conduct, keep evidence of it. One example is a non-refundable cost you incurred in reliance on a confirmed order.

What if the business refuses

Your state or territory consumer protection body. It may help, for example by contacting the business or conciliating, if your complaint meets its criteria. Most expect you to have tried to resolve the matter with the business first. Eligibility rules vary by state and dispute type; in the ACT, for example, statutory conciliation applies only where the remedy you seek is worth $5,000 or less and you agree, and Access Canberra is running it as a pilot for complaints the Commissioner for Fair Trading selects. These bodies don't make binding orders in ordinary consumer disputes and can't make the business settle. Contact details are at /agencies.

A tribunal or court with jurisdiction. In NSW, Victoria, Queensland, the ACT and the NT, a tribunal (NCAT, VCAT, QCAT, ACAT or NTCAT) hears many consumer claims within its limits. In Western Australia, South Australia and Tasmania, ordinary consumer claims go to the Magistrates Court. Jurisdiction depends on each forum's enabling legislation, the type of claim and the amount, so confirm the forum and its current thresholds on the official site before filing.

If you and the seller are individuals living in different states, a state tribunal that isn't a "court of a State" may lack power to decide the dispute, because it falls within federal jurisdiction. NCAT and VCAT can't decide such disputes, and the issue isn't necessarily confined to them, so confirm jurisdiction with the forum before filing; the claim may need to go to a court. This issue doesn't arise where the seller is a company.

You can usually run a claim without a lawyer, though some forums restrict legal representation (QCAT, for example, requires permission). Check current filing fees on the official site, and ask about fee exemptions, reductions or deferrals if cost is a concern. Our guide to choosing the right tribunal or court has more.

The ACCC. The ACCC investigates systemic conduct rather than individual disputes, so it won't resolve your claim. Reporting a pattern, such as repeated "errors" or prices that rise at checkout, can still be worthwhile.

If the store offers a voucher or partial credit to settle, read it carefully. A "full and final" settlement or release may end your claim, and saying you accept "under protest" doesn't necessarily preserve your rights. Get advice before signing anything described as final.

Common mistakes

• Assuming the ACL forces stores to honour every listed price. It doesn't. Whether you have a contract is a question for the terms and general law. The ACL targets misleading pricing and bait tactics.
• Overlooking a second price. If two prices were shown, section 47 may stop the store charging the higher one.
• Assuming the store can cancel whatever its terms say. A term in a consumer standard form contract that is unfair is void. A cancellation or repricing clause may be challenged, though only a court or tribunal decides.
• Not saving the listing. Without screenshots and the terms as they stood, it can be hard to prove what you were shown.
• Claiming loss you didn't suffer. Damages under section 236 cover loss caused by the contravention. Missing out on a bargain may not be recoverable loss, depending on the facts.
• Mislabelling a chargeback. Telling your bank a transaction was unauthorised when you actually dispute the price may undermine the request.
• Waiting. The ACL has no single warranty-style expiry, but limitation laws and forum rules still apply. Section 236 claims must be started within 6 years after the cause of action accrued, and chargeback windows can be much shorter.

Related reading

• Your rights when buying online under the ACL
• Section 18 deep dive: misleading or deceptive conduct
• Section 29: false or misleading representations about goods
• Business refused your refund? Here's what to do next
• Online order never arrived: your rights
• Bought from overseas or on Amazon: does the ACL apply?
• Section 64: why disclaimers can't remove your guarantees

This article is general information about Australian Consumer Law, not legal advice. It also touches on complaint and escalation pathways (state and territory consumer bodies, tribunals and courts, the ACCC, AFCA, card chargeback rules and buy now pay later providers' dispute processes) and limitation laws, whose scope, rules, thresholds and processes sit outside the ACL or can change. Confirm the current position with the relevant body before lodging. For advice on your specific case, see your state or territory consumer body — full list at /agencies.