eBay Presidents' Day Sale Disappoints, Tricking Buyers With Fake Discount Deals
UPDATE 2-21-24
Once again we have the same sadly predictable end to the story as eBay sends out an email saying the HP laptop has had a price drop....back to the same $629.99 it was supposedly "discounted" to for this fake sale.
eBay's Presidents' Day Sale is in full swing but unfortunately, Honest Abe would be disappointed, as yet again many dishonest sellers are using fake strikethrough pricing and false discounts to trick buyers into thinking they are getting a deal.
As usual, the terms and conditions come with a laundry list of "events" for qualifying items, indicating the discount is likely being funded at least in part by participating sellers.
However many of these brands have special agreements with eBay to participate in Daily Deals and other promotional programs and with those deals, eBay will often subsidize part of the discount being offered.
The terms of those deals are often protected with non-disclosure agreements, so it's difficult to say exactly where funding for these discounts is coming from, but as CEO Jamie Iannone said in the Q3 earnings call, sellers "kind of" fund most of them - leaving plenty of wiggle room for partially subsidized deals.
...the only real couponing and promotion stuff we do, we do it in conjunction with our sellers, where they are kind of funding those coupons. And that does work, and that's in partnership with our sellers. We sometimes also do that with our external promotional listings products that we've been talking about, one of our new ad products.
But we really moved away from the couponing that was unhealthy that we did back in 2019. And we have no plans to reintroduce that type of couponing because it wasn't driving the type of ROI that we wanted...
Also as usual, there are multiple repeat, habitual fake strikethrough price offenders - making it clear that eBay is perfectly fine with enabling and facilitating these consumer harming bad business practices.
First up, we have the Dyson V8 Cordless Vacuum which supposedly has a list price of $469.99, currently marked down 6% to $439.99 and then eligible for an additional 20% with code PRESIDENT20 for a total of $351.99
However, checking the history on this listing shows not only has it not sold for the supposed list price of $469.99 in the last 4 months, it was in fact priced at $299.99 before the price was jacked up the same day this President's Day Sale launched.
Next up we have another repeat offender with the official Lenovo store offering this laptop with a theoretical list price of $1,499.99, marked down 45% to $829.99 and an additional 20% off with the coupon code for a final price of $663.99
Item purchase history shows it has not been sold at that fake list price previously and in fact was priced as low as $755.99 in December.
This isn't Lenovo's first rodeo and they should know better, as they have already been sued in a class action for trying to pull these same shenanigans on their direct website as well.
Lenovo is the latest brand to be sued in a class action about allegedly false strikethrough pricing and fake discounts.
— Rob Freund (@RobertFreundLaw) November 16, 2023
With BFCM right around the corner, it's important to get this stuff right. pic.twitter.com/twnUR9Ykem
And yet another habitual user of fake strikethroughs and false discounts, HP says this laptop has a list price of $919.99, marked down 14% to $787.49 and an additional 20% off for a total of $629.99
That means you can buy it today with discount for the exact same price you could have had it on February 12 without a discount before this supposed "sale" started. But wait there's more - you could have purchased the same laptop for only $379.99 back on January 8th!
As we've mentioned before, eBay's Chief Legal Officer, Marie Oh Huber, spent several years as Corporate Counsel at HP before joining eBay - apparently she still hasn't taken our previous advice to reach out to whoever occupies that role at HP today with a friendly reminder about the FTC's very clear guidance on misleading strikethrough pricing being considered a deceptive business practice.
This strikethrough price manipulation is nothing new on eBay of course - it is absolutely rampant on the platform and eBay has willingly turned a blind eye to it for years.
In fact, rather than taking action to combat these consumer harming business practices, eBay has actually made a concerted, intentional effort to mask and enable them by removing the link to sold history from the View Item page, making it harder to determine if the "deals" actually represent legitimate savings.
Liz Morton ~ Founder
eBay no longer links to the sales history directly, but it can still be found with a bit of a workaround - for now.
If you use the URL https://www.ebay.com/bin/purchaseHistory?item=xxxxx and replace the xs with the specific item number of the listing you want to view, you can still access the sold history, but you have to be logged in to an eBay account to see it.
In addition to the FTC guidelines about strikethrough pricing, eBay's corporate Business Ethics policy has a whole section on "avoiding conflicts of interest" and "acting with integrity" that would seem to apply here, not to mention the section about advertising honestly and not making false or misleading claims.
Marketing and advertising honestly
Every claim in our advertisements and marketing materials must be accurate, objective and verifiable.
This means that we must research and document our claims prior to publication. Laws governing comparative advertising, including pricing, vary from country to country, so it’s important to obtain guidance from Legal when making such claims to ensure that we comply with applicable laws.
Making false or misleading claims contradicts Our Beliefs. Legal can provide guidance if you are unsure whether something is false or misleading.
Their Code of Business Conduct and Ethics for Third Parties also makes it clear they expect companies with which they do business or have agreements to follow ethical guidelines as well.
Fair Business, Advertising, and Competition
Third Parties will comply with all applicable fair business, advertising, and competition laws, including fair trading and antitrust laws.
Unfortunately eBay has shown time and time again that they have very little interest in policing their platform when it comes to these shady business practices and consumers cannot rely on them to simply do the right thing.
The only thing that appears to get eBay's attention is regulatory enforcement, like in Australia where the company was forced to introduce a comparative pricing policy to curb these misleading strikethrough pricing claims.
Liz Morton ~ Founder
The policy applies to listings on eBay.com.au and covers all types of comparative pricing that a seller uses to establish the value of the discount to the buyer. This includes, but is not limited to, where a seller refers to:The recommended retail price (RRP) of an item to demonstrate a discounted current price; orIts own historical or previous pricing on or off eBay compared to the current price charged (including by using 'was/now' pricing or 'strike-through' pricing, or by specifying a particular dollar amount or percentage saving).
This policy also applies in circumstances where a seller provides eBay with the above information for the purposes of eBay displaying a discount on their item.
What's comparative pricing?
Comparative pricing refers to when a seller includes a recommended retail price or historical price for an item, and then makes a comparison to the current selling price. It can help a seller establish the value of the discount to buyers.
How do I prove a previous selling price?
Sellers should hold evidence (for example, receipts or detailed sales records) demonstrating that:The items were sold at the previous selling price; andThe previous selling price was offered for a reasonable period of time immediately prior to the product being advertised with comparative pricing using a previous selling price. What is a reasonable period of time may vary depending on the product and the frequency of price changes.
Other important notes:
To ensure that any comparative pricing representations are not false or misleading to consumers (or otherwise in contravention of the Australian Consumer Law), the seller further confirms the following:
In relation to the use of RRP:
The referenced pricing will be accurate and current throughout the entire duration of the listing;RRP will only be used in cases where the product has been previously offered and sold at that RRP for a reasonable period of time; andRRP will not be used for products that are only supplied by the seller;
In relation to the use of a previous selling price (including 'was/now' pricing, 'strike-through' pricing or by specifying a particular dollar amount or percentage saving):The item has been offered by the seller at the 'was' price for a reasonable period of time immediately prior to the item being advertised with 'was/now' pricing;The item price has not increased on eBay.com.au from the date that is 10 days prior to advertising a discount on the listing (such as when creating a promotion in Seller Hub or participating in eBay promotions), although you may lower the prices at your discretion;Comparisons will not be made with prices last offered more than 6 months ago (or if they are, the seller will highlight this clearly within the listing)
Consequences for violating the eBay Australia Comparative Pricing policy can be stiff:
eBay may, in appropriate circumstances and in accordance with the terms of the User Agreement, suspend or terminate a seller's account, or impose other consequences (such as removal of eBay Top Rated seller status at an account level) if you fail to provide substantiation, or if eBay or a regulatory body determines that the comparative price is false or otherwise misleading or deceptive.
It's clear that eBay absolutely can set policies and take action to make sure sellers are not manipulating strike through pricing and misleading buyers, but they simply choose not to do so unless their hands are forced by outside scrutiny or regulation.
It's disappointing to see that eBay and major brands with whom they partner continue to use these shady tactics, but unfortunately it seems as long as they are allowed to get away with it, consumers will continue to be harmed by these deceptive discount promotions.
Now that eBay has paid a historic $59 Million fine to the DEA to settle claims of illegal pill presses being sold on the site and a $3 Million penalty, plus 3 years of independent compliance monitoring, to settle criminal liability for the 2019 cyberstalking scandal, maybe Oh Huber and Chief Compliance and Risk Officer Ryan Jones will turn their attention to cleaning up these fake discounts before the FTC has to step in and force the issue.
Liz Morton
In the meantime, if you see fake discounts being presented as real deals, we highly recommend reporting the listing to eBay and filing a report with the FTC as well.
