I wouldn't expect much from a precision instrument that sells for $6.99, on sale for $4.99.
I've used a couple of different digital thermometers in my lab, and I still trust the old-fashioned analog mercury ones most.
Many digitherms have a line inscribed on the metal probe. If you don't immerse the probe to this line, the readings are screwy...if you immerse the insulated part of the wire, the readings are screwy. Also, take readings in different parts of the tank - maybe you're measuring a cool deadspot that is being affected by warmer eddies of water from the filter flow.
Also, even with the expensive models, the equilibration time need to get a stable reading can be as long as a minute. You may simply have to keep it there for some time. The manual might say something about response time.
What is the instrument's precision, or accuracy? The instruction manual should say something like +/- 0.1 degrees F.
As far as it going on and off, is the battery seated well, and is the battery compartment door securely closed? I've had this problem with battery-operated timers, and solved it by taking out and replacing the battery. HTH