I last had this discussion sometime last year when Argos did much the same mistake here in the UK - but cancelled the orders. At the time a contract lawyer weighed in and explained there were various caveats and so forth that allowed them to do this.
(certainly prior to taking the money then they are able to simply cancel the order at any time. After that I suppose it depends on the country/contract law involved)
I know here in Ontario, they can cancel but they are legally open for violating the consumer protection act for misleading practices and a mistake is no protection in court.
An agreement between stores, and I believe one Amazon.ca upholds, is that they offer you the product at the original price with a $10 discount/credit (if it costs more than $10 - free if it costs less than $10). However, this is just a practice to placate the consumer as on gross mispricings like a $1000 TV for $5 people know they're taking advantage and will either be happy to take the $10 off, or will cancel the agreement thus removing all legal liability on the company. However, if the $5 had entered the till and a manager came running out trying to stop you leave with the TV, well you just got a $5 TV and if they stop you, they get up to a $250,000 fine and you get yourself a TV. Quite ironically though, if you notify the cashier of the mispricing, most store policies will give you the item for free regardless of price! So the people walking away with the $10 credit are really losing much more than if they had honestly notified a manager.
One of the caveats is that the agreement is generally to sell X number of products at $Y price, and if they don't have the quantity of products to supply the amount of orders they can actually cancel the orders and later reoffer them at a corrected price, which is probably what Argos got away with.
Are Zappos based in Ontario (I wasn't sure if that is why you mentioned there in particular?).
Ultimately it will depend on where the company is based; but for the most part mispriced items are usually explicitly accounted for in the Terms and Conditions of sale you agree to (I know that was part of what Argos used over here).
I seem to recall there was a legal argument over it.. because in the real world if a shop advertises a $10 for $1 there is no legal requirement (at least not here) for them to sell it at that price - if they notice. If they accept your offer to buy at the lower price then there is nothing they can do.
The argument was that digital sales worked in a different way (and that manually approving each sale like in a shop was infeasible) so I am pretty sure a lot of work went into making sure the law applied to when the item was shipped. I noticed Amazon still don't take money till they ship the item; so it could be this was never actually resolved.
(by the way I can't find any references to the laws you mention - got any links?)
If what you have said is true then the opposite action must also be true. (example based on my understanding of the sale of goods act).
You walk into a store and walk up to the till and ask to buy something, then at that moment the person behind the till tells you the price is wrong and it's actually 3 times that. Buy saying you wanted to buy it you are then contractually obliged under consumer law to then pay for the goods.
Doesn't sound right now does it.
Argos didn't get away with anything, they are no requirement under the sale of goods act to honor the price and can cancel the order (effectively they are refusing your business which is how it actually works but is obviously not worded as such for politeness) if they choose to.
