How Does Rolex Know if you Flip (Sell) Your Watch?

How Does Rolex Know if you Flip (Sell) Your Watch?

With the ever-increasing difficulty of buying many Rolex watches and the limited availability of them, the discussion of flipping/selling a Rolex watch you buy from an official Rolex retailer has become a growing discussion.

A lot of people who are not very familiar with the Rolex market will be surprised to hear that selling a watch that they have bought recently from a Rolex retailer is a sensitive topic.

But the fact is that the Rolex watch market has become different from most other markets in more ways than one.

Before we go into the topic of how Rolex knows if you flip your watch, we need to understand why they would need to know so.

About the Rolex watch market

As mentioned, the Rolex watch market is different from most other markets in more ways than one.

First off, Rolex watches have a great scarcity today. The demand is simply many times higher than the demand.

The way Rolex sells watches is by having a lot of official retailers around the world. Unlike what a lot of people think, Rolex doesn’t have any own stores except for one exception which is a boutique in Geneva. 

This means that the retailers themselves decide to who they allocate the watches that they receive from Rolex. 

And whilst this has a lot of benefits for Rolex (less overhead, less risk, and less admin), it means they have very limited control about to who their watches are being sold.

But the issue, as mentioned, is that the demand for a lot of models is much higher than the supply that Rolex manufactures and sends to these stores. The result is that to buy some models, customers need to be put on a waiting list by expressing their interest in the store and then wait to be informed that the watch they have requested is now available from the store. For some models, the waiting time can be several years. And for the most sought-after models, the theoretical waiting time based on how many people are on the waiting list, in relation to how many pieces the store receives, can be decades.

And according to market principles, what happens when the demand for something is far higher than the supply? Prices go up. But the catch is that official Rolex retailers are required to sell their watches for the recommended retail price set by Rolex according to their contract. In practice, this means that when a retailer sells a sought-after watch to a customer, they sell it at a lower, sometimes much lower, price than what the market has decided that it is worth. The result is that a customer that buys a sought-after watch can immediately after leaving the store, go on and sell the watch on the secondhand market for a higher price than they bought it for.

This is of course very odd if you look at it from standard market principles, where most items that we buy brand new from official retailers, become less worth than what we bought them for as soon as we walk out the door. Take a car or most clothes, for example. The issue simply doesn’t exist here since the supply is greater than the demand (with some exceptions).

As you can imagine, this is something that makes it very tempting for a lot of people who can get their hands on certain Rolex watches for the recommended retail price to sell it and make some money. This doesn’t of course apply to all models in Rolex’s collection, but an increasing number of models have become harder and harder to come by in recent years.

This is where the issue comes in.

Rolex wants official retailers to sell watches to end customers who are going to use and enjoy the watches for many years to come. But when some customers go on and sell the watches they buy, it goes against what Rolex wants. Since Rolex is not a part of the secondhand market, it means that they lose some of the ”control”. It can also mean that people who truly want to wear and enjoy a certain watch have a much harder time getting it. There are a lot of people who complain about this, which causes disgruntled customers and frustration with the Rolex brand, which is obviously not good for Rolex. At the same time, being in a position where the demand is greater than the supply is positive for any company, in particular luxury brands, who work hard to give their products an exclusive and rare status.

So, in a sense, the scarcity and the fact that many Rolex watches sell for more than the recommended retail price is positive for Rolex. After all, the Rolex brand is more popular than ever, and they sell more watches than ever. In addition, they can easily raise their prices without anyone complaining since many models will still be cheaper than on the secondhand market. But this is a topic for a completely different discussion. One could also argue that many of the people who complain about not being able to buy a certain Rolex watch would not even want to buy the watch if the situation didn’t look the way it does, and perhaps even if they would lose money when buying it. After all, we humans always want the things that we cannot have, whether we are willing to admit it or not.

Someone completely unfamiliar with the current situation of the Rolex market will be shocked that selling a watch that they have bought from a retailer is an issue. After all, you bought the watch and are therefore theoretically allowed to do whatever you want with it. Plus, there are several legitimate reasons why some people would need to sell their Rolex watch other than to just make some money.

But due to the current situation of the market, it has become a very sensitive topic.

But back on topic.

So how does Rolex know if you flip or sell a watch?

How does Rolex know if you flip a watch?

As a result of the huge demand for Rolex watches, the issue of ”flippers” that sell watches immediately after they buy them has become an increasingly discussed topic. And whether or not it’s actually an issue or not, we leave for a different discussion.

But still, there have been reports that Rolex is actively looking for people who flip their watches. Whether this is true or not, only Rolex knows. But we have had this confirmed from several trusted sources, and it wouldn’t be strange at all, seeing that Rolex wants their watches to be sold to end customers.

We also know that many official Rolex retailers (which are technically not Rolex) have hired people to actively look online for people who have sold watches that the store has sold. Some people have been ”banned” from buying more watches from the store because the retailer has found out that the customer has sold a sought-after watch.

So, how does Rolex know if you flip a watch?

The answer is that there are three key ways that they can know:

  • The first, and most common is if they see a watch and its individual serial number online.
  • The second is if someone comes in with the watch in the store, for example, to have it serviced or checked for authenticity and it’s a different person than the one who originally bought it. (This requires that coincidentally, the watch is handed into the same store that originally sold it).
  • And lastly, that a customer calls the store to ask if they have sold the watch. For example, an uncertain customer that wants to assure that the watch they bought is original. This has, however, become more difficult since Rolex introduced its latest warranty card design in 2020 which does no longer displays the name of the retailer that originally sold the watch. And since the main issue is when customers sell new watches immediately after they have purchased them and not that they sell their watch several years after they have bought it, it’s no longer a major issue.

Both Rolex and some official Rolex retailers browse the web looking for visible serial numbers that allow them to identify the watches. This primarily includes marketplaces like Chrono24, eBay, forums, and other places where people may sell their watch. This is also one of the reasons why many sellers blur the serial numbers of the watches they advertise. But some people fail to hide the serial numbers in their adverts, allowing Rolex to see the serial and identify which retailer sold it. And if it’s a Rolex retailer that does the research, they will be able to determine if they have sold that specific watch.

Some sellers don’t think about this or are unaware that Rolex is checking watches that are being sold online. And the result may be that Rolex finds the advert, identifies the retailer that has sold it, and then contacts them and inform them about this. If Rolex discovers that a lot of the watches that a particular retailer has sold immediately end up on the secondhand market, they may suspect that the retailer is knowingly selling to flippers or even dealers. If this is the case, they may receive a warning. Otherwise, they may just advise the store about the fact that one of their customers has sold the watch, and the store then ”blacklists” them, not allowing them to buy any more watches.

A common ”mistake” that some sellers make is that they don’t think about the fact that Rolex watches have the serial number engraved on the rehaut at 6 o’clock. They may blur the serial number on the warranty card, for example, but don’t realize that the serial number is visible in the engraving.

People who are completely unaware that they are not ”allowed” to sell their new watch (which is understandable since it is their own property and they should, at least in theory, be able to do whatever they want with it) may explicitly say that they bought the watch at retailer X and exactly which date. If Rolex or the store sees this, they will of course be exposed very easily.

We want to point out that there is no way for Rolex to see if you sell a watch via the warranty card. The warranty is never connected to a person, but rather the watch. And so Rolex does not keep any ”ownership” registers that shows when a watch is sold or transferred, unlike other brands like Audemars Piguet or Cartier where you register the watch to your account.

There is lots to be said about the current situation of the Rolex watch market, flipping, and the enforcement of rules that official Rolex retailers and Rolex themselves trying to enforce, but this is a topic for a completely different article that may come further down the road, so keep your eyes open on the Wristporn blog!

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