Not all preorder 'price promise' promises are the same

[Mel_H]

With the price increases, most recently by Bachmann, it has had an effect on pre-order 'price-promises' by some retailers.

 

For those who have pre-orders in place, and think they are secure in getting a model of their chosen favourite (and possibly high-demand) model, it is worth checking what you have.

 

Although, in theory, under law you have a contract, in practice it doesn't work like that.

 

For example, Rails of Sheffield used to have a '12-month' guarantee on the fixed advertised price, this has now changed in the last few days to the statement "at least 15-25% less than the RRP"

 

This has come about, I hear,  after a dispute with a customer, who hadn't clicked on the logo to read the hidden small print which used to say 'guaranteed price for 12 months', but had placed their order more than 12 months ago. When the item arrived last week, Rails e-mail to say they were not honouring the price promise, because of its age and if the customer wanted the item, they'd have to pay much more. I'm happy to report that in this case the dispute was settled and the customer is now happy.

 

Hattons' statement on its website seems to be much more fixed. Rails has had the advantage of offering lower prices, but if they don't stick to them, what's the point?

 

Model Railways Direct (of Portishead) is a bit loose in what it promises.

 

Extract from all threes' website are below.

 

With a number of long-awaiting items that may well sell out swiftly (e.g. Hornby's Cock O the North, Bachmann's 1F) what should the modeller do?

 

Do you hope that your chosen retailer doesn't send you an e-mail saying the price has gone up massively, whereas if you used a different retailer you could have got a better price, but they have no stock?

 

Obviously, no-one would expect a retailer to sell less than cost price (the issue Rails had), but with new Chinese prices coming in higher, it's going to be a problem...

 

Time to look at what you've ordered, from whom  and review your decision, I might suggest, to avoid a nasty shock later.

 

And, perhaps more clarity from retailers might be helpful. After all, no-one wants unhappy (potentially ex) customers, do they?

 

I should add, that I am a satisfied customer of all three retailers (and more, including my local hobby store), but I'm off to review my pre-orders!

 

[darren01]

Hi 

The thing is if you pre-order and the model take more than a year to come out, you end up paying the new price, then if you order to late you may not end up with one.

I like to know how many models come out within a year ,i bet not many.

[TheSignalEngineer]

A while ago I had a pre-order with Rails which took about two years to come in. Before they delivered they called to check my details were still valid and asked if I was happy with the new price, which at that time was about 4% above the original quoted.

I suppose nowadays with such big price hikes from manufacturers they would need a dedicated phone line and assistant to do that.

[jjb1970]

This is going to become quite normal I think. Suppliers are modelling the production runs they order from their manufacturers to avoid holding inventory. This means that if you want to be sure of getting the model (assuming the supplier and the shop both manage their ordering) then you need to pre-order. However the often long lead times mean that retailers cannot reasonably commit to price promises for some open ended time which can often be in years rather than months whilst as a consumer if I order something I think it is quite reasonable that if the delivery slips by that sort of time then there should be no issue with backing out of the purchase as who knows what will happen over the sort of time frames which seem normal in terms of model deliveries? Whilst I see the advantages of a pre-order system as advocated by some manufacturers I have to say that as a consumer I do not like it and for the most part I take the risk of missing out and ordering when models arrive rather than pre-ordering, but that is just my personal choice.

[Neil]

Some thoughts.

 

Pre-order with a fixed price - fair.

Pre-order with an explicit guide price - fair

Pre order with a fixed price (with terms which allow for an increase buried in the small print) - bit sharp.

 

Are the increases on the pre-order price to protect the retailer from making a loss or to protect their profit margins?

 

Is a pre-order the same as an order?

[rembrow]

This issue has been brought into sharp focus by the recent price increases from Bachmann, which have been so significant that the price the retailer pays Bachmann, is likely to be very close to the original retail price they were offering, thus leaving them with a loss or a very small gross profit, but that price point is unsustainable to pay overheads. The issue is doubly compounded for the retailer as Bachmann and Dapol and Heljan announce new tooling products when little if any r&d have been carried out, such that the model will take 2-4 years before it gets to the retailer. They do this to try and 'fix' that model to themselves, as the competition will not want to produce the same model and thus directly compete. Hornby don't tend to do this and Bachmann have been caught out a couple of times by Hornby announcements of directly competing products, which will be well advanced on R&D. Unfortunately Hornby have still suffered release delays due to production problems. Hornby did however have a policy of honouring the wholesale price that was in force at the time the retailer placed their order and my local retailers did apply lower prices to customers who made early pre-orders. I don't know if that Hornby policy still applies. 

 

During that 2-4 year period it is now a lottery as to how much the price will have risen, but what we do know from Bachmann is that there will be significant price rises in their products for the next 4 years, therefore I can't see that any retailer can offer a guaranteed price promise with that level of uncertainty but with the knowledge that prices will be going up year on year by a significant level.

 

I suspect that the price guarantee is going to be a thing of the past, partly due to the uncertainty of future prices, but also because the main players, Hornby and Bachmann, are not issuing pricing on their products. This year Hornby has not issued an rrp price list, and many of Bachmanns new products from its 2013/14 catalogue have prices as 'tba'.

[Maltazer]

I was asked to pay an extra £4 for my Jaffa Cake MLV by Rails (the 12 month promise had expired), but the final price was still 10% below what is being asked for a non pre-order model today, so I'm not too fussed.

 

I was surprised they went to the trouble of potentially annoying a customer for such a small sum, but maybe that's a sign of just how tight the margins are.

 

Mal

[Bernard Lamb]

In the real world many companies quote in their t&c " price ruling on date of despatch".

In our hobby we have been used to rather better than this with various options regarding "price promise".

It looks like those days are well and truly over.

What can you do about it? SFA

If you get better than RRP - 15% then count you self lucky.

That will look like a good deal before long the way things are going.

In any financial arrangement a guarantee is only worth any thing until it needs to be used.

Bernard (who at one time had a pension that was "guaranteed" by the government and was an eye watering amount of money compared with the sums that a few on here are arguing over. Settled now more or less and only mentioned to put things into perspective).

[Karhedron]

A price promise is not legally binding because no money has changed hands yet. The only thing that shops have to lose by failing to honour their price promises are customer good will. In the light of recent price increases from Bachmann, they will have to decide how much that goodwill is worth.

 

I know that Hattons raised their prices a couple of months ago (after the Bachmann announcement) but promised to that anyone who had already ordered that their prices would be honoured. We shall have to wait and see when my Farish Castle and 6400 arrive if they are as good as their word.

[steveb860]

Who would be a retailer these days? No stock, whopping price rises , what stock  there is getting so  expensive that many on here are very vocal about not buying it. None of these retailers foresaw the price rises to this extent, so have been caught between a rock and a hard place.

Personally I think customers should be a bit more understanding towards the retailers, accept that the retailers need to turn a profit to stay in business and understand that realistically these pre order prices cannot be honoured without substantial loss to the retailer.

[Maltazer]

Oh don't get me wrong - I don't hold Rails responsible for the price hike (and the guarantee period *had* expired anyway).  

 

In this day and age though,  I really should be able to order directly from the manufacturer, and not have to give a cut to the middle man

 

Mal

[Colin_McLeod]

A price promise is not legally binding because no money has changed hands yet.

 

The contract to supply goods or services for payment becomes legally binding as soon as agreement is reached. The agreement can state that payment is due immediately or at some date in the future (e.g. when the shop gets its supplies; when the work is completed; three weeks before your holiday starts; on 1st August 2014 or whatever)

 

Contracts could never work if they only became legally binding when money had changed hands.

[andyman7]

The contract to supply goods or services for payment becomes legally binding as soon as agreement is reached. The agreement can state that payment is due immediately or at some date in the future (e.g. when the shop gets its supplies; when the work is completed; three weeks before your holiday starts; on 1st August 2014 or whatever)

 

Contracts could never work if they only became legally binding when money had changed hands.

But the restitution available for a contract where no money changes hands is normally insignificant, which is why normal contracts require a deposit.  

[Maltazer]

But the restitution available for a contract where no money changes hands is normally insignificant, which is why normal contracts require a deposit.  

 

Read the terms and conditions that you agree to when you place your order (for anything, not just model railway items).  

 

They will clearly state at what stage in the process the order has been accepted and a contract established.

 

Mal

[YesTor]

Read the terms and conditions that you agree to when you place your order (for anything, not just model railway items).  

 

They will clearly state at what stage in the process the order has been accepted and a contract established.

 

Mal

 

Simply placing an order with any retailer does not necessarily automatically imply that any contract has been formed.  By definition, "placing an order" is a customer's offer to purchase said goods at the advertised price.  Quite often a "contract is formed" only when the retailer processes/charges and despatches said order.  It is also worth noting that up until that time the retailer reserves the right to decline any customer's order at their own discretion (and this could be due to any reason, for example such as a suspected fraudulent transaction).

 

Similarly if there has been an error in the displayed price then the retailer is under no obligation to supply at that price.  The same applies if there is a subsequent change in price.  Sure, the retailer must then take the responsibility to inform the customer of any error, or the change in price, and then offer the customer the choice of either accepting the product at the new or corrected price or indeed the option of cancelling the order.

 

Sometimes in any industry prices change for any number of reasons which are quite often beyond the control of any retailer.  At the end of the day retailers aren't charities and they have to turn a profit and as such cannot be expected to ship orders at a loss.

 

Lastly, if by all of the above it sounds as though I'm on the side of the retailers, then well perhaps I am a little biased, quite simply due to running my own retail business (not in model railways I might add), and I know firsthand the immense difficulty in sustaining prices in these type of situations.

 

At the end of the day the choice is simple... 

 

If you accept the price and want the goods then go ahead and make the purchase.

If you do not agree with the price then don't buy and simply go without, but it's no good anyone throwing their toys out of the pram in the process. 

[dandg]

Similarly if there has been an error in the displayed price then the retailer is under no obligation to supply at that price.  The same applies if there is a subsequent change in price.  Sure, the retailer must then take the responsibility to inform the customer of any error, or the change in price, and then offer the customer the choice of either accepting the product at the new or corrected price or indeed the option of cancelling the order.

 

Sometimes in any industry prices change for any number of reasons which are quite often beyond the control of any retailer.  At the end of the day retailers aren't charities and they have to turn a profit and as such cannot be expected to ship orders at a loss.

 

Lastly, if by all of the above it sounds as though I'm on the side of the retailers, then well perhaps I am a little biased, quite simply due to running my own retail business (not in model railways I might add), and I know firsthand the immense difficulty in sustaining prices in these type of situations.

 

 

Several years ago I went to one of the large computer retailers to buy a colour laser printer. There were around a dozen identical printers stacked up on the shop floor.  Four of these were priced at a little under £100 and the remainder were priced at over £140.  I selected one of the lower priced units and went to the check out.

 

The sales assistant discovered that  the price on the box did not match the price on the computer and that she would have to summon the manager. He explained that there had been a post Christmas special offer on this model but it had now ended. He then asked her to get another member of staff to change the prices on the other three printers and he sold me the printer at the price marked on the box because "that is what I'm legally obliged to do."  

[jjb1970]

The shop has two choices I believe where they make a mistake in pricing, they are either legally obliged to honour the advertised/marked price or alternatively withdraw the product from sale. They are not allowed to charge a higher price, although after withdrawal from sale they can obviously re-issue it at a new price. That is what my wife tells me anyway as when she worked in retail it was something she saw from time to time.

[Neil]

 

Several years ago I went to one of the large computer retailers to buy a colour laser printer. There were around a dozen identical printers stacked up on the shop floor.  Four of these were priced at a little under £100 and the remainder were priced at over £140.  I selected one of the lower priced units and went to the check out.

 

The sales assistant discovered that  the price on the box did not match the price on the computer and that she would have to summon the manager. He explained that there had been a post Christmas special offer on this model but it had now ended. He then asked her to get another member of staff to change the prices on the other three printers and he sold me the printer at the price marked on the box because "that is what I'm legally obliged to do."  

 

 

My local Co-op does the same with mislabelled goods.

 

To return to the 'pre order price promise' examples shown above, Hattons is very clear, Model Railways Direct has some ambiguity regarding paypal payments while Rails misleads. I would have thought that it's ultimately in both the customer and retailer's interests that an unambiguous approach is taken.

[Graham_Muz]

There is common misconception amongst both the general public and in many cases retailers that they legally have to supply a product against the initial advertised price if even it was wrong. This is simply not the case there is NO legal requirement for them to do so but many retailers will do as a matter of goodwill / customer service.
 
The process of buying from a shop is covered by not by standard contract law but a principle of "invitation to treat"

For example you go into the shop and see a price label for £10. This is an invitation to treat. This is basically the shop saying we will take £10 for the item if you are willing to offer it.

When you take the item to the till you are making an offer. Which is basically saying 'I am willing to offer you £10 for this item'.

The £10 you are offering is consideration. This is you promising to pay them £10. The shops promise or consideration is the item they are going to give you for the £10. Most contracts have to have some form of consideration (although not all).

Finally, the shop can decide whether to accept or not. At this stage they can still refuse to sell you the product and they are under no obligation to. Only when they have accepted your offer is the contract complete and they are bound to sell you the product for £10.

Both parties must be willing to enter in a contract and there must be a meeting of the minds. This is where both sides are totally clear what the terms of the contract are. Clearly if the shop and customer disagree on the price there cannot be a meeting of the minds.

It is a bit more difficult with online transactions because it is not always clear when a contract has been formed. In the past online retailers would accept as soon as you made a payment. However due to a few cases where shops lost money through pricing mistakes most shops now only accept your offer when they send the item out. This means even if you pay for an item, the shop has not actually accepted your offer even though they have taken your money - this means they can cancel the order. You should read the terms and conditions of the retailer to see what their stance is on pricing errors and when the contract is formed.

[Colin_McLeod]

As I said

 

...becomes legally binding as soon as agreement is reached

 

The latest posts are clarifying when that point occurs.

[darren01]

Hi 

Had an email from Hatton's about the new Bachmann models, one thing i do not understand is how they can say that the pre-order price they have set for these modes?.

Considering Bachmann have not set any prices on these models yet, so if you pre-order will you get the model at the price they have quoted,or will you end up getting and email/phone call telling you that it's going to coast £20-£40 more than what they quoted.

[Colin_McLeod]

Hattons seem to be offering pre order prices for some items but for other items they say that if the price goes up you will get a email with the right to cancel

[darren01]

The prices displayed are guaranteed (to be no higher) for all advance orders. Prices may occasionally have changed by the time the items appear in the magazines we advertise in. Occasionally we may reduce a price, prior to the items release. In these cases, all advance orders will be charged the lower price.

This is taken from Hatton's site.

[Paul.Uni]

From the Hattons product description of 31-528A "31-528A Bachmann Branchline Class A2 4-6-2 65029 in BR Lined green with late crest "Pearl Diver". Price is estimated - we will notify you if price rises and offer option to cancel OO Gauge (1:76 Scale)" (My bold)

 

All models with that description http://www.ehattons.com/stocklist/results.aspx?searchfield=cancel

[Maltazer]

From the Hattons product description of 31-528A "31-528A Bachmann Branchline Class A2 4-6-2 65029 in BR Lined green with late crest "Pearl Diver". Price is estimated - we will notify you if price rises and offer option to cancel OO Gauge (1:76 Scale)" (My bold)

 

All models with that description http://www.ehattons.com/stocklist/results.aspx?searchfield=cancel

 

In the absence of the manufacturers running a pre-order scheme with guaranteed prices, I think that's about as fair as you can reasonably expect.

 

Mal