The Robb Report

Does a buyer have an ethical duty to inform a seller of a mistake which causes the product to be vastly underpriced?

The backstory

So here I am in law school, and I’m thinking that my tired-out backpack is not cutting it any more. I’d really like to have something a little more respectable. And so I quickly find myself submerged in the world of super-expensive (to me, at least) briefcases and laptop bags. I.e., $250 and up.

I tried as hard as I could to find one made locally, but could not.  So I check Ebay, and see that a lot of the bags can be had for 30% or so off, via the auctions. But wait! There’s one seller who’s offering a new $300 briefcase for $75 as a “Buy it Now” purchase.

Digging into the facts

How is this possible? Why would she sell a bag for such a low price when she could get much more for it? This seller has a nearly perfect rating, and many sales. I rule out fraud on her part.

I look into her selling history and see that she has posted this particular briefcase repeatedly in the recent past without success. Over the period of a month, she had been re-listing the item and gradually lowering the price down to the $75 at which I found it.

And then I see her problem: She had been listing this Coach briefcase as a Coach’s briefcase. I quickly tested Ebay’s search feature and saw that her ad does not appear if a potential buyer simply searches for Coach. I surmised that by mis-listing the item, she had greatly reduced the number of potential buyers, forcing her to lower the price.

I bought the briefcase.

Wondering about the ethics

I had some concerns even before I bought the item. If this low was price due was due to a mistake on her part—would it be right of me to “take advantage” of that?

And now that I’ve purchased the item; wouldn’t the right thing to do be to let her know about the problem with her listings?

Or, maybe not? This is a “market”, after all. Isn’t it exactly these kinds of inefficiencies and differing skills of participants that, in fact, makes the market function, and is how people make a profit? I’m convinced I could buy these briefcases from from her and simply re-list them on Ebay for twice the price and sell them instantly.

I thought of one thing that mitigates my sense of wrongdoing. This is all theory on my part; I think I know why her prices are low. I think I could re-sell them at twice what I paid. But I could be very wrong.

Today I see that she’s put up another briefcase for sale. Same type as the one I bought, mis-listed in the same way, but this time black instead of brown, and at a very low price. I think to myself, “now that would be nice to have!”