Cheap Fares

Several recent news items caught my attention over this holiday weekend. In the first, it was reported that Delta airlines sold many tickets at a ridiculously low fare, and will honor those ticket sales regardless (they may have no choice because of a federal law requiring truth in advertising for airlines). As word of the cheap fares spread on Twitter and Facebook, people flocked to Delta’s website to buy these cheap tickets, even as they were aware that the pricing was an error.  They were very cheap: “A roundtrip flight between Cincinnati and Minneapolis for February was being sold for just $25.05 and a roundtrip between Cincinnati and Salt Lake City for $48.41. The correct price for both of those fares is more than $400.” In essence, they took advantage of an error and got something for much less than market value.

People did not seem to mind, and viewed this is ethically defensible. Consider this sampling of comments after an NPR article about this event: “The published price is the published price. It’s not like the passenger hacked into the system. Come on folks!” or “How did this airline’s mistake turn into us being unethical for buying their tickets? Their normal prices are the only unethical part of this situation.” or “They change their prices minute-to-minute based on their hidden math. If that math turns out to be wrong, I’ll sleep just fine.”

So most people, it seems, would buy the ticket, would not feel bad, and would not feel that they had made an unethical decision. I will come clean as well. I would absolutely buy a pricing error ticket, even if I knew it was an error.

Wells Fargo Kills a Homeowner

The second item was posted on Facebook by a friend of mine. It seems that years ago, a simple typographical error by Wells Fargo bank created a series of events that ended up with Wells Fargo erroneously foreclosing on a home, even after they realized their mistake. They billed the owner for unpaid property tax (it was actually his neighbor that was behind).  In order to collect the back taxes, they doubled his mortgage payments and as a result, he fell behind in his mortgage, and so they foreclosed and sold his home. Incredibly, Wells Fargo admitted their own error, but rather than correct it, they sold his home anyway! Eventually, the owner literally died in court trying this fight this. Naturally, we are all incredulous. Wells Fargo knew it made a mistake, but foreclosed anyway. They are the epitome of a heartless, cruel corporation and this is all reminiscent of a bureaucratic dystopia like Brazil.

But at the core, are these events really that different?  In each case, a technical error caused the sale to happen. In each case, the items should not have been sold. There was never a real $25 fare to Salt Lake and back taxes were never really owed. In both cases, the buyer benefits and the seller suffers. Why are we almost all OK with Delta being screwed out of airline fare but deeply offended at Wells Fargo? It seems like these events should be equivalent. Wells Fargo should not have sold  the condo, and Delta should not be required to honor those fares.

Clearing the Shelves at Wal-Mart

One might argue that the Wells Fargo case is different, the error was discovered before the sale. And so these events are not equivalent. So a third news story might be a better example. A few months ago, a technical error allowed people on food assistance (food stamps) to use their benefits cards without a limit. The error was made by by Xerox, who runs the EBT program in many states. In Louisiana, customers at a Wal-Mart, realized that the cards had no limit, word spread, and they cleared the shelves. Police were actually called, though Wal-Mart (much like Delta) said they would honour the sales, as no laws were broken. Card users knew this was a result of an error. But unlike  the Delta case, in which people are nearly universally accepting of the cheap fares, the benefits card incident was widely condemned. Comments like “No matter how you cut it, it was theft and those who took advantage should be prosecuted!” or “This is absolutely disgusting and everyone who used one of those cards and “stole” stuff should go to jail and forever have their EBT benefits cancelled for life.”, were common in the news reports.

I’m left with the same questions. Why is it alright to steal a fare from Delta (paying $25 for a $400 fare is stealing $375 worth of air time from them) but it is absolutely not aright to steal from Wal-Mart. Both are big corporations. Neither will be hurt by this minor glitch, and any tiny bit lost revenue would be passed on to another consumer anyway. Does this dichotomy exist because the Delta shoppers were on-line whereas Wal-Mart shoppers were loading up in person? Does this dichotomy exist because the Delta shoppers were from all walks of life, but the Wal-Mart  shoppers were “welfare types”. Is it more OK for a savvy traveler to steal from Delta than a welfare bum to steal from Wal-Mart? Would we condemn the Delta ticket buyers if it were revealed that all were on public assistance?

I do not have a quick answer, though I feel like a properly controlled experiment might be in the works.

Thanks for reading, and thoughtful comments are welcome, of course.