Should Warranties Be Cancelled For Non Channel Authorized Sales?

How effective are policies like this?

Access provider Keri Systems warns endusers and non-dealers from buying gear on the internet and will 'void the Keri Systems Warranty' on those products.

Do policies like this work to protect the resell channel? Has a vendor ever denied you tech support or warranty on 'improperly purchased' items?


Cross-referencing the Buying Hikvision Chinese Versions Vs USA Ones discussion where the same issue was raised.

I'd also add a question:

Manufacturers - Have you ever denied support / replacement for a product that you determined was not an authorized channel purchase?

The manufacturer should be penalizing their dealer that made the Internet sale, not the consumer. Having your branded product out there and not supporting it during warranty is just plain stupid. Keep the customer happy and fire the dealer if necessary.The very small cost savings in not supporting the product is not worth the animosity and negative publicity created by this shortsighted policy.

I would certainly look unfavorably upon any manufacturer who treats their end-user customers this way.

Having your branded product out there and not supporting it during warranty is just plain stupid.

But is it stupid just to say you won't support a product if obtained thru an unauthorized channel, but then in the end provide the necessary support? After a mild haranguing, the manufacturer would make an 'exception' this time because the end-user was apparently unaware. The manufacturer would then obtain he serial/lot info and who the end-user purchased it from. The end-user would be instructed to use an authorized dealer to use from thenceforth on.

Let's take a look at the scorecard in this scenario:

  • The Customer is happy because he got a good deal and his warranty was honored.
  • The Internet dealer is happy because the customer is not bothering him for support anymore.
  • The Authorized dealer is happy because he believes that the manufacturer is protecting the channel, and he sees the occasional corporate referral that 'proves' it.
  • The Manufacturer is happy because he doesn't have to really shutdown gray market activities

There isn't really any negative publicity, because no one really gets upset about a authorized product only warranty policy until they actually try to use it and get denied.

So Win/Win/Win/Win. Of course that all changes if and when the Manufacturer gets greedy and allows the gray market sales to grow to the point where the disillusioned dealer drops the line.

The manufacturer should be penalizing their dealer that made the Internet sale, not the consumer.

Nice idea, but probably not that easy to do with online sellers like those found on eBay, AliExpress, etc., who are likely not getting the equipment through regular channels anyway, and will probably just disappear and set up again under a different name anyway.

Matt, I agree you can't stop everyone, especially if they are going to pop up again and again on eBay, etc.

However, the key is to stop the high volume unauthorized sellers and that manufacturers certainly can and should be going after.

Normally the overseas dealer would receive no income from the original manufacturer for customer repairs you make that in the profit margin on sales. Even parts replaced you still are paying the shipping.

Why should I as an importer help company's who want to compete using my advertising and good service warranty backup to make money.

Next how does the importer even know the product he is buying from China is even genuine or the model number he ordered it would be quite simple to re-label cameras and I have even witnessed a whole container of PTZ cameras being relabeled to get though customs to match CE testing reports of a Competitors camera. I also see people buying cameras without a clue in China with most specs consist of 700tvl Sony that's it most would end up online for sale claiming to be Sony. So many shops sell HIK in China I could almost be certain some are fake. There is a building in China selling boxes with whatever name you like printed on it and next door you can buy the warranty book and manuals.

I have no problem with the attitude buy from us or tough luck, they should then be given a standard lawyers letter and contact to take the mater up with the seller to obtain refund or cost of repairs support contract.

Michael, James, good points on both sides of the issue.

I'd add one aspect to this triangle and that's how rigorous the manufacturer is in policing / stopping unauthorized online sales.

That's the best way to stop this problem 'at its root'.

Otherwise you are left with the difficult decision to either punish an end user (who may have unknowingly bought unauthorized product) or punish the legitimate dealer (by supporting products sold by unauthorized ones).

"or punish the legitimate dealer "

You're forgetting that a big part of this problem is selling through distribution. The distributor will sometimes sell direct to end users, but the far more common case is that you get a "Dealer" who is really just 1 guy operating a website. He imports the electronic catalog from the distributor, marks everything up a flat 10 or 15%, and all orders are drop-shipped. That dealer has no store, no support staff, no hands-on with the product and so forth. Because they're not holding inventory or carrying most of the overhead of a real integrator, they can sell stuff cheap. End-users see these prices online, and look at the same item from their dealer is 15% more (outside of the cost of installation). So of course they get upset at the price from their security dealer, it looks like the dealer is trying to rip them off.

In the US at least there are laws regulating how you can handle things like price/price enforcement. The safest and easiest approach is to have a "no web sales" policy, for most larger manufacturers these random drop-shipped products don't amount to any real revenue, but they can amount to real headaches. Rather than try to implent and enforce a MAP policy or things like that, just call all these sales illegitimate and unsupported. That also gives your legit dealer a solid response to the customer, their price for the item is higher because there is a cost associated with maintaining an actual business. When/if the device needs to be serviced, how does the customer want to pay for that?

Thanks for explaining that scenario (1 guy operating a website buying through distribution), which I agree is common.

The counter I have seen to that is manufacturers tracking back such products and shutting down the operation proactively.

Let's say you have CrappyCCTV.com, who buys cameras from Anixter. The manufacturer of that camera can buy a camera from CrappyCCTV.com, check the serial ID / mac address and track that back to Anixter. The manufacturer can then order Anixter not to sell anymore to whomever is the person behind CrappyCCTV.com

I am saying that's a cleaner approach than either allowing it or punishing the often unknowing end user. Yes/no?

"The manufacturer of that camera can buy a camera from CrappyCCTV.com,"

This has been done more than once or twice. You can also send slightly different electronic price lists to each distributor (assuming you don't have large numbers) with product descriptions re-worded. Most of these websites just import the e-catalog word for word, so you can tell from the description of your product where the source is coming from.

Most distributors (the ones I've worked with) seem to honor requests to keep particular products out of certain e-catalogs, but it also seems like you need to re-remind them about once a year.

The optimal approach is to catch it upfront, yes. Google alerts is helpful for finding mentions of your products or part number strings on the Internet. Still, even with lots of creativity and diligence, so slip through. That's what makes the posted policy helpful.

I agree a posted policy is helpful. I think the combination of the two is ideal because it helps stop the problem 'at the source.'

"You can also send slightly different electronic price lists to each distributor (assuming you don't have large numbers) with product descriptions re-worded. Most of these websites just import the e-catalog word for word, so you can tell from the description of your product where the source is coming from."

You just solved a mystery for me. I have observed that even large-disty part numbers become part of rogue internet-disty part numbers.

Say a large national distributor adds "Q2" to every camera item number (ie: Q2-cam5000). I have noticed rogue internet distributor often lists the same part as "D8-Q2-cam5000". They keep the same unique identifier, apparently as an oversight.

Thanks for clearing that up!

Another of Dahua's exclamatory statements:

Dahua Technology only sells wholesale products through authorized distributors and has never sold Dahua products on any e-commerce website worldwide. Any purchasing of Dahua Product via an unauthorized source, including unauthorized distributor, website (includes but not limited to, see below) and etc. would not be acknowledged by Dahua Technology and warranted to receive any after-sale services or support from Dahua Technology. www.aliexpress.com www.ebay.com www.emimikos.gr www.dahua.gr Dahua Technology reserves the rights to lodge a claim against those who infringe its legal rights. Please contact Dahua Technology at overseas@dahutech.com should you have any questions.

John, with all the real Dahua product you have acquired, have you not tried to contact them directly for any support issue? Have you had no DOA's yet? Maybe they don't even have any English language support line? If they do I'm sure you have a legit question or two...

@James, in a case (unlike Dahua) where branded product is regionally sold both thru authorized and non-authorized channels, can the manufacturer tell just by the serial# that its unauthorized?

When we buy Dahua and seek support, our requests are handled differently than a regular end user, because they know we are publishing things, so they answer direct.

However, previous to establishing communication with them, we had no idea / ability to get any support as a regular customer. This, I believe, is the standard operating procedure in the US where they have sales / support, etc. managed by their OEM / re-labelers.

We have tech contacts at Dahua so we don't use their general support. We've had no DOAs or repairs required. They are also fully aware of where we've gotten Dahua product from and have never pointed out the sources as being unauthorized.


Some may slip though the net Cisco only found out that a factory was ruining a night shift on its products when the return rate doubled and sales dropped, One company lost its entire African market when they outsourced without protecting the embedded code.

It would be quite easy in the camera case paint shop to have the pad printer print products named for each market. The paint is baked on 400 degrees so hard to copy on the finished product. Serial number lasers for industrial marking & labeling are quite common in China so serial numbers could be overcome quite easy unless you made small font spacing changes.
On the other hand I have seen in China a German clothing brand has not been copied so they are unknown and do not sell many genuine products, is it worth encouraging people to copy?

Many industries have the same or similar language posted. It's common in consumer electronics and especially for "high end" audio/video equipment, cameras, sports equipment and even luxury clothing. Esoteric HiFi equipment manufacturers have some of the most stringent policies on so-called "grey market" products.

Here is a quote from Tamron, for example: "Tamron USA, Inc., or its authorized agents, will not repair any product that is not an officially imported product and sold through an authorized Tamron USA dealer. In other words, there will be no authorized repair service under any circumstance for grey market products. In such a case, the user must return the product to the dealer at which it was purchased for unauthorized repair service."

It seems like we have plenty of examples of companies warning that they will not support unauthorized sales, yet so far no reports, anecdotal or otherwise, about this actually being enforced.

Again, is it mainly just a bluff to appease the channel? It's certainly easy to see how even if the policy was originally implemented with a eye towards strict compliance, that this bluster might quickly erode when presented with real flesh-and-blood customers. The fact is that the authorized dealer has only limited and indirect visibility into these cases to know whether the enforcement is actually occurring.

The bluff is also towards people buying online. By warning them publicly, they will likely scare off a certain percentage of them. I doubt most will be dissuaded but some will...

Agreed, double-bluff. And in this particular case (Kent Systems), although it is addressed to the end-user, the bcc is the dealer, and it seems it was not really designed with customer guidance in mind, because:

We have over half of the statement glowingly giving the pitch for (and to) to the dealer:

Keri Systems products are sold through a network of installing dealers. In addition to being highly trained in security systems installation, they also provide a valuable service to the customer by being readily available to answer questions, provide support for hardware and software questions, or troubleshoot system problems. These services are often not available from an Internet-based seller.

But without any teeth it wouldn't mean much to the dealers, so we have:

Any sale of products by an unauthorized Internet-based seller voids Keri Systems Warranty on all products. Keri Systems believes that many Internet resellers do not fully disclose the risks associated with buying security products over the Internet. Please use caution when selecting your source for Keri Systems.

Which would be great if it weren't for the fact that there is no actionable guidance given.

Say I'm a customer reading this what would I think? Are all Internet based sales unwarranteed? No, only unauthorized ones. And though "many Internet Resellers do not fully disclose the risks", that implies that there are many who do. So general caution is advised. No list of unauthorized websites (like Dahua) or reseller names, no internal number to call to find out, no given way to tell waranteed product apart, etc. All consistent with a policy that is most likely, loosely enforced.

So what do you do? You ask the Internet Seller, "Is the warranty on this good?" :(

In reality, we do support all customers, but believe we need a statement to discourage purchases through the unauthorized internet channel where the goods may be used/damaged or unverified to be in working order, and to encourage customers to seek legitimate channels where the products are properly documented with their begin warranty date and are supported by qualified and experienced resellers. We would certainly welcome any help the readership can offer in recrafting the statement to be more customer-centric.

Dennis Geiszler

Vice President, Marketing

Keri Systems, Inc.

Thanks for chiming in, Dennis.

What actions, if any, can you take if you catch a 'rogue distributor' selling Keri over the internet?

Candidly, other than trying to plug the supply chain to the internet reseller or asking them to cease and desist, there is very little we can do from a legal standpoint based on restraint-of trade laws. Our best option is to inform prospective customers that it behooves them to make sure they are purchasing from an authorized source, hence the statement on our web site.

Can you estimate how much 'gray' product is being sold? Do you mainly get complaints from your authorized dealers regarding unauthorized sales, or do you usually find out from end-users?

Impossible to track, but probably not a lot. Nonetheless the low price internet offers disrupt our authorized channels and serve to undermine Keri's credibility. I assume this would be the same for other manufacturers of security products.

The position would vary being an American manufacturer the product is there own product if under warranty. If you are the authorised importer and trademark holder this is when you have a bigger problem with grey imports. I'm not sure of the law in America but certainly in Europe and Australia we can apply trademark law and have any grey imports of commercial quanity or for resale destroyed by customs at the importers cost if not authorized.