In this case I feel the problem is the fee being too low. The transaction may never be confirmed if there are no miners going to put it in the chain.

If I were the merchant I would not honor this transaction because of the lack of fees. Most wallets will include the fee by default for you, so the fact that it is lower than normal would be suspect to me.

It would be interesting to see what the behavior is at bitpay / coinbase if you author a transaction with fees low as this. Chances are they won't accept it?