Small businesses say they feel mistreated by chainstores including Target, Kohl's, and Sephora. That's because the chainstores have been prohibiting resellers from making purchases on their websites and in their brick-and-mortar stores.
It's not just online sellers who are upset - we heard from one reader who had been using such purchases to help stock his brick-and-mortar retail store.
On Thursday, we noted that Target
was 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.
Target responded to our inquiry after the article was published, explaining that while it had an existing policy allowing it to limit quantities on orders, it had recently established a new policy that gave it the right to prohibit purchases to resellers. (See today's Newsflash
Kohl's had similarly cracked down on resellers as we reported in March
We've received letters from sellers who are upset at these new policies. One reader said he had shopped with Target for over 10 years. "They have provided my small variety store with a number of different items and my last statement with them is for more than five-thousand dollars," he said.
"The "excuse" I have read for Target concerning resellers and this new policy does not seem to make sense. If they offered a "loss leader" that was so much of a concern then why not put a LIMIT on units sold! Why turn away every reseller's business if you suffered a loss from a "loss leader" when it would have been so easy to control that situation!"
He pointed out that stores such as Walmart, Sam's Club, Costco, BJ Wholesale welcome "mom & pop" traffic. "Small businesses, restaurant owners,...they all visit these stores for bulk purchases and many use their resale numbers."
Another reader said she was cut-off from purchasing from Sephora.com last year after having spent thousands of dollars both to resell on eBay, Amazon, and her own website, and for her own personal use.
In its Terms under Product Information, Sephora states:
Given the popularity of our products, and except where prohibited by law, Sephora may limit the number available for purchase, so that as many clients as possible may enjoy our merchandise. Specifically, and due to high demand, clients may be limited to the purchase of 3 Fresh, 3 Chanel, and 3 Make Up For Ever branded items per sku per transaction.
The retailer cited the section called Fraud Protection Program in its email to her, which she found upsetting. "I should have hired an attorney and may still as I feel that I was slandered," she said. "For goodness sakes, I was not selling drugs or anything else that was illegal but that is the way they made it sound. I did nothing wrong."
How should retailers strike the right balance when it comes to resellers? Should they stick to limiting the number of items on "loss leaders" or special promotional items as a way to ensure all customers have a shot at purchasing the items?
Should they prohibit resellers from using scanners to check prices in a disruptive manner (see the video
of a reseller filming the shelves of Kohl's).
A reader explained in a recent blog post: "I think part of the problem is some sellers buy at extreme discount and then expect the retailer to accept the return when the eBay seller can't sell it. Several store managers here know I buy for eBay (some even call me when they're about to do a major markdown), but they also know I don't return what I can't sell."
So should retailers limit returns on items purchased by resellers?
Or should retail chainstores simply ban all resellers from their stores and websites, which seems to be the current trend?