Thursday, June 11, 2015

Will Reseller Bans Change the Face of Etail Arbitrage?

Many online sellers have found success from retail arbitrage. However, recent consumer complaints about products being sold on eBay and Amazon at higher prices (think Target and Lilly Pulitzer) have prompted large retailers to ban resellers from purchasing high volumes of product, putting a significant crimp in arbitrage efforts.

Several stores have updated their terms and conditions to reflect this changing attitude towards resellers. Below are a few policies we have found:

  • J Crew: Under their limits on purchases in their terms of use, it states; “...we may place limits on purchases and we do not authorize the purchase of commercial quantities of our merchandise. We also may, among other things, restrict orders placed by or under the same customer account, the same credit card, and/or orders that use the same billing and/or shipping address. We reserve the right to limit, cancel or prohibit orders that, in our judgment, appear to be placed in violation of this policy. We further reserve the right to cease doing business with customers who violate this policy.

  • Lululemon: On their FAQ page, under their Resale/counterfeit policy, they state; “...we completely recognize that once someone purchases our product they can do what they want with it. We do not, however, support those who acquire large volumes of our product to resell at an elevated price point.

  • Kohl’s: On their Q&A section, under the question “How can I purchase tax free at” and “Quantity Limits”, they state; “Kohl's offers merchandise to consumers through this site and its retail stores. Kohl's is a retailer, not a wholesaler, and Kohl's does not sell to individuals or dealers for the purpose of resale to others. Kohl's reserves the right, in its sole discretion, to limit the quantity of items purchased per person, per household or per order. These restrictions may beapplied, at Kohl's discretion, to orders placed by the same account, the same credit card and/or orders that use the same billing or shipping address.”

With the increase of activity on social networking sites, it is highly likely that bigger retailers will continue to listen to the complaints and take action against reseller efforts. In a recent EcommerceBytes article, Target Bans Reseller’s After Last Month’s Lilly Pulitzer Incident, they state that Target is not accepting reseller tax exempt IDs and will not sell to buyers who have a reputation for buying large quantities and reselling.

Barbara Anderson

Marketing Coordinator