Grey iPads could be costly

Consumers purchasing iPads through grey import channels may be setting themselves up for costly repercussions.

With Apple claiming the sale of over 300 000 iPads, the downloading of over 250 000 ebooks from its iBookstore and over one million applications from its App Store by iPad users, all during the first day of release, South African fans were probably even more impatient for the much-hyped tablet.

Some consumers have taken to grey imports of the product, since there is no release date for SA in sight, according to Rutger-Jan van Spaandonk, executive director of local Apple distributor, Core.

Grey importing is when a product is brought into a country and sold by businesses that are not official resellers of the company, explains Van Spaandonk.

He says grey importing, with regards to Apple's terms and conditions, would result in the loss of warranties and could possibly result in fines for the business providing the grey stock.

Van Spaandonk says there is no international warranty for grey stock and emphasises that marketers lie to customers, since no matter what they say, warranties are not valid for units bought through grey imports.

“If you go to South African law you will see that they [grey importers] are lying. You have no rights to service and no warranty if you don't buy from an official reseller. It's in contravention of the law.”

However, online shopping site Wantitall.co.za has been taking orders for iPads since two weeks ago, according to founder Justin Drennan. He says all of these products hold their warranties with the respective manufacturers internationally.

“In this way, the clients still have a warranty. If there are warranty issues, we send back to the US and they repair for us.”

iPads will have to be sent back to the US for repairs, because Apple states in its legal terms: "Apple may restrict service to the country where Apple or its authorised distributors originally sold the hardware product."

Online retailer Have2have.co.za has been delivering iPads to customers since last Thursday, according to co-founder Simon Swanich.

“We source all the iPads from an authorised Apple retailer, so they come with the standard international warranty issued by Apple US. Should anything go wrong with a unit, it is sent back to the US for repair/replacement.

“We do offer a return service where we handle the whole process of returning it to Apple and ensure that the new unit is delivered to the customer's door. Under the agreement, customers can also take the unit to any Apple-owned store or service centre anywhere in the world for service. Sadly, they don't own such sales or support facilities in SA.”

But Van Spaandonk points out problems with customers accessing warranties through the grey importers.

He explains that, although the importers may have the warranties for the products, according to Apple's terms and conditions, warranties are not transferrable.

It states: "Apple... warrants this Apple-branded hardware product [iPad] against defects in materials and workmanship under normal use for a period of ONE (1) YEAR from the date of retail purchase by the original end-user purchaser ('Warranty Period')."

He explains that this is why the importers lie. “If you take it [iPad] back to them [grey importers] with problems they will say: 'Well, you dropped it', and then there's no warranty. They will just tell you it's because of you that the product isn't working.”

He says the product is not officially available in SA at all, so there will be no service or warranties upheld here.

“At this point in time, no Apple authorised service provider (AASP) - not even us - is authorised nor equipped to service iPads. We cannot help, even if the customer were to have paid import duties, taxes, etc and could prove it. Furthermore, grey importers are not AASPs, and may not repair or exchange iPads.”

He emphasises that when buying from a grey importer who is not authorised as a distributor, the customer runs the risk that the warranty does not apply, since it is not transferable.

According to patent and trademark attorneys Adams & Adams' Web site, the Department of Trade and Industry published a Notice in the Government Gazette, in February 2007, relating to the practice of parallel importation in terms of The Consumer Affairs (Unfair Business Practises) Act 71 of 1998.

“The effect of the Notice is that the sale of grey products, without notifying the consumer that the seller is not authorised to distribute the products, and the authorised South African distributor is not obliged to honour the trademark owner's warranties and after-sales service on that product, is an unfair business practice. The unlawful conduct is punishable by a fine not exceeding R200 000 or imprisonment for a period not exceeding five years or both.”

Because of this and the warranty issue, Van Spaandonk advises customers who cannot wait, to buy directly from the US or through Apple's online store so as to ensure they do not lose out on the considerable sum of money that the iPad costs, should something be defective.