Gray market goods refer to legal goods which are sold outside normal distribution channels by companies which may have no relationship with the producer of the goods. Say someone makes a trip outside the country and sees a product being sold for a cheaper price than in the U.S.
That person might buy up a bunch of that product and sell it online at a profit. Gray market products aren’t illegal–but there is a catch: They might not have a warranty or be eligible for repairs or other services from the company that produced them.
I got to find out what gray market was years ago while working at a business that relied on nice, expensive camera equipment. Taking one camera in for repairs, we learned that the company wouldn’t repair it because it was a gray market item. Someone had found it online for a good price years before, but it was intended for sale in another country.
Because of that, we ended up having to buy an expensive lens, followed by an expensive camera–instead of paying for what could have been an inexpensive repair job. In the long run, the “deal” ended up costing us more money.
Your BBB offers the following advice for consumers who want to avoid purchasing gray market items:
- Check to see if the price is unrealistically low. While there are good deals to be found online, beware of a brand name product that is being sold at significantly below the manufacturer’s price.
- Carefully inspect the merchandise. Make sure it is in working order. Gray market goods may not be factory-fresh, having gone through the hands of several third parties. Check to see whether the manual and other printed material is in English.
- Ask about repairs. Gray market merchandise will most likely not be eligible for repair at a manufacturer’s authorized service center. Ask where service will be done and whether repairs will be performed according to the manufacturer’s specifications
- Use a credit card. A credit card allows you to dispute charges for a purchase of gray market merchandise that was misrepresented at the time of sale.