Getting the cheapest deal online can come with risks. Here's why.

As millions of Americans scour the internet for Christmas shopping, some will discover the hard way that a camera or other expensive item they purchased doesn’t have a valid U.S. manufacturer's warranty.

They’ve entered what’s called the “gray market” where goods are moved between countries and sold in places without the brand's consent.

Nikon camera owners who bought equipment in this murky area of commerce may learn about it when they file a warranty claim.

“They are not covered by a Nikon USA warranty or eligible for Nikon USA repair service,” the company says in a “Gray Market Warning” on its website.

Jeff Dobbs, manager of Mike Crivello’s Cameras in Brookfield, says folks who bought gray-market photo gear are often surprised by the manufacturers’ policies.

Dobbs hears about it when someone brings in one of the cameras, which they didn’t purchase from him, for a warranty repair or replacement. Some brands might oblige, but often it will be at the customer's expense.

“They’ll charge you for it because it wasn’t warrantied here in the United States,” Dobbs said.

Buyers need to pay attention to disclaimers

Gray-market sellers have been around for decades. Their pitch has been that they offer authentic products, not counterfeits, at a discount price. They say consumers can decide for themselves if it’s worth the risk of not getting a manufacturer’s warranty or after-the-sale product support.

The sales are legal, but even if the products are authentic, buyers should read the descriptions and disclaimers carefully.

Gray-market electronics, for instance, may not come with a power supply compatible with a U.S. electric outlet. Products might be used or broken. Batteries and accessories could be missing. The warranty card could have been photocopied from another product and isn't valid.

Some gray-market sellers provide their own warranty for an additional cost. However it could be difficult to reach them if they’re located overseas or they ignore messages.

A gray-market seller could be a camera store in New York with millions of dollars in merchandise, or an individual on eBay or Amazon who’s gained access to products outside the brand’s authorized sales channels.

Health care items are a great concern

There are safety issues with health care items.

“Make gray go away,” industrial giant 3M says on its website about unauthorized sales of its dental products such as adhesives and cements.

“Gray market and counterfeit dental products are a serious global issue that has silently plagued our industry and dentistry globally,” 3M says. “Every gray market product raises the risk of product failure due to improper storage, shipping, or phony expiration dates – not to mention the risk of using an inferior quality, counterfeit product.”

Many brands and businesses in online commerce loathe the practices.

“Gray markets are a shadow cast over traditional retailers and manufacturers. They enable price arbitrage, cannibalization of a company’s own sales, and undermining of brand integrity,” said Bobby Wann, an ecommerce expert and CEO of Nok Recommerce in Gardena, Calif.

Experts say Amazon, Walmart should use more care

Usually camera equipment sold in the United States by Amazon.com, not a third-party seller on Amazon, comes with a U.S. manufacturer's warranty. But there are gray-market sellers on Amazon using vague product descriptions or that sell used, refurbished, and returned items, as new.

Amazon declined to answer questions for this article.

But experts say Amazon and Walmart.com could do more to control gray-market sales.

"Absolutely," said Mark Amir-Hamzeh, president of Sigma Corporation of America, one of the largest brands of camera lenses and other photo gear.

Sigma uses marketplace monitoring services to identify gray market sellers and regularly performs test buys to identify unauthorized sales channels for products offered to U.S. consumers.

"It is all about the consumer experience from start to finish," Hamzeh said. "The consumer is not getting a brand new, properly distributed product direct from Sigma or an authorized US retailer. But we then get the complaints and must explain the service surcharge should a piece of equipment require repair."

Sellers frequently change names, conceal identities

Curbing the sellers can be like a game of whack-a-mole.

Some create businesses with random, vague names. They shut down one operation and reopen under another name without a physical address or with a fake address. They create websites aimed at gaining consumer trust through descriptions such as “family-owned” business. They conceal their identity from email and phone searches.

“Even if Amazon sellers receive ‘cease and desist’ notices, they ignore them because they can afford lawyers to combat their account suspension,” said Emmanuel Frost, co-founder of Brand Alignment, a firm that investigates gray-market sellers and gets them removed from Amazon.

Some gray marketers purchase high-ticket items, in large quantities, from wholesalers with deep contact lists, according to Frost. The largest sellers get deals that no one else has access to by contacting established and normally trustworthy distributors and exporters in countries such as China, India, Singapore, and the United Arab Emirates.

The more successful they become, the more savvy they are at acquiring products.

"They often work in groups, develop strong relationships, and share secrets on how to operate in the shadows and protect their interests. They are not rookies and have contingency plans in place for everything. They've been known to go toe-to-toe with large brands such as Canon and Olympus in the courtroom," Brand Alignment says.

What to do if you've been scammed

How can you tell whether something’s from the gray market?

The labeling could be different than the authentic U.S. version, serial numbers or other product identifiers could be missing or obscured, and the documentation could be in a foreign language. Warranty coverage or rebate offers may also differ from those advertised to U.S. customers, said David Haas, managing director, Chicago intellectual property practice with Stout, a global bank and financial advisory firm.

"Just at the very highest level, if you're getting a deal that looks too good to be true, it very well may be," Haas said.

Another way is to look carefully at the the seller. Check customer reviews and look for patterns of complaints.

Wisconsin consumer protection officials say they might be able to help if you've run into problems with a gray market purchase, although the product still won't be covered by the manufacturer's warranty.

If the seller is located in another state, Wisconsin's Department of Agriculture, Trade and Consumer Protection could work with partnering agencies in that state to resolve the complaint.

"We do a lot of information exchange with our partner agencies," said Michael Domke, director of DATCP's Consumer Protection Bureau.

The federal INFORM Consumers Act was designed to provide consumers with transparency about online third-party sellers and to deter criminals from selling stolen, counterfeit, or unsafe items online.

Under that regulation, online marketplaces must provide contact information for high-volume third-party sellers of new products. They must give shoppers a way to report suspicious conduct including the sale of branded merchandise at unusually low prices.

Wisconsin's product misrepresentation law is fairly broad, according to Domke.

"In general, it says that if you make any deceptive or untrue statement or misrepresentation when trying to sell a good or service, it's illegal. And it doesn't matter whether it was intentional or not," he said.

This article originally appeared on Milwaukee Journal Sentinel: Gray-market products, often tempting online deals, come with risk