Marketplace hits back at customers’ ‘price jacking’ claims

THERE’S a sneaky way countless Aussies are being ripped off during their online shopping — and it turns out it’s entirely legal.

LAST week, details of eBay’s so-called “price jacking” problem emerged — and now, readers have responded with claims it’s a “very common” issue.

Price jacking refers to the practice of sellers artificially inflating the original price of an item during a sale, to make it seem like shoppers are getting a better deal.

But in reality, consumers are being ripped off — and the practice is not only unethical, but also illegal.

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In last week’s article, news.com.au referred to a Life Hacker report which revealed Allphones’s eBay store was recently caught selling the Samsung Galaxy Note 9 for a massive 20 per cent off.

But the pre-sale price was listed at $1619.99 — a huge $120.99 mark-up on the recommended retail price.

At the time, an eBay spokeswoman confirmed the seller had been removed from eBay’s 20 per cent off tech promotion, as they were “in breach of our retail promotion terms and conditions”.

“We have measures in place to ensure sellers aren’t artificially inflating their pricing — specifically to benefit from the sale discount,” she said.

The same product fetches very different prices at Bunnings and on eBay. Picture: Supplied

While price jacking is against the law, it can be hard to crack down on in the case of third party sellers who list their items on online marketplaces such as eBay and Amazon.

Since that article was published, news.com.au has been contacted by a number of readers who claim the problem is widespread online and in some bricks-and-mortar Australian retail stores.

“Price jacking during discount promotions on eBay is common practice, eBay know this ... and do nothing,” one reader claimed.

Another said it was a case of “buyer beware” but that eBay was “pretty much a license to print money, and not for consumers”, with another claiming price jacking was “very common”.

Queensland University of Technology retail expert Dr Gary Mortimer said the practice was clearly wrong.

“You can’t advertise the price of a product that has never been sold at that full price,” he said.

“As a hypothetical example, you might have a rug retailer selling a rug and saying it was originally $500, but that the price has been slashed by 80 per cent.

“For that to be a legal ad, they must have sold at least some inventory at that original price point.”

He said it wasn’t unreasonable to expect some “rogue sellers” might “misconstrue the original price of items to indicate a bigger discount”, but questioned how widespread the problem really was.

“It’s certainly not done by any reputable retailer because it’s an illegal practice,” he said.

And while specific proof of price jacking might be hard to find, another news.com.au reader provided evidence of Ozito garden products being sold on eBay well above prices charged at Bunnings Warehouse, the national stockist of the brand.

It’s important to note this is not an example of price jacking — third-party sellers are free to charge whatever they want — provided they don’t lie about an item’s original price and the “savings” being offered.

eBay is also not responsible for a seller’s asking price and differences in prices between sellers and retailers does not mean the price has been “jacked up” or is misleading.

Sellers are legally able to sell a product at a price they deem is appropriate, even if that price is well above a manufacturer’s recommended retail price.

However, it is a clear example of “buyer beware” — and a reminder to do your homework before buying online.

An eBay.com.au spokeswoman said eBay was not a seller or a retailer, but rather was “a platform that connects buyers and sellers”.

In a statement provided to news.com.au, the spokeswoman said eBay took price jacking claims seriously.

“All sellers who take part in our retail promotions are subject to contractual terms and conditions that prohibit the inflation of pricing to take advantage of discounts,” they said.

“We will continue to enforce these as part of our ongoing commitment to ensuring genuine value is offered by our sellers.

“We also offer Best Price Guarantee — our commitment to buyers that if they find a cheaper price on another site, we’ll not just match the price, we’ll beat it by five per cent.

“eBay is built around the idea that people are inherently good. We encourage our community of buyers and sellers to let us know if something doesn’t look right.”

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