Coach Goes After eBay Sellers, Even Those Selling Authentic Bags at Discount

As you can imagine, high-end brands are often subject to counterfeiting and theft. So they are extremely diligent about monitoring who sells their products and where. But one luxury handbag maker, Coach, is being accused of going too far by banning customers from its stores for trying to buy new merchandise, and for shutting down online sellers hawking Coach bags on eBay. There's a lawsuit and a litany of online complaints, but will it have an impact on Coach's reputation?

The story goes like this: Gina Kim bought a Coach bag, didn't want it and put it up for sale on eBay. Shortly after, she received a "cease and desist" order from Coach's law firm, calling her a counterfeiter and demanding restitution of $300 and the possibility of up to $2 million in damages. This is for an authentic Coach bag purchased for $428.

At Coach's request, eBay removed the seller's listing. After Kim showed proof of her purchase, Coach acknowledged it was in error and allowed the listing to be reinstated. But the scorned handbag owner fired back with a lawsuit of her own, alleging Coach's action was a violation of the state Consumer Protection Act, among other claims.

The lawsuit claims that Coach's real motive is to suppress secondhand sales and force consumers to pay premium prices at Coach's own stores. Kim is seeking class-action status and, based on some online chatter and comments from other eBay sellers, she may find a good deal of company.

Coach tries to monitor who sells its products, tracking eBay sellers who buy purses at a discount and then resell for a profit online. It's a booming business, apparently; as I write this there are 37,501 Coach purses for sale on the auction site. According to online forums, Coach is attempting to limit theses sales, sending letters to individual eBay vendors telling them they've bought too many bags — there's a limit to the number you can buy at once — and banning these customers from Coach stores. Some people have been asked to present an ID when shopping, then the store clerk checks it against a list from Coach corporate, much like the government's No-Fly list. If the shopper's name is on the list, he or she is refused service.

Neither Coach or the Seattle resident filing the suit responded to questions, but that's not surprising; parties involved in legal disputes rarely comment outside the proceedings. Also, Coach has a history of not answering media requests, mine included.

eBay has a list of rules and regulations for sellers on its site and offers advice to buyers in an attempt to help avert sales of counterfeit items. Still, there are plenty of fakes up for auction, including Coach bags. It's often a case of buyer beware. It doesn't have any rules against selling authentic items, regardless of the manufacturer. I, myself, have occasionally sold new, or like new, items on eBay or Amazon, including a couple of Coach purses.

An eBay spokeswoman said in a phone interview, "You're allowed to sell anything and everything on eBay. We have a zero tolerance for copyright infringement, but no one should be afraid to sell authentic merchandise on the site. It's completely allowed, and we have a great relationship with retailers like Coach."

What do you think about Coach's actions? Vote below:

Laura Heller is a freelance writer based in Chicago who specializes in mass market retail trends and consumer electronics industries. You can follow her on Twitter @lfheller. You can also sign up for an email alert for all dealnews features.