I knew something was wrong with the deal, but I wasn't quite sure what. And to be honest, part of me didn't really want to know. I just wanted the sale to work — and quickly.
A while back, I was shopping for a video camera for my office. Strapped with a $2,500 budget, I searched for creative ways to get the $3,000 model I really wanted. Just as I was about to give up, I found a website that promised the same exact model for $2,499. Could it really be true? What's wrong with it?
I decided it was worth the risk and plunked down the credit card, feeling smug about my savings. Three weeks later when the camera hadn't arrived, guess who was in a mild panic? Did I really lose $2,500 trying to save $500?
That's the seduction of gray market cameras. The deals promise brand new cameras at hundreds of dollars less than you know they should cost.
Are gray market cameras too good to be true? What's really wrong with them?
Listen to the podcast
What are gray market cameras?
Black market cameras are illegal or stolen goods. They are clearly fraud.
White market cameras refer to legal cameras purchased at retail or online stores.
Gray market cameras fall somewhere in between — not quite illegal but not exactly what the manufacturer intended to sell.
The gray area results because the cameras are imported by someone who is not an authorized distributor or agent.
Major camera manufacturers usually have an authorized representative in the United States. That entity is responsible for importing products to the U.S. and providing customer support for buyers in the country.
For instance, Canon has Canon USA and Nikon Corporation works through Nikon Inc.
When you purchase a gray market camera, you circumvent those entities and purchase direct from an international source.
Here's the risk. Gray market cameras have no factory warranty and receive no customer support from the legitimate importer. That means if you get a sweet deal on a Canon 5D Mark III, you better hope you don't ever need service from Canon USA.
Canon USA, like most legitimate importers, won't support a camera that cut them out of the deal.
Isn't it legal?
Technically there is no law stopping anyone else from importing goods without going through the manufacturer's representative. Is it ethical? As long as the retailer identifies the camera as a direct import and informs the customer of the associated risks, it is considered a legal and ethical sale. You make an informed decision. Buyer beware.
The problem occurs when a retailer doesn't flag the camera as imported and not eligible for a US warranty and customer support.
This happens more frequently than you think. Many New York City retailers have earned the reputation for selling imported cameras without alerting customers to the risks. They instead use word play like promising "U.S.A. Warranties".
The term U.S.A. Warranties is technically true. The retailer will usually offer a third-party warranty or a store warranty. And since they are in the United States, the location is accurate. It's just not the same warranty as a legitimate camera sale.
But it's a great deal!
No doubt about it. Because importers don't have any of the same overhead as Canon and Nikon's US locations, importers can discount significantly.
For instance, Canon USA pays employees to staff customer support lines to answer your questions and to repair and service your camera. They maintain staffs to attend trade shows and camera days in your local retail store to help educate you on your purchase.
By the time you have decided that you just have to have that new Canon 5D Mark III, Canon USA has spent a fair amount of money marketing and advertising to you. Once you've purchased it, they continue their commitment to you.
Your direct importer bears none of those costs, so they can pass on that savings. It might be legal. It might be ethical. But that doesn't make it right.
How can you tell if your product is gray?
You know that warranty card that you sometimes just throw away without filling it out? Yes, that one. Thank God when you see it because that's usually a good sign that you have a legitimate camera.
Cameras imported by the authorized representative always include a printed warranty certificate that says USA on it. Don't believe a seller who tells you that the camera or lens is only registered online.
If you really want to be sure, call the USA office and provide your serial number and the name of the dealer. The USA office can also tell you before your purchase if the dealer you are considering is legitimate.
If the camera you purchased is a gray product, you have no recourse through the USA office.
Take the product back to the retailer and inform them that they sold you a gray product, assuming they didn't alert you before. If this was an honest mistake, they should make good on the sale.
If a retailer intentionally sold you a gray product represented as legitimate, that is fraud. Report it to your credit card company, and ask them to cancel the sale. The retailer didn't provide you the item you were promised in the transaction.
What about used cameras
Even a used camera from a legitimate retailer can be a gray product. Since the retailer likely purchased the camera from a consumer, the retailer would not be able to certify the camera history. It's best to check the serial numbers on used camera and lens purchases.
Canon fights back
Lest you think there are no victims in your gray market transaction, Canon USA filed a pair of lawsuits in October against Get it Digital, LLC and several other widely known gray market retailers.
Canon alleges that the actions of the defendants harm consumers in the following ways:
Using counterfeit serial numbers on gray market Canon products;
Lack of enforceable warranties or inferior warranty coverage;
Packaging that does not accurately describe the products contained therein;
The inclusion of cheap photocopies of product operating manuals, as opposed to genuine;
manuals that accompany genuine Canon cameras;
Power supplies and accessories that are counterfeit, manufactured by third parties and/or not compliant with applicable laws, regulations and certifications;
Canon USA claims that actions by Get It Digital, LLC and the other defendants constitutes trademark infringement, unfair competition and use of false designations of origin and false descriptions and representations with regard to Canon’s registered trademark.
Canon USA also claims that the defendants’ conduct constitutes unfair competition by passing off, misappropriation and imitation of Canon products under common law.
Because Canon USA believes that the continued practice of selling gray market cameras and other products would continue to violate its trademark rights, Canon is asking the federal court to issue an injunction that orders each of these companies to cease all sales of gray market Canon products.
Additionally, Canon USA is going after all of their profits for gray market Canon products sold by these companies, as well as seeking damages incurred by Canon USA, which could include servicing gray market products and other measures Canon USA has taken in response dealing with the defendants’ gray market camera sales. Finally, is also seeking attorneys’ fees and costs associated with filing these lawsuits.
The damages sought by Canon in these lawsuits could very well reach into the millions of dollars and put these companies out of business for good.
— Photography Bay
This should be an interesting case to follow. A decision in Canon's favor can move these transactions out of the gray area.
Marc Tobias intervies B&H Photo Video's Henry Posner
What happened in my situation?
I didn't suffer any of the extreme effects. My camera showed up eventually. It turns out that it was being shipped from overseas. I bought a gray camera without realizing it. I was quite lucky, but many buyers aren't so fortunate.
Many end up with broken cameras and no recourse. If you find yourself in that situation, it won't seem like a gray area at all. Spending thousands on a camera that doesn't work and that you can't fix will seem like a clear problem.