Bargain bloopers

WHAT DOES "INTERNET price" mean? E-business Web sites would like you to believe it means you're getting a special discount. All too often, though, what Internet pricing really means is that you must dig many layers deep to find out what you're really paying ... and what you're really getting.

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One reader reported a classic example of Internet pricing when he purchased a prepaid phone calling card a few months back on one of the many sites hawking such wares. "I purchased a $25 calling card that was advertised in their pop-up ad with a rate of 4 cents per minute," the reader wrote. "I figured that meant the card would be good for 625 minutes, but when I made my initial call, the system said I had only 501 minutes total."

When the reader contacted the calling card vendor, he was informed the rate was actually 4.99 cents per minute. "We are rounding down on the advertisement as the rate is below 5 cents," the company messaged him. "Our site is clear [and] you received the correct amount of minutes for your call." By "rounding off" the price in its advertisements -- where there was plenty of room to add a superscript ".99" if they were so inclined -- the vendor was actually raising its price almost 25 percent. And far from being clear, the only place on the site I was actually able to find the true rate was by going several levels down and scrolling through a long list of international rates to the listing for the United States. As the company has now reconsidered its policy and advertises a 4.9 cents-per-minute rate, I won't give them any free advertising by identifying them.

I will say that, based on the amount of gripes their sneakwrap tactics generate, all calling card sites should be treated with suspicion, big brand names included. Companies often tack on surcharges for various types of calls, hiding such fees deep in their fine print, if they bother to tell you about it at all.

Even if the price really is as advertised, the service might not be. One reader learned that lesson a few months ago after Inter.net acquired the ISP he was using for his dial-up connection. As a telecommuter making heavy use of what he thought was an unlimited account, he was naturally quite upset when informed by an Inter.net representative that he had exceeded his allotted monthly usage of 180 hours. "I explained to him that I was paying for unlimited service, and he said that it wasn't really unlimited," the reader wrote. "He said the 'real' unlimited time plan was $99 a month." The Inter.net rep then pointed him to a section of their terms of service that said, "You agree that Inter.net may establish limits concerning the maximum duration you may use Inter.net service in a given period of time," but nowhere on the Inter.net site could he find any specific mention of 180-hour limit or the $99 plan.

Even weeks after being told this, the reader found that all the dial-up plans were (and still are) advertised on the Inter.net site as offering "unlimited Internet access." As Inter.net officials explained it to me, however, there is a difference between "unlimited access" and "unlimited usage." Due to constraints imposed on Inter.net after its separation from PSI.net last year, the company has no other way of preventing excessive usage by a small percentage of customers, which it says then drives up costs for all users. I guess that might be perfectly fair, but it would be nice if potential customers had a way of knowing what the usage limitations are before they sign up.

Internet pricing can bite you even when you're the one doing the selling. A reader was surprised recently to receive notice from Billpoint, eBay's credit card payment service, that there was a problem with an item he'd auctioned off two months earlier for a few hundred dollars. "The guy who won my auction lived locally and wanted to pick it up," the reader wrote. "He paid for the item via Billpoint, and so I agreed. Yesterday I received an e-mail from Billpoint informing me that I'd received a chargeback on the auction." After receiving the notice, he e-mailed four others who had sold to the same buyer and discovered all were in the same boat. Each had let the successful bidder pick up his merchandise, and each was now being told the money would be taken from their bank account to reverse the charges.

Billpoint told them the chargeback decision is made by the cardholder's bank, as stipulated in the Billpoint user agreement. "The true cardholder apparently has nothing to do with this transaction," the Billpoint Chargebacks Team wrote one of them. "As a seller, you are responsible for the monetary reimbursement of the cardholder when a chargeback is filed. Please refer to the Billpoint User agreement."

To put it mildly, the five sellers were disappointed that eBay's payment system of choice would leave them with so little protection in a clear case of credit card fraud. "Basically, eBay left us on our own at the mercy of a completely faulty system that they created," wrote one who was out a $450 chargeback. "eBay and Billpoint lured a thief to the very door of my home, jeopardizing the safety of me and my family with absolutely no recourse or responsibility for their actions or their system that created this situation."

The good news is that eBay is now changing the system. An eBay spokesperson says that the newly inaugurated eBay Payments program offers a chargeback protection policy that should cover many situations of this type. The bad news is it only applies to payments made after March 12, 2002, so our five auctioneers are still out their money and their goods. And, at least as I read the new fine print, it would appear that transactions involving more than $250 require trackable proof of shipment, so maybe letting buyers come pick up their goods is a bad idea.