Defacing Merchandise. What it is and How it’s Done.

Many retailers require delabeling. The good news is, most customers don’t mind an altered label or lack of original packaging if it’s a great, high-quality item at a discounted price! In this article we will discuss:

• What is defacing?
• Common defacing procedures
• Where to find retailer’s delabeling requirements
• Reselling defaced merchandise

Defacing Merchandise…What is it?

Defacing, also referred to as delabeling, is a process that some retailers require when selling their goods on the secondary market. Major retailers often require the removal or damage of labels, tags or UPC codes on their merchandise in a bid to ensure all overstock goods being sold in the secondary market are known. This prevents the reseller, or the new end-user from returning the item to the store for credit or a full refund.

When Sellers Require You to Deface

Sometimes, the retailer will indicate in the listing that they require you – the buyer – to deface the merchandise prior to listing it for sale. In these cases, you’ll need to know the retailer’s requirements for their items to be defaced.

For boxed items, it could be as simple as drawing a line through the UPC code on the box. For packaged goods it could include:

• Removing the product from its packaging.
• Removing or drawing lines through all brand identifiers and UPC codes using a permanent black marker (the lines must be vertical for UPC codes).
• Discarding all warranty cards and registration information.

For clothing pieces, it could be done a few different ways, such as:

• Removing sale tags
• Drawing a line through the tag barcode and logo
• Removing the labels from inside the clothing piece
• Drawing a line through the logo on the label inside the clothing piece
• Removing heat stamps

Where to Find Retailer Defacing Requirements

Individual retailer’s defacing requirements can be found in each marketplace’s Terms of Purchase. 

For example, the HSN Liquidation Auctions marketplace describes its delabeling process like this: 

Identification of HSN. You shall not sell, lease or otherwise transfer or dispose of any of the Inventory Products, unless you first Demanufacture such Inventory Products. “Demanufacture” means, in accordance with HSN’s specifications, to remove, if possible, all of the identifying marks, including, but not limited to, HSN’s or its affiliates’ names, logos, serial numbers, UPC numbers, RA numbers, and other identifying marks (including but not limited to tags, labels, price stickers, bar codes, or other carton or packaging markings) from the packaging. 

It’s important to remember that delabeling protects you (the reseller) as much as the original retailer or brand.  Consider this: if you purchased an auction lot of returned private label clothing, originally from department store returns, and then resold the clothing at half-price discounts – but didn’t remove all identifying labels – one of your customers may try to return the apparel to the original retailer for a full price credit. This causes the original retailer to lose money and you, the reseller, to possibly get sued for breach of reseller contract.

Reselling Defaced Merchandise

When it comes to reselling delabeled items you may need to roll up your sleeves and step out of your comfort zone a bit; but in no way does it affect the item’s functionality or profit-making potential!  Certain marketplaces, particularly Amazon, have strict policies about offering “like new” items, which can make selling delabeled products more difficult. For maximum impact, eBay is most likely your go-to channel for defaced merchandise. 

Whichever marketplace you choose, when listing a delabeled item, be clear about its condition. Include a photo of the marking to show that it doesn’t affect the condition of the item, as well as pictures that highlight details of the product’s quality. And, of course, be sure to market that the item is being offered at a huge discount!

In the listing descriptions, be honest. Let potential customers know the label, tag or barcode has been defaced due to the reselling policy of the original retailer. And, of course, indicate that the defacement has not affected the functionality of the item and it’s still classified as a ‘like-new’ item. 

For more online reselling tips, be sure to read our post 5 Marketing Tips for Reselling Online.