Buying from the Internet or Gray Market

One of the biggest problems as a consumer is that buying items through authorized channels is usually expensive. In the case of electronic equipment such as mobile phones or cameras, the difference can be as much as PhP 11,000 or more. In many cases, more means as high as 30 percent in savings can be made in the gray market.

One of the reasons why gray market stores on the internet are able to offer bargain-level prices is that they only offer a warranty on labor and not on parts.

When Things Go Right

Fortunately, many of the gray market products pass through the same strict quality control processes as authorized-seller items do. And thanks to this, buyers are willing to gamble at saving as much as 30 percent from gray market sellers.

I recall a conversation between a salesgirl and a gentleman buying a digital camera a few weeks ago. When I came in the store, she was in the process of explaining the terms to the gentlemen, making sure to repeat the arrangement thrice. It was only after getting confirmation that the customer understood and accepted the terms and conditions that she finally sold him a gray market camera for PhP 20,000.

Having saved as much as PhP 15,000, the gentleman went home with a huge smile on his face. And if the reputation of that camera brand holds true, he can expect at least five years’ worth of use from it.

When Things Go Wrong

For some funny reason, I’m not lucky at buying second hand equipment or stuff from gray market stores. I remember quite a number of times when I would purchase something in tip-top condition with some friends at the same store, only to end up being the only person with the bad item.

So even if going through authorized channels can be extremely expensive, I reluctantly choose this route because it comes out cheaper in the end for me.

Throughout my lifetime, I have had my share of buying second hand cars. And while I won’t claim to have the knowledge of a mechanic, I still end up buying lemons. It doesn’t matter if I take my brother, who has a keen eye and passion for cars. It also doesn’t matter if I take my brother’s decades-long trusted mechanic with us. Nor does it matter if I send the car through the casa, or shop. For some funny reason, I always end up buying that lemon. The defect may not appear immediately, but it always comes out at some point in my ownership.

Apart from my bad luck, I also have other reasons why I refuse to buy anything on the internet or gray market sellers in this country, namely:

No Location

One problem is that buying off the internet hasn’t improved the sales landscape. On the contrary, it has actually made things worse because gray market sellers do not have a physical store anymore. So if that phone of camera breaks down, sending it back for repair can be futile.

This is the problem a friend of mine had when he bought his waterproof camera online. Instead of going to a physical store, they met up at a mall. After testing the waterproof camera and paying the salesman, he walked home with it.

Then it conked out two months later at the beach because water leaked through the seals.

When he tried to contact the internet seller, it was impossible. His efforts at calls and texts were futile; the guy seemed to disappear from the face of the earth. And since there was no physical store to return his waterproof camera to, he never got it repaired. He wrote off PhP 19,000, representing the price of the waterproof camera, and another PhP 3,000 for his memory card.

No Warranty

I will be the first to admit that the level of quality control of major name brands is very good. I rarely hear about phones or cameras that conk out due to manufacturing defects.

But that doesn’t mean bad batches don’t get out. Even the top car, appliance, and electronic manufacturers do end up putting out a bad model.

This is the problem a co-worker of mine had when a smart phone he purchased four months ago. Presented with saving PhP 7,000, he chose to buy the model of a popular brand off the internet instead of an authorized seller.

After the so-called technical team of the internet seller examined his PhP 26,000 phone, he was now being charged PhP 16,000 to replace defective parts, when it should’ve been free.

No Assurance

I have no doubt that there are a lot of good technical people in the country. So it may be possible for the so-called technical team of a gray market seller to correctly evaluate the problem of a phone effectively.

My primary problem is actually trust.

I have heard of stories about casa, or repair shops of car dealers, switching car parts or overcharging their customers. And if these legitimate companies can cheat their customers, it isn’t far-fetched for gray-market technical teams to do the same.

They could be swapping parts and just claiming that a phone or camera exhibits more defects that it has. We’ll never really know.

Getting back to technical capability, while it is possible that gray market people can understand electronic layouts, doesn’t mean they were trained specifically for today’s integrated circuits.

So this secondary problem still bothers me.

In the case of my co-worker, we have absolutely no idea if the phone had merely a software problem, a more serious factory defect, or sustained damage at the hands of the technical team. We just have to take their word for it.

Final Thoughts

I am both angry and sad about the predicament of my friend and co-worker. I am angry because there is a law stating that sellers should cover any factory defects for six months. The options are to repair the item at no cost to the buyer, to replace the item with the same model at no cost to the buyer, or to return the money if either of the first two cannot be done.

Angry

Unfortunately, internet and other gray market stores don’t seem to follow this law. They get away with saying that only labor, and not parts, will be covered. And since it seems nothing is being done about this, consumers end up being punished.

Some may say that it is the fault of consumers because they choose to gamble by going with internet or gray market sellers. But let’s be realistic, consumers will always be attracted to lesser costs. And when the price difference is PhP 7,000 and above, one really can’t blame them.

This is a situation where the responsibility is actually bared by more than just the consumer. It is the fault of internet or gray market sellers because they do not follow the consumer protection law. It is the fault of government because it is not implementing the consumer protection law. It is also the fault of authorized sellers because their prices are just too much, especially when it is a lot lower in neighboring countries.

If the price difference between authorized channels and the gray market were much smaller, I would like to think that consumers would consider buying the authorized ones. But with today’s price differences, that isn’t going to happen.

Sad

Finally, I am sad because I told my friend and co-worker about the dangers of buying from the gray market but it fell on deaf ears. My friend didn’t just lose PhP 22,000 because of a defective camera, nor did my co-worker lose PhP 26,000 for his defective phone. The amount is actually much more because a replacement now has to be purchased.

To be fair, some of the online sellers I have come across abroad have better terms when it comes to returning and repairing defective items. But until the companies here have the same consumer-friendly practices, I won’t be dealing with them.