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Target Bans Resellers after Last Month’s Lilly Pulitzer Incident

A month after facing criticism over its handling of a designer collaboration, Target has apparently handed down a directive regarding resellers. It’s the latest retailer to crack down on eBay and Amazon sellers who use retail stores to source inventory in what’s known as retail arbitrage.

On April 19th, the retailer launched “Lilly Pulitzer for Target,” a collection of 250 items across apparel, shoes and accessories. But Target found its website overwhelmed with traffic, and shoppers were disappointed when the website and retail stores quickly sold out of the items.

There was a backlash against resellers who listed the special branded items for sale on eBay and elsewhere at tremendous markups – the hashtag #LillyforTarget turned to #LillyforeBay and #LillyGate2015.

Now Target is banning resellers, say EcommerceBytes readers and according to reports across the web. One reader who spent over $100,000 at Target over the past year said Target cancelled his latest online order. When he called the company, “they told me that they are no longer selling to resellers and the fact that I have ordered a very large amount did not matter,” he said. A customer service representative directed him to read Target’s terms and conditions online.

On an independent website that’s a gathering place for Target employees, users discussed a new directive that they say came down from corporate on May 12. “We no longer accept reseller tax exempt IDs and we are no longer to sell them to known resellers or those with lots of discounts,” wrote one poster. “The issue is, Target sells that stuff at a loss to get guests in the store to buy other stuff. Instead of a guest coming in and buying an iPad at a loss and then buying another $75 worth of clothing or whatever, we end up with a loss leader that isn’t leading to any other sales.”

Two months ago, resellers reported a similar problem with Kohl’s, another retail chainstore.

While some say it’s the disruptive behavior on the part of resellers when shopping in stores that leads to such bans, such as the 2007 reports about Pottery Ban, Target is also banning resellers from shopping on their websites as well.

Target.com’s Terms and Conditions includes a paragraph addressing resellers:

Target does not offer additional discounts on large orders of a single item or on large orders of many individual items. In addition, we reserve the right to limit quantities on orders placed by the same account, on orders placed by the same credit card, and on orders that use the same billing or shipping address. We will notify you if such limits are applied. Target reserves the right to prohibit purchases of any merchandise to resellers. Resellers are defined as a company or an individual that purchases goods with the intention of selling them rather than using them.

Several inquiries to Target went unanswered.

Update: Target responded after publication, see Monday’s Newsflash article.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.