September 20, 2017

Conducting Product Buys As Part of a Successful Investigation Strategy


This is the final article in a three-part series regarding investigating third-party online sellers. The first article, “Investigation Basics: Uncovering Third-Party Online Sellers,” appeared as a guest blog post on the Wiser Solutions blog.

Part two, “Researching Marketplace Review Websites, Social Media” appeared on this blog early this month.

One of the most valuable tools for investigating the identities of unauthorized online sellers is product buys. As the name implies, this involves purchasing a product with the goal of obtaining identifying information.

The easiest way to obtain information is by way of a return address on a package, or possibly a paper insert in the package that might include either an address or the seller’s name or company name.

Product buys of this nature can be very beneficial, so long as the marketplaces are not fulfilling the orders. When the marketplace fulfills the order, there is not a return address pointing back to the seller.

If you reach an apparent dead end, consider running the storefront/username in the search results, as discussed in the second post in this series.

Whether an online seller is listing one of your company’s products or many of them, it does not matter what you choose to purchase. In fact, simply buying the cheapest product that the particular seller lists online should do the trick.

Another option to consider when the marketplace fulfills the order is to request a product return. In this scenario, the seller might contact you with the return shipping details or with their contact information. This can get the investigation back on track.

A properly crafted set of policies might also enable your legal counsel to have grounds to subpoena the marketplace to obtain seller information

If you obtain what appears to be a legitimate return address, it is important to try to use that information to confirm the seller’s identity. For example, you might insert the address through internal databases and determine if the seller and/or contact information matches up with any information on file.

On eBay, a product purchase will ordinarily yield a return address, plus the seller’s PayPal username and PayPal email address. The product purchaser might also make a PIA request, short for personal information acquisition.

After a seller ships the product, the party who purchased the product can make this request on eBay and obtain additional PayPal information – namely a name, email address, phone number and city/state.

Because the seller provides that information to eBay, it will be reliable. But there is no guarantee that the seller did not provide false information.

The tradeoff for getting access to this identifying information is that the seller gets notified of the request and can get access to your information. It may be helpful to review the personal information you will be sharing with the seller.

So when would you want to utilize the PIA request? For starters, when you do not have time to wait for the purchased product to arrive and you need the identifying information quickly.

Also, a PIA request makes sense where a shipped product contains a fake or otherwise unhelpful return address (i.e., the seller is hiding his or her identity).

Product buys to verify products, adherence to quality controls

You can also utilize product buys for reasons other than identifying sellers.

For example, say a manufacturer—as part of its quality procedures —prohibits the sale of expired products. If a manufacturer believes a seller is selling expired products, the manufacturer could purchase its own products from an online seller and check the expiration dates on the products.

Should the manufacturer determine, from product purchases, that any of the sellers are listing and selling expired products, this could give rise to a trademark infringement claim against those sellers.

Moreover, many manufacturers help control distribution by the use of serial numbers or lot numbers on products. Thus, if a manufacturer suspects people are diverting its products and selling them outside authorized channels, it can purchase the products and use the numbers or codes to try to trace the products back to the authorized sellers.

For more information regarding these and other investigation tactics or how to draft your agreements and policies so that your enforcement efforts are most effective, contact us for a free consultation.