I find myself wondering if there was an impact on the employee(s) who made the mistake. A mistake of this size could easily be a job ender.

It reminds me of an evening around 10 years ago when my wife and I went to a Williams Sonoma store to make a long planned fairly high dollar purchase of 12 dinner place settings. Everything was packaged in boxes each of which contained four boxes each of which contained one place setting.

When the store clerk rang everything up, the price seemed awfully low but it was a long planned purchase so I didn't dwell on it. As we started to cart the goods out of the store, I stopped and checked the receipt and found that we had been charged only 25% of the price of all the place settings and that the only things we paid the correct prices for were for the additional serving pieces.

When I went back and told the clerk about the mistake, she broke down in tears and told me that she was a new employee, that the manager normally checked everything she did but was trusting her while she took a break, that she was certain she would have been fired if I had not told her about the mistake and that she desperately needed the job.

My point is ... just because you a dealing with a large company, there can be impacts on the people who make mistakes. I guess everyone has to make their own choices on whether or not to take advantage of these mistakes but I am certain that those few people I consider to be my true friends would never do that.

 

Jim - Good points. I definitely understand and respect your point of view. My view is similar but I look at it slightly differently in that I think there is some difference in the two situations. In your case at the dish store, you clearly knew a mistake had been made, and you clearly knew exactly who made it. Being a good honest person, you did the noble and righteous thing for that specific situation and for that specific person.

If we assume an individual made a mistake in pricing then the Costco situation is very similar in absolute terms but I think there is a difference in scale, causality, and proximity that might change the perception of the ethics involved. It is not clear that a specific individual made a mistake in the Costco case. I would assert that it is actually more likely that there was a database error, data file read error, in other words a process or processing based error. And if it was a human error it is likely shared across more than one individual - usually the case in a process breakdown situation within an enterprise of Costco's scale. I believe most honest persons would have reported the error the clerk made on your dishes, but I also think lots of honest people would also have bought the Costco tires at the reduced price without being faced with a similar ethical dilemma. Having said that, I am sure that if these same people they knew it would hurt a Costco employee and possibly cost them their job, most would not buy the tires. I personally would love to buy the tires at $450 but I would not take them even for for free if it cost someone their job. That's my view, and I am not saying my view is correct at all, in fact I could be dead wrong from someone else's perspective.

It is a good point you bring up and its certainly something for us all to think about.

 

These website pricing errors are frequently the result of something grander than someone simply fat-fingering a numeral on a keypad. As Jabber stated, it could be anything from a database error, to an error in a promotional SKU that was exercised too soon or on the wrong item. These mistakes happen and its less likely anyone's job would be in question than in a retail environment. Especially since replacing an engineer at that level is NOT an easy task to do within a short period of time, as opposed to a minimum wage retail clerk at Big Box Store X.

 

We could look at it through the four lenses of ethics that I am sure everyone had in a class at sometime or another...

Rights: Do you have the right to purchase the tire and does the dealer have the right to refuse the sale?

Results: Does the action result in positive results, both short and long term?

Relationships: Is your relationship with the store going to change moving forward?

Reputation: Will people that you respect think of you differently if they were aware of the situation?

While I understand the point made by Kansas, and agree that it is inappropriate to take advantage of an error made by a new employee, I think the Costco situation presents a little different scenario.

In this case, the nationally publicized price during a promotion of Michelin tires was incorrectly set. An employee did not make a register mistake. Every person that visited Costco.com or the store was exposed nationally to the same pricing.

Is it ethical to purchase the tires at that price when we know that it has a high probability of being a mistake?

First, is it a mistake? Is it possible that Costco put a tire used primarily on large luxury cars on sale before the Christmas season in order to encourage owners of large luxury cars to purchase memberships and spend their large amounts of disposable income at Costco for holiday items? Probably not, but maybe.

I don't set the pricing, and neither do the employees in the stores. I, nor they, have the ability to lower or raise any advertised price. Costco stores are entirely company-owned, meaning no store manager has input into national pricing policies.

Back to ethics...

Rights:

It varies from state to state, but by the time anyone actually sued them for the tire price, it would be over the cost of the tire anyway. So we will say that we do not have a right to buy the tires. Costco, by the same reasoning, has the right to not sell us the tires. I know that it may not actually be legal, but after costs, it isn't worth it, so we take the short answer here.

Results:

Costco is going to eat about 400 bucks on this one. I've been eyeballing a Costco membership for a long time, but didn't like the idea of paying for the membership. The result of this exchange is a short term loss for Costco reflected by my short term gain. The long term result is that Costco now has a new member that fully plans to shop at the store, and I will be subject to their pricing, high or low. That makes a win for Costco and an even situation for me, being as if the pricing was really that good I would have signed up a long time ago. So we'll call that a short/long draw.

Relationships:

My relationship with the store did not exist before this exchange, so both Costco and I have created a new relationship. The guys in the store thought it was amusing, and there were definitely no hard feelings. Best customer service while getting burned that I had ever seen, LOL. The manager and I hit it off well, and I feel that both parties are better off now than before.

Reputation:

My friends and family are my ethics judges, so I use them for this portion. My friends all asked how i got such a great deal and wanted a Costco membership, and I don't think my family would care at all. Any person off the street likes an incorrect price, I think. No harm in getting a deal now and then. It would be different if it was a clerk only ringing out two tires and I was participative, either actively or passively, in the pricing error.

Last question of ethics is whether you would do it again...

Nope, I'd buy two sets! LOL

 

Even though I am a long term Costco shareholder, I have to warn you and others that Costco membership is addictive.
Over time you will find the great service and high quality merchandise will make you buy more and more from Costco. OK Costco commercial is over : )

 

In all fairness, just think of the possibility that we have all been charged more than the true price while having our purchases scanned at the local supermarket. These things can work both ways. How do we know that the Costco price for the tires isn't $10 more than it should be?

 

Costco happens to be one of those rare retailers who works on a strict markup structure throughout the operation, specifically 10 - 14%, depending on the item Even the outlying bricks and mortar operations (eg: Anchorage, Alaska) adheres to the same MU in spite of the high cost of landing inventory.

 

Kansas -

Good for you. Bottom line, it was the right thing to do. After all, 'character' is doing what's right when no one will even know.

The Costco situation discussed here is a tough one. Costco imports huge amounts of what are called 'gray goods' which is mdse. brought in by way of non-traditional resources, in most cases, w/o the blessings of the manufacturer and sold at a huge discount to regular market pricing. When initially viewing the price on the tires, it could have been interpreted by us, the consumer, as one of these types of buys although more than likely Michelin would not have been happy about the situation and could make future delivery of inventory to tire centers shall we say, 'difficult'.

Frankly, knowing the above and had I needed tires, I probably would have bought the tires at the large discount w/o asking too many questions.

 

I know this thread is more than a year old but I could have benifited from knowing about it then. Nevertheless, I am happy to report that I accidentally discovered INCREDIBLE price mark-down of Michelin Primacy MXV4 for my 2001 ES300 (V rated 16 inch) was true three days ago. I paid total of $633.84, out the door. I double and triple checked before making the purchase because on May of 2009, I bought the exact four tires for $718.36, out the door, with all conditions being the same (sale price, $70 off for four, free balance/rotation every 9k miles, etc). After 70,000+ miles, an identical tire replacement cost me $85 less. Doing a Google search for "michelin primacy mx4 costco" brought me to this thread and I simply had to chime in tell you all of the good news.

 

great find!