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Wednesday August 09 08:00 PM EDT

Coding glitches main culprit in e-tail fire sales

By Greg Sandoval, CNET News.com

There's little room for pricing errors on the Internet.

Although mistakes of this kind do happen in the offline world, the speed at which e-commerce moves can make a small glitch turn into a thousand-dollar error. Recent problems at Staples.com and Amazon.com have shown how online bargain hunters, tipped off via Web message boards, can sweep in electronically to cart away free or nearly free merchandise.

The frequency with which these pricing glitches have hit the e-commerce world has alarmed many industry experts, who say that companies need to be better prepared.

Poor code-writing is at the heart of many of the Web's most high-profile technical glitches, according to Eric Lazarus, president of New York-based Decision Smith, a company that helps dot-coms grapple with headaches such as pricing problems or discount offers gone awry.

"This is an ongoing problem that you find throughout the Web," Lazarus said. "The code needs to be reviewed by a team of people to see how it handles unusual activity."

Catching coding errors before the public does may be good advice for online retailers that are beginning to realize that pricing glitches can be costly.

No company knows this better than Staples.com, which on three occasions has seen either coupon codes or pricing systems go haywire and has mistakenly cut the prices of merchandise to almost nothing.

The latest incident occurred last week, when a person with the username "tiger6543" posted three coupon codes that offered discounts ranging from $40 to $288 on FatWallet.com, a consumer message board dedicated to Internet bargain hunters.

The unidentified person said a friend had obtained the codes by randomly punching numbers into the coupon tab field at the Staples.com site.

"After both of us made our orders and received our confirmations already, I'd figured I might as well spread the joy," said the posted message from the unidentified shopper.

A Staples.com representative said the coupons were intended for a select group of shoppers, and only a small percentage of the orders placed last week were shipped.

But the question remains: Why do Staples.com and other e-tailers continue to bump into these problems when so many remedies exist?

Tim Storm, founder of Monroe, Wis.-based FatWallet, who launched the site in December, said pricing glitches do occur frequently on the Web. Last month, a pricing error at Amazon.com's toy store cut prices 50 percent or more.

Also in July, Amazon-backed eZiba.com issued a coupon to customers that it meant for one-time use, but instead, some shoppers keyed the coupon's code in multiple times to order scores of goods.

At Buy.com, a coupon meant to be worth $50 off any order of $500 or more actually gave people $50 off purchases more than $50, making some orders nearly free. A pricing error at Staples.com let customers buy briefcases from the company for 1 cent, though they were supposed to sell for $59.99 each.

"Coupon glitches are rare in retailing, but they do happen to retailers whether they be online, catalog or in brick-and-mortar," said Staples.com spokesman Tom Nutile.

Still, Storm said Framingham, Mass.-based Staples.com has developed a reputation within the Web's bargain-hunting community as the leader for "coupon fiascos." He added that he is bewildered why some e-tailers are wrangling with pricing glitches when other Web stores have found ways to avoid them.

Cashing in with coupons "Coupons" in the online world are often sets of numbers that a customer types into a field on an e-tailer's Web site to receive a certain discount price. Some coupon codes allow customers to use them multiple times, and others are limited to a single use.

Ashford.com, Petsmart.com and Barnesandnoble.com are among the companies that employ one-time-use coupons, Storm said.

One way e-tailers can avoid coupon glitches is to tie a unique coupon code to a specific customer account. This is the best way a company can ensure that the person intended to receive the coupon is the one actually using it, Storm said.

Monitoring systems also helps alert companies when a specific product is generating a large amount of traffic.

Staples.com said it has a monitoring system in place, and that's how it prevented a large amount of goods from being shipped after last week's coupon error.

"When we have a rare coupon glitch, we catch it quickly because we closely monitor our operations," Nutile said. "The number of coupon glitches we have experienced and the dollar amount involved are minuscule."

http://dailynews.yahoo.com/h/cn/20000809/tc/coding_glitches_main_culprit_in_e-tail_fire_sales_1.html

-- (Dee360degree@aol.com), August 10, 2000

Answers

Scanning errors have been happening for years in bricks and mortar stores. The cyberworld is not different. In my experience in IT I have found that when a system initially goes up there is more attention paid to the data. As the system ages, data (price) errors creep in. If the stores involved do not make an effort to keep their data current as well as assign reliable resources to test any program changes, this is bound to happen.

As I stated in a previous post, I have often been critized for trying to schedule and setup complete and meaningful software tests. Others I have spoken to have experienced the same. The "get it out the door" mentality rules. That's why there are so many errors in software today.

-- K (infosurf@yahoo.com), August 10, 2000.

Good point K.

-- (Dee360degree@aol.com), August 10, 2000.