Nike Tries to Stamp out Sneaker Resellers

As part of its ongoing efforts to stop sneaker resellers, Nike has updated its terms of sale to say it could cancel online orders made using automated technology or software.

The new rules also give the sneaker giant the ability to reject sales, decline refunds, or suspend the accounts of buyers it says are purchasing shoes and other products just to resell them. Nike said it could also reject orders that exceed its product purchase limits.

Nike, whose stock price has been cut in half in the past year, was not immediately available for comment Wednesday morning (Oct. 12).

Earlier this year, Nike took legal action against Stock X, accusing the sneaker reseller of selling fraudulent versions of its shoes.

Read more: Nike Alleges Sneaker Marketplace StockX is Selling Fake Shoes

Nike said in May that it had bought four pairs of counterfeit footwear from StockX, despite that company’s pledge that it only sold legitimate athletic shoes.

“Those four pairs of counterfeit shoes were all purchased within a short two-month period on StockX’s platform, all had affixed to them StockX’s ‘Verified Authentic’ hangtag, and all came with a paper receipt from StockX in the shoe box stating that the condition of the shoes is ‘100% Authentic,’” Nike said in a court filing.

StockX has said it takes customer protection “extremely seriously,” and that it has spent “millions” trying to stave off counterfeit product proliferation.

The May filing was part of a lawsuit that began in February, with the sneaker giant accusing StockX of “blatantly freeriding” on Nike’s trademarks and goodwill via its Vault NFTs service. StockX said its non-fungible tokens (NFTs) are not digital sneakers, but instead “listings for physical sneakers that are stored in a vault.”

The news comes as Nike is dealing with a host of other headaches. Late last month, the company promised to take “decisive action” to clear excess inventories.

See more: Nike Promises ‘Decisive Action’ on Inventory, More Investment in D2C

Like many retailers, Nike has spent the year dealing with an inventory glut — jumping 65% in North America and 44% overall.

Although strong consumer demands for popular shoes like Air Jordans led to early ordering by retailers, unpredictable delivery schedules caused in-transit inventories to grow to 85%.

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