In a classic eBay move, just one day after the coupon expired, I received this marketing email saying my "discount has arrived" as the HP laptop is now on sale for $529.99....the exact price before or with the fake discount.
The new year is typically a time for reflection, resolutions to "do better" and turning over new leaves, but unfortunately when it comes to eBay coupons and discounts, the shady fake strikethrough pricing shenanigans continue.
This week, eBay is promoting an "extra" 20% off select tech, home and garden, fashion, refurbished items and more with code NEWYEARDEAL to kick off 2024.
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...
For example, this laptop sold directly by the official HP Inc. store on eBay claims you can "save $320 instantly" between the supposedly already marked down 22% price (from $849.99 to $662.49) and the "extra" 20% off coupon code, bringing the total down to $529.99.
However, the sales history for this item shows it was $499.99 in November, $519.99 through mid-December, and $529.99 for at least 2 weeks before this supposed sale launched.
In fact, you can clearly see HP jacked the price up to $662.49 on the same day as the coupon went live, making the price after applying the "extra" 20% off exactly the same as it had been before the discount was offered.
Side note: eBay's Chief Legal Officer, Marie Oh Huber, spent several years as Corporate Counsel at HP before joining eBay. Perhaps she should 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.
What about this Samsonite luggage set advertised at a 46% discount from supposed "list price" of $459.99 plus an "extra" 20% off, bring the total down to $199.99?
Once again we can see Samsonite also increased the price right before this coupon went live so the final price with the discount would be exactly the same as the price they were selling it for just hours before with no coupon needed.
This strikethrough price manipulation is nothing new on eBay of course - it is absolutely rampant on the platform and eBay willingly turns a blind eye.
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.
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 shady business practices such as this 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.
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; or
- Its 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; and
- The 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; and
- RRP 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.
If you see fake discounts being presented on eBay or anywhere else, here's how you can report it to the FTC:
Do you trust that you are getting a fair deal when you shop on eBay? Let us know in the comments below!