Dell caves in to customers over price glitch

Dell Computer is promising to make amends to customers who saw a great computer bargain turn into a big disappointment when the company blamed a pricing glitch.

The pricing glitch at Dell's online store late last month mistakenly allowed customers to order computers with two concurrent promotions. But instead of the computers, customers received notes from Dell's customer service representatives saying that their systems would cost hundreds of dollars more than they were initially quoted.

And although some customers canceled their orders when they heard the price would be higher, Dell executives said Monday that they have decided to honor the "discounted" price.

"Hopefully we can win the business back of customers that wanted to cancel their order," said spokesman Tom Kehoe. The company will contact the affected customers to let them know they can get the computer at the original price.

A.D. Mathur said he was told last week that the Dell Dimension L computer he ordered for $530 was going to cost $284 more. On Monday, Dell sent him email offering it at the original $530.

"Needless to say I am strutting around right now," Mathur said.

The pricing glitch at Dell was only the latest e-commerce pricing problem. In September, a glitch at Amazon.com allowed customers to order some DVDs for more than 75 percent off their list price. And this summer, pricing errors at Buy.com, Staples.com and Amazon-backed crafts retailer eZiba.com allowed customers to place thousands of orders for free or nearly free goods.

The pricing problem at Dell involved two different models of Dimension L computers. One, containing an Intel Celeron 566-MHz processor, was priced at $295. The other, which included an Intel Pentium III 800-MHz processor, was priced at $435. Some customers like Mathur paid more, depending on the options they chose for their systems.

Neither system came with a monitor. But the price on both included a $100-off promotion and a three-year, on-site service warranty valued at $99. Kehoe said running both promotions at the same time happened by "mistake."

In addition, many customers ordered systems with only 32MB of memory. They were later told by Dell representatives that the minimum amount of memory they could get for their systems was 64MB. The $284 extra charge that Dell asked Mathur and other customers to pay included $50 for the memory upgrade.

Many of the Dell customers first found out about the deal on the Dimension computers through a posting on the Techbargains.com Web site. The site, which posts information about special computer deals, had published several Dell deals in the past but had never seen any problems, said Norman Fong, Techbargains' chief bargainmeister.

"A lot of other companies have screwed up their database pricing," Fong said. "But I haven't seen Dell screw up before."