Can a used product be re-sold as new?

Mark Meer

Trusted Information Resource
Wondering: can a previously used product be re-admitted into inventory to be sold as new (assuming it meets all applicable requirements)?

For example:
  • We have a product whose final acceptance testing consists of 3 tests.
  • A product gets returned that appears to have no defects (customer has not complained of any defects).
  • Upon return, we address any aesthetic issues (replace any scratched/scuffed enclosures, ensure it is clean,...), and then repeat the 3 acceptance tests. All tests pass.
  • Can this unit be then re-sold as new, or must it be given a separate designation (e.g. "used", "pre-owned", or "refurbished")?

For context, I'm in the medical device realm, so if anyone knows of any specific regulations prohibiting (or advising against) such practice, please let me know.
...but otherwise, I would still like to know what others think of this practice in general.

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P.S. I seem to recall a similar discussion in a previous thread, but couldn't find it. If this is the case, my apologies - kindly just reply with the link, and we can continue the discussion in the existing thread.
 

Mark Meer

Trusted Information Resource
Thanks Miner! That pretty much settles it as far as the US laws...
Does anyone know if there are similar regs in other regions (Canada, Europe, etc.)? ...I'd presume there are, but it'd be nice to have definitive documentation.

Followup questions for discussion:
- What about re-purposing such units for demonstration/rental purposes? If they are marked as "not for resale", is this sufficient? ...or does it have to be wording that definitively conveys that the unit has been previously used?
 

Mark Meer

Trusted Information Resource
Applicable US law 16 CFR. Bottom line, US law says that is deception to sell a used product as new unless you clearly disclose that it has been refurbished.

I'm admittedly not familiar with these regulations, but it appears they relate specifically to the automobile industry? Is this correct?
 

Bev D

Heretical Statistician
Leader
Super Moderator
A lot of this is ‘case law’ as well as codified law. It’s case law because a lot of people have tried to stretch this concept, gotten caught and gotten fined. Any lawyer will tell you that Miner is correct. If you try to sell used product as new it will get you into trouble. Why would you even want to do this? Plenty of people are more than willing to purchase ‘refurbished’ product - at a lower cost of course. And in the human medical device industry? This has disaster written all over it. To sell used product as new is deception, pure and simple. I am in the veterinary medical device industry and I can tell you that this is a real no-no in our industry...
 

Scanton

Wearer of many hats
My understanding from the UK/European prospective is that “new” means just that, and anything that isn’t “new” must have other description “used” “refurbished” etc. to mean the item or product has some miles on the clock (metaphorically speaking) which could have a detrimental effect on its serviceable life.

In the Uk we have the The Consumer Protection from Unfair Trading Regulations 2008 http://www.legislation.gov.uk/uksi/2008/1277/pdfs/uksi_20081277_en.pdf

In Europe we have DIRECTIVE 2005/29/EC Unfair Commercial Practices Directive https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:149:0022:0039:EN:pDF

Both of the above say that you cannot state something about your product that cannot be proven, or make false claims that could mislead a consumer into purchasing a product that they would not have if they had known the truth.
 

Mark Meer

Trusted Information Resource
...To sell used product as new is deception, pure and simple. I am in the veterinary medical device industry and I can tell you that this is a real no-no in our industry...

In the Uk we have the The Consumer Protection from Unfair Trading Regulations 2008 http://www.legislation.gov.uk/uksi/2008/1277/pdfs/uksi_20081277_en.pdf

In Europe we have DIRECTIVE 2005/29/EC Unfair Commercial Practices Directive https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:149:0022:0039:EN:pDF

I'm in total agreement. I wouldn't advise it, nor condone (it's come up in our business with revelation of some "questionable" distributor practices).

I'm just surprised that it isn't easier to find this prohibition spelled out explicitly in any regulations.

I searched terms "new" and "used" in the documents linked by Scanton, and there appears to be no mention of this practice. So, so far the only explicit prohibition in regulation is the CFR reference posted by Miner, which appears to relate only to the automobile industry.
 

Mark Meer

Trusted Information Resource
does your company have a lawyer? they will know

Probably also a legal question: can the manufacturer be held liable for the sales practices of a distributor?

Their practice appears to be having a sales person deliver a unit to a potential customer, demo it, and leave it with the client, at which point they have X days to try it and return if unsatisfied, otherwise they are charged and the unit is considered sold. Apparently they take units returned, run through their own internal quality checks, then repeat...

To be honest, I don't know how they advertise to their customers, I'm just assuming that customers assume they are getting new units. But without any explicit regulations to go by, it's hard to know if their practices are acceptable or not. For example, is it ok if they were just communicating orally or in invoice that the unit has been previously used, or does the unit have to be explicitly labelled as such? Is "like new" acceptable designation?

I'll have to get more information from the distributor, but until I do, I'd just like clarification as to what is and is not acceptable, and what are (if any) mandated regulatory requirements.
 
S

sarah66

Actually to be a good businessman,we usually be honest to all people from long term seek
 
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