Sneaker giant Nike has added new terms and conditions that prevent resellers from purchasing footwear and selling them on the secondary market. The policies, which have been in place for years, were revised to include harsher penalties for shoppers buying items to resell. The new clause that bans the resale of sneakers comes into effect in October 2022.

Resellers make huge profits on sneakers

The significant move comes after Nike discovered how resellers have benefitted from the market. For instance, right after Louis Vuitton x Nike Air Force 1 collaboration in July, a resale platform KREAM displayed shoes typically priced at $2,527 USD at an increased rate of $9,785 USD. As a result, Nike said it could cancel orders placed with automated websites or applications to prevent the loss.

Nike has incorporated strict policies for shoppers

Nike shoes are one of the most popular items in the resale market, thanks to sneaker enthusiasts. The sneaker giant also said it could refuse to issue refunds or suspend the accounts of shoppers buying its shoes, apparel or other items with the intent to resell them. According to the revised terms and conditions, Nike can reject orders on products that exceed purchase limits. In addition, Nike’s terms of sale govern the rights of consumers, from purchases to returns.

Image Credit: atmos/Instagram

Nike prohibits purchase of products for resale

Nike had previously prohibited purchasing products for resale, but the terms and conditions did not mention specialised software. However, large retailers have cancelled orders for high-demand items bots could purchase. The use of bots to secure goods became popular over the years. Moreover, digitally savvy shoppers increased bot usage during the pandemic to secure hard-to-get items, including gaming consoles and computer graphics cards.

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Nike has complaints from frustrated shoppers who can’t secure products at retail prices from Nike but eventually get them from resale platforms at high ranges. Resellers have been walking away with more profits than Nike earns per sneaker. And while engineers have been trying to stop bots for years, protecting a website from botting gets tricker by the day.

The global sneaker resale market is estimated at roughly $6 billion a year, and Nike said it recorded more than $46.7 billion in revenue last year. So, Nike’s latest move puts the industry on high alert and questions whether other brands will follow suit.

(Main image: Lennart Uecker/@lennartuecker/Unsplash)

This story first appeared on Lifestyle Asia Hong Kong