eBay Has A Serious 'Price Jacking' Problem

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Allphones's eBay store is currently selling the Samsung Galaxy Note 9 for 20% off. Sounds great, right? There's only one problem: the pre-sale price is listed as $1619.99 - a whopping $120.99 markup on the actual RRP.

When the Samsung Galaxy Note 9 launched in August, we advised bargain hunters to forget about scoring a significant discount for at least a few months. Turns out we were wrong - but only if you count merchants who artificially increase prices.

Allphones is currently selling the 128GB Samsung Galaxy Note 9 for $1295.99 which it claims is a 20% discount on the RRP. However, Allphones' list price is an eyebrow-raising $1619.99. Something clearly doesn't add up here.

From the first day of launch, the Samsung Galaxy Note 9 has cost $1499 to buy outright in Australia. Allphones is using Australian stock and the deal doesn't come bundled with any extras - so there's literally no reason for this markup.

The above "deal" is one of the worst examples of artificial price inflation we've encountered. While it is common for merchants to cynically advertise the launch price on old products, this is the first time we've seen a current-gen phone priced higher than the RRP.

This is an ongoing problem for Amazon and eBay and it's all down to unscrupulous third-party sellers. There are laws against this sort of thing, but they're difficult to enforce, sadly.

With all that said, the AllPhones deal still isn't terrible - in reality you're saving around $170 which is nothing to sniff at. It's just unfortunate that the company chose to beef up the "RRP" to make the deal look better than it actually is. (To get the deal, click here and use the discount code 'PIXEL' at checkout.)

We've reached out to eBay for comment but have yet to hear back. We'll update the article if we learn more.

Update: eBay provided us with the following statement:

ebay.com.au is Australia’s largest online marketplace with 1.1 billion listings and 40,000 Australian retailers on the platform. As with any marketplace, sellers have the freedom to set their own pricing based on their individual business needs.

Our Best Price Guarantee ensures Aussies get the best price on new products on ebay.com.au. If Aussie shoppers do manage to find a cheaper price on another site, we’ll not just match the price, we’ll beat it, by offering a voucher for the price difference plus an extra 5%.

As we said, this is a problem with third-party sellers rather than the marketplace itself. Nevertheless, it definitely pays to do some research before splurging on a hardware deal - sometimes the savings look too good to be true for a reason.

Is It Legal To Inflate 'Original' Prices During A Sale?

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If you can't afford to buy the Samsung Galaxy Note 9 outright, a mobile contract is the only way to grab one while it's still new and shiny. You can find additional info on each plan here.

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Rapid Review: Samsung Galaxy Note 9

The Galaxy Note series is the quintessential stylus-equipped smartphone. This time around, Samsung has significantly enhanced the S Pen via Bluetooth functionality. It also boasts an improved camera, more RAM and a bigger battery than its 2017 predecessor. But is it worth the eye-watering starting price of $1499? Let's find out.

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Comments

    This seriously happens every time there are discounts on eBay. Sometimes it's reverting from "street price" to RRP before the discount, and sometimes it's just jacking the prices. Either way, the actual discount you get is often less that the headline.

      This is the first time I've noticed a pre-sale price that's actually higher than the launch RRP. Pretty blatant.

        I've been watching AMD Ryzen 2xxx CPUs and they've been doing it on and off since launch. Apparently their prices vary by as much as $300 from week to week. At least if you trust some of the ebay sellers. Meanwhile prices in reputable shops haven't budged since release. So yeah they're often blatantly above the RRP.

        The sellers that really bug me are the ones who put a big "20% off sticker" on the product image. But when you put in the discount code they're actually only knocking off 5 or 10% and claiming that the rest of the discount is already in the item price. So if everyone is selling at $500 with a 10% discount sticker the effective price is $450. But you assume theirs is $400 so you click their link only to discover it's $500 like everyone else.

        I'm a bit disappointed in the "form letter" reply from Ebay. I get it that it's not actually them doing the gouging, it's resellers on the platform. However, considering that behaviour is illegal you'd think they'd take a stand on it. I wonder whether there is a loophole in the law that means only the reseller not the platform (ebay/amazon) can be fined by the Govt? That might explain why they apparently don't give a damn.

      Agreed. Price jacking happens just about every time eBay have a % off sale with code, which seems to be every other week at this point.

      AFAIK most of the discount codes are paid for partially by the business and partially by eBay/PayPal so it's understandable (but a bit grey) that businesses jack the prices to save their own margins.

        I don't see how it's understandable? They don't have to be part of a sale, it's not being forced on them. They can even choose to be in the sale but not all their items. Therefore items that don't have high enough margins, just don't put them on "sale" if you're just going to price jack anyway. If any other business inflates prices it is an illegal practice and I don't think that just because a business chooses to use eBay as a marketplace that they should be exempt.

          It's understandable (but not right) because most people who look at the items look at a combination of price and discount "sticker". Since unfortunately ebay still doesn't sort by end price it can be tough working out what you're actually going to pay. So by putting a high discount "sticker" on the items they capture people who aren't aware of the usual price, or are poor at math. It's basically a psychological ploy to gain sales.

    I refuse to buy from them. I rather pay more that pay these fake price jacking lunatics

    These eBay pricejacking promotions have been going on for quite some time. It is a disgusting, dirty business tactic and anybody tat engages or promotes it should be fined. Its sad because 99% of the public don't know any better (because they dont know the RRP) and the ACCC won't do anything. Glad to see eBay trying to blame the seller even though its eBay that is running the promotion. Dodgy, dodgy, dodgy.

      Except the sellers are the ones jacking up prices

    Lately this price jacking business strategy has been relentlessly promoted on Facebook ads and OzBargain. Its the new clickbait of marketing.

    Have you seen the fees eBay charges though? I'm not excusing the behaviour, just saying that the marketplace is set up in a way that almost encourages this behaviour.

    As an addendum to the article, there are an awful lot of eBay sellers that sell stock they don't actually have at a seemingly reduced price. When they get enough sales they then order the stock from overseas and send it sometimes as much as a month or two late. They really need to clean this shit up, or Amazon is going to eat them sooner or later.

    Don't worry everyone. The ACCC will sort this out!!!

      If we all started actually reporting (to the ACCC and the respective fair trading) , just one or two items that we have seen with inflated pricing, then action will be taken. But they need to know:
      1. That it's happening in the first place.
      2. That it's impacting consumers.
      3. An evidence base to work from.

      I've certainly seen it, I've read about it constantly on OzBargain, but this is the first time I've seen it as a published article from a media outlet - good work LH for calling this out. Please also consider informing appropriate authorities.

        It'd be worth setting up a tracker to monitor the price on a few items to gather the information. But it'd be bloody difficult because of the very nature of ebay as a site. It's much harder to scrape that info than it would be off somewhere like Umart.

    This reminds me of the junk mail I was getting from The Good Guys a few years back. Except they were just listing stock, not even discounting it. They'd have the full price with a "Pay Less, Pay Cash" label on it. Only the full price was WAY over RRP. They were inviting you to come into the store and negotiate your way down to RRP! I guess it left the door open for having a future sale and stating a big reduction on their previously advertised prices... Not sure if they still do this in their catalogues, I stopped reading once I realised the prices were all BS.

    "Allphones store"?

    Um, Allphones went bankrupt a couple of years ago and a search of eBay Australia's store directory for "allphones" reveals not a single result...

    Where are you getting this information from? The American version eBay?

      Disregard my previous comment - apparently eBay's "stores" search engine is case-sensitive... Because that makes sense.

    It certainly doesn't help that OzBargain endorses and encourages price jacking. eBay has been having 20% off sales non stop lately, yet nothing is actually 20% off. You can go into the items sale history, and you'll see how much less it has sold for recently and you can compare it to the current inflated price. They will then lower it back to normal after the sale ends. I wonder if there is an online loophole that lets eBay do this? Can you imagine the reaction from the public if Harvey Norman or JB HiFi temporarily raised prices and had a sale and then claimed they were having 20% off, when in reality it was far less?

      OzBargain does not endorse or encourage price jacking. I would argue that most of the members actively call it out.

      Some sellers on ebay do infact discount off their previous advertised price. Peter's of Kensington is one example, they're eBay price is the same at their online store. When they are part of a promotion on eBay, their eBay price is genuinely cheaper than their own store.

      Making such emotionally charged, false claims and generalisations does not help the cause of the consumer. Accuracy and actual data does.

        Pricejacking is not called out enough and is often defended.

        If eBay claims they are have a 20% off sale with sellers, than all sellers should be having 20% off. Not just a select few.

        Pricejacking is dishonest and misleading to the consumer.

    My major gripe with Ebay these days is this new feature/ trend where sellers can list multiple items under the one listing, and so of course sneaky sellers always include a $1 unrelated item in the listing so all of a sudden that "Awesome new whizz bang gadget" you've been eye'ing off in search results view *appears* to be bargain $1 and you get all excited.

    There goes sorting by price 'low to high'. Ive started having to set a minimum price cut off to filter out these slimey ebay sellers and get no bs only results. Silly really. Ebay just keeps changing the rules always in favour of the 'worst offender' sellers. Like the chinese crapware merchants passing off dumped stocks as top quality, only to close up shop when warranty claims/feedback stack against them, only to start fresh with new name next season, whilst retaining their +ve feedback from previous account by way of ebay's 'premium seller account migration tools'.

    As someone who sells on eBay I can bring some insight.
    Currently our fees through eBay, including the use of Paypal (which is essentially a must) means that the item has approximately 9% fees attached. So you need to make over 9% to turn a profit with some areas (like computers and tech in my case) having very low margins.

    eBay INCREASE their fees during specific seller sales, excluding the ones that occur as a general eBay sale. The only time we were a part of a 20% off sale featuring a few stores, our fees were in the double digits (like 15% or 18%, can't remember exactly it was quite a while ago. It was basically our standard fee + another fee for being in on the sale).

    In the case of most highly competitive products, this is well and truly under margin. The real kicker is that unless you compete through the sale, generally your products are pushed back in results due to the vendors on sale getting higher ranking. In either case, the real losers are in fact the sellers, unless you have got incredibly high margins.

    Another thing is that for up to a week prior to a sale, you are not allowed to alter your prices, which means that you have to risk the higher price for a week with little to no sales, in hopes that the discount will allow you to make gains.

    While I don't agree with price jacking and don't endorse it, I can certainly understand why it happens in a cut throat marketplace.

    Last edited 08/09/18 8:50 am

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