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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Apr 22, 2013

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A 26-year-old college graduate tried to resell his copy of Google Glass on eBay to repay his student loan debts, but removed the bid due to recent security restrictions.

The bidder from Philadelphia, who, for security purposes, would only give the name Ed, said he did not know about Google Glass’s terms of service clause which includes a ban on reselling or loaning the products to others. Once he learned about the clause on Wednesday, he decided to take down the Glass bid which had climbed to over $90,000 in four days.

Google Glass is the wearable computer software outfitted on a pair of glasses. While it is not available for consumer purchase, an Explorer program called #ifihadglass put on by Google, allows selected consumers across the country to try out the product for $1,500.

Last week, Explorer’s first batch of Glass was shipped out, along with several legal clauses, one being the resale ban. Google will take action if the terms are breached, stating: “If you resell, loan, transfer or give your device to any other person without Google’s authorization, Google reserves the right to deactivate the Device.”

If the terms are breached, no refund support or warranty will be given.

Terms of Agreement

Ed said once he learned about the legal clause, he decided to remove the bid.

“I was never contacted by Google or eBay to remove the auction,” he said.

The bid for his copy of Glass started at $5,000. By the second day, someone made the first bid. It remained for one day.

Then something drastic happened: during the middle of the night last Tuesday, it jumped from $5,000 to over $90,000.

Ed suspects the activity was from a Google Glass group that trolled the online auction, rather than from legitimate bids. Trolling is internet-derived slang referring to intentional actions to disrupt, annoy or cause grief to others. When asked if the trolling group would have paid for the product, Ed said they knew about the legal clause.

“They knew before I did about the terms of agreement,” he said.

Ed told loans.org that he has not received Glass yet, and is still awaiting his copy of the augmented reality device. He does not predict that his brief auction will stop the delivery, because he legally had not been given the terms of service agreement yet. Each agreement comes when Glass is delivered.

Although Glass is a consumer product, the Explorer program is being touted as a way to review the product ahead of time.

Robert Scott, an intellectual property and technology attorney, said the terms for Glass are similar to the way software publishers license their software.

“Purchasers generally believe they own the software but actually they are licensees agreeing to the publisher’s terms set forth in the End User License Agreement (EULA) before they can download or install the software,” Scott said.

Another Explorer

Chris Maddern, CEO of AppLaunch and another Glass recipient from the Explorer program, said he is not surprised by the resale clause, but rather the fact that the awarded Explorers are not being asked to sign non-disclosure agreements in order to get the product.

He said it is difficult to say if Google will enforce the terms of agreement to the fullest.

“They’ll want to avoid any negative press on this sensitive subject,” he told loans.org. “That said, I’ve been continually amazed at the sensitivity with which they treat Glass and so it may be that they’ll protect their baby extremely aggressively.”

Similar to Ed, Maddern said he was approached with a high offer, $35,000, for his Glass. Maddern said that although he declined, it was a tempting offer.

“The allure of tens of thousands of dollars is massive, especially if you don’t have a plan to capitalize on it yourself,” he said.

Although he never offered up the product for sale, Maddern said that Ed’s plan to sell Glass is disingenuous because he made an agreement not to. At the same time, he said “it’s hard to blame somebody trying to hustle to pay their student debts.”

Maddern said Google was careless about who got in the program.

“It feels arbitrary to say that they can choose who gets them and you can’t,” he said.

Repaying His Debts

Ed said his initial plan for Glass was not to make a large profit. Instead, he signed up for the pilot program because he is “generally interested in new technology.”

After being notified that he was chosen for the Explorers program, he began to think about the idea of reselling the product. Instead of using the product now, he said he wouldn’t mind waiting to buy a pair when they are offered to the mass public, and selling his pair now for a large profit. According to estimates, Google Glass will retail for under $400, a large decrease from the $1,500 price tag for Explorers.

“I might as well attempt to capitalize off of it,” Ed said. “It would be more worthwhile to pay down my student loans rather than have a pair of Google Glass that are going to be given to the general public at a much lower price.”

Although Ed removed the bid ahead of time, he doesn’t fully understand why he should be prohibited from reselling the product. He said Glass for the Explorers program is not supposed to be a beta version, but the actual product that will be mass-produced for later. He said the program is just about getting to test the product first.

“If you are paying $1,500 for a product that they are giving you to own, you should be able to do whatever you want with it,” he said.

With his plan now dissolved, Ed said he plans to resume his repayment plan. He said his student loan debts should be repaid within the next 10 years, barring any unforeseen changes.

“I guess I’m more fortunate than others … because they have more student debt than I do,” he said.