How Not to Do E-Commerce

My wife left the house for work this morning in a justified fury.  She had spent close to an hour on the phone with UPS – its mechanical voices and then varieties of humans, trying to track down an $800 TV purchased from Costco.com online and scheduled for delivery yesterday from UPS.  As with all these things, she got an order number from Costco and a tracking number from UPS.  As of a week ago, UPS’s site said the item was shipped, then it doesn’t arrive, and the entire transaction disappears from UPS’s site.  The tracking number doesn’t identify anything.

An hour later on the phone with unhelpful UPS staff, they kept telling her that even with a Costco order number, they could not help her unless she could give them … the zip code of whatever Costco.com shipping center from which the TV had shipped.  Huh?  The consumer-purchaser of something on the internet from a gigantic retailer is supposed to be able to figure this out to supply it to UPS?  My wife kept explaining to them that it was bought online and that Costco had given her an order number, and UPS had given her a tracking number, and it wasn’t really her problem to sort out their delivery arrangements, or track down her own stuff in their respective systems, or make their systems operate together.  They kept telling her that she had to talk to Costco and get the information, and bring it back to them, but that the order number from Costco was not sufficient, nor was their own tracking number, although it had been great a week ago.

Memo to UPS.  We’ve had great service from you folks, and I live by Amazon prime, but this exchange floored me.  I thought we were a decade beyond this kind of conversation about an online purchase.  Tell UPS what Costco.com warehouse zip code this might have shipped from, in an online order?  So it turns out that having taken the Costco.com order number in good faith was merely an invitation to get ambushed and a trap for the unwary who actually believed it meant something?

My Beloved Wife, by the way, was the soul of patience, unless you saw the look on her face – she sounded like a law professor talking to a 1L class, explaining to UPS that, “You know, Costco contracted with you to do this delivery, it didn’t contract with me, I don’t understand how this is my problem to sort out once I’ve given you the information that Costco and UPS thought was relevant for a consumer to know at the beginning of this.  I’m not trying to hide anything from you, it’s just that I don’t have any special information except for what you guys thought I needed to know at the beginning.”  She might have added, but didn’t, “I didn’t realize when I bought the TV that part of my obligation was to act as a principal motivating an unmotivated agent to do its job and without a lot of carrots or sticks.”

I didn’t think it was a good moment to raise this with my wife, but it did occur to me that it was a nice high school level example of “cheapest cost avoider” and externalities and agent-principal failures.  How on earth could it be efficient for my wife to sort out delivery systems and glitches between these two giants?  On the other hand, there might be a temptation for the giant systems to push the work off on the ultimate consumer to do the work, spend the hours on the phone – until either reputation costs the businesses enough (because of postings like this one?) or else Costco figures out that UPS is shifting costs that it (in the interests of Costco’s reputation and sales) believed it had contracted to UPS to deal with, and then polices UPS more effectively.

(PS.  Another hour on the phone later, UPS has figured it out and eventually the TV will come, inchallah.  They figured it out, but my wife had to supply the motivation, so to speak – more costs shifted to her in overcoming UPS’s disincentive to want to sort it out on its own.  As she said to me, “It’s like I have to spend a certain number of hours on the phone convincing them that I really, really want my own stuff.”  That’s shifting costs, too, but in a different way – UPS underinvests in service providers, particularly for resolving errors, and then uses extended time on the phone as a way of rationing the time of its overstretched customer service reps, even though, to take Costco and UPS as its contractor at face value, the contract price promised a very different level of customer service.  And do I sound like a law professor getting ready to teach a first year survey of very basic law & economics?)

(PPS.  Two quick notes, glancing at the comments.  One is that it’s not a question of delivery today or tomorrow – it is that UPS says it has no record of anything, although it had one a week ago.  Second, although quite so that Costco is the cheapest cost avoider, it opens for customer service only at 9 am, and not everyone has a job that permits one to spend a couple of hours at work on the telephone working out whether someone in fact owes you a TV – cost-shifting again.  This conversation was taking place in that magic moment when UPS opened its phone lines, Costco is closed, my wife has to be at work, and the clock is ticking.  I notice that a number of commenters think I’m merely being peevish – I think these kinds of simple agency contract problems are useful devices for thinking through larger problems, and that the sensibility matters along with the sense.  The irritation of some commenters seems to arise from the sense that the post is not worth the reader’s time, which is always a possibility, of course, but then it’s an interesting question – merely in my view, of course – who is the cheapest cost avoider, the writer or the reader?)