Dean Harrison, a Brisbane-based manufacturing jeweller, would browse eBay for second hand tools and other hard-to-get jewellery equipment. He even had “some great success” finding items of use for his jewellery design business.
That was until last week when eBay closed his account without warning.
The reason? Well, as far as Harrison can tell it’s because he notified eBay that some of its sellers were posting diamond engagement rings with valuation certificates clearly stating prices. He’s not sure because he’s still waiting for eBay to reply to his request for an explanation about why his account was closed.
“I was on eBay and I thought, just out of interest, I would check out the engagement rings section because I hadn’t really done that before. That’s when I noticed someone selling an engagement ring for a certain amount and then showing a valuation price with it, along with the description of the ring. Then the ad had a “buy now” or “bid now” price well below that figure,” said Harrison.
That can be a breach of the new Australian Consumer Law (ACL) which came into effect 1 January 2011 and has replaced the Trade Practices Act. Section 18 of the ACL deals with deceptive or misleading conduct and it is this section of the Act on which Harrison believes some eBay sellers may be walking a fine line.
Fair trade for consumers
Australian businesses, including jewellery retailers, continue to fall foul of the Australian Competition and Consumer Commission (ACCC), the government authority mandated to promote competition and fair trade in the market place to benefit consumers.
In August Zamels Jewellers was found guilty of misrepresenting savings to consumers when it promoted products on sale in its catalogues, and Harrison says he has tried to stay abreast of current laws.
“Some time ago in Brisbane I went along to a meeting with the ACCC, the National Council of Jewellery Valuers and an independent lawyer,” said Harrison, a jeweller for 27 years.
“We were told by the ACCC that you can’t advertise a ring, new or second hand, with a valuation price. You can show or describe the details of a certificate for verification but you can’t show monetary values of the valuation price to attract a sale.
“It comes under a term called ‘bait sale’ because it infers it’s a great bargain and may encourage a sale that might not otherwise happen,” Harrison said.
While the law can be complex, essentially it states that businesses cannot advertise or imply a saving to the consumer unless the saving is real and by using a valuation certificate showing a much higher price than the selling price it could imply to the consumer they were getting a bargain.
Nationwide Jewellers managing director and JAA board member Colin Pocklington says, “As far as I know the courts or the ACCC have not said that discounting off valuations is illegal; however, the JAA Industry Code of Practice prohibits this practice and, as a result of the
Zamels case, the ACCC may now come to the same view. In addition, the JAA Code specifically prohibits the use of a valuation price as the higher price in two-price advertising.”
Clause 6.2 of the Code states, “all signatories shall not use or refer to any valuation value in conjunction with Comparative-Price Advertising.”
Harrison is right in his belief that a seller cannot imply savings if they do not exist and Pocklington adds, “Using a valuation price to infer a saving against the reduced or discounted price may be risky given the judge in the recent Zamels case in made it clear that an implied saving had to be real.”
Harrison explained that on seeing many eBay sellers promoting jewellery using valuation certificates, he contacted eBay management on 4 December along with a number of eBay jewellery sellers.
But instead of getting a response from eBay about the issue, he got shut down … that same night!
He said his email to the traders and to eBay was straightforward and non-threatening.
“I never threatened anyone with prosecution, I didn’t use offensive language or anything like that.
“All I wrote was: ‘Please note under ACCC laws in Australia it prohibits the display of valuation prices for selling. Please contact these organisations for more information: ACCC, JAA, National Council of Jewellery Valuers’.”
“My main motivation was just to make people aware. Even some [traditional] stores aren’t aware they are breaking the law and consumers don’t know either,” Harrison said.
If the traditional jewellery stores can’t use valuation certificates to sell jewellery, then Harrison says eBay retailers shouldn’t be able to do it either.
eBay T&Cs
eBay’s terms of trade stipulate that all sellers must comply with any local laws.
“I think that if eBay acknowledges the local laws, and it does mention sticking to the rules set out by the ACCC, then they should stand by them.
“I have no issue with eBay or with people using eBay to sell jewellery. I just want them to comply as we have to. I’m not sure who, if anyone, has complained because I haven’t had any correspondence.”
At the time of publication, eBay had not replied to Harrison’s request for an explanation about his account being closed.