A couple of weeks back when uploading our data feed, a couple of products which were regularly $99.99 accidentally got uploaded as $0.99. It didn't take long for a few folks to purchase these items. This unfortunately isn't the first time this has happened and I'm sure we're not the first ones to go through this.
Normally when an error like this happens, I'll suck up the loss in the name of good customer service. On this one though, given the huge discrepancy, I canceled the orders, explained what happened and asked the customers to re-order and provided them a fairly considerable coupon. All of the customers were understanding and grateful for my candidness but one customer was very annoyed and pulled out words like 'false advertising', 'sue', etc. (eventually I reasoned with him and we came to some understanding).
Although I knew the threat of legal action was the idlest of threats, I've always wondered about the legality of situations like this. Some customers are quick to paint this as 'false advertising'. I, possibly naively, suspect there must be some legal allowance for accidental errors like this which bare no malicious intent to deceive. I worry though that if a customer has paid for an item this instigates a contractual obligation (although I can imagine scenarios with far direr consequences than mine in which a car dealership accidentally lists a Ferrarri for $100 instead of $100,000!).