what is the proper protocol

With out a doubt, I would wait to be reimbursed from the shipping company. This is only fair. Otherwise the package could be found and delivered.

I would return the buyer's funds. The seller is responsible for the item until it is delivered to the buyer. --This is how I do business. I have taken to asking sellers (when I am buying) what their policy is should an item be damaged or lost in shipping, so that there can be no misunderstandings.

The rembursement process by the shipper can be as long as 3 months. The buyer should not have to wait this long to get a refund. I would recommend that you refund the buyers money within 10 days. Hopefully the shipping company has already admited that they have lost the package.

Never experienced that on either side of the transaction (knock wood!!). The first criteria would be that I'd want acknowledgement from the shipper that they considered the parcel lost. Then I'd expect that there would be a record of communication between seller and buyer stating that seller was refunding the buyer's money with the understanding that the buyer would not be receiving the parcel.

If the parcel was lost for good, then seller would work to be reimbursed by the shipping company. If the parcel was found, I'd want it returned to the seller if possible. If it arrived at buyer, I'd expect the buyer to either ship it back to seller, possibly at seller's expense, or to re-send the original payment and keep the unit.

I think I'd be satisfied as either the seller or buyer in the above. Obviously, I wouldn't want to have this happen as a buyer or a seller. Good communication and understanding, as always, are key. Everyone needs to remember that used gear, in the long run, saves them a lot of money, so a few extra dollars in shipping costs are a small price to pay.

I think the only thing that would mess with the above is if the amount in question was quite large. Still, I think the above puts more of the responsibility on the seller and, as a seller, its responsibility I accept.

I will definitely wait because there is a good chance even after 60 days that the parcel can be delivered to the buyer.. especially if you use united states postal service. I paid a buyer (international) a good sum of money for a parcel that was supposedly lost, later on delivered to him.. and my claim was denied and I lost the money... buyer disappeared with my eletronic plus money..
just a bad experience for me that i want to share to cover yourself..most especially overseas..if Local or usa, will more likely much easier to pay ..

I agree with Etbaby. The seller is responsible to reimburse the buyer regardless. It's a bummer for the seller, but that's business. And it is fair. 10 day wait is more than fair....warren

I agree with many statements above. I would refund the buyer's money immediately once the shipping company has determined that the parcel is lost, and has committed to pay the claim. I would likewise expect a refund if I was the buyer.

I particularly agree with Orind - The seller owns the package until it's delivered. I've never understood sellers who think once the payment is made, all risk is the buyer's.

Finally, and obviously, once the refund is delivered to the buyer, it should be clear that the package if found is to be delivered to me.

I have to agree with Ditto - the shipping company will typically start a "search" that can take weeks or months to resolve. I had a lost package with Fedex, 2 months later they found it in the search phase (they said that paint had spilled on it and destroyed the outer label). If the package is delivered late the shipping company will deny the claim, and at that point the seller can only hope the buyer will either pay or return the package.

If I trusted the buyer I would go ahead and refund the money now, but I think it is reasonable to ask the buyer to wait until the search is resolved. The seller takes a big risk if the seller refunds the money while the package is still en route to the buyer.

Surprised there is any doubt on this -- the buyer pays, does not get what he pays for, the carrier specifies it is lost -- seller then reimburses buyer immediately -- ONLY THE SELLER CAN COLLECT on the loss. If the carrier then recants and denies that it was lost after saying it was, delivers to the original buyer and refuses to pay the claim, the carrier should be taken to court for incorrectly stating something that led to a loss.

I was the buyer in such a transaction and could not believe that the guy would just keep my money, refuse to sign over the parcel loss collection rights, then be able to DOUBLE collect from UPS. I initiated a PayPal claim, but before they intervened, UPS paid up and he paid me -- months after the transaction. Then he threatened a negative rating if I gave him one.

I wimped out with a neutral and explanation -- he reciprocated same. Bad bad business -- shame on that kind of weasel.

Unless otherwise negotiated, the BUYER bears the risk of loss during transportation. Therefore, the seller has no obligation to reimburse the buyer until he (the seller) receives payment from shipping company.

Just beware for international transaction as you have no recourse once money is returned..It is reasonable for buyer and seller to wait.. both parties should understand as risks cannot just be unilateral.. unless you are a big manufacturer who has added cushion for loss.. not small peanuts like me.
i learned the hard way losing over 3k..be careful out there..

Umaasa...this is a good question, but judging by the response so far there clearly is no proper protocol. As of this writing 7 of the responses feel the seller should take responsibility and 6, including myself, feel that the buyer is at risk. This discussion, including claims involving damaged items, is not new to Audiogon and always seems to go both ways to varying degrees. In the past I would have said that Nhtrans's opinion that the buyer bears all the risk was generally accepted here, but obviously not everyone is in agreement with that statement.

Since there is no established protocol the obvious solution is for buyers to take the responsibility to communicate clearly with the seller to establish what the protocol is for the current transaction and hope that in the event of lost or damaged equipment both parties honor the agreement.

As I have indicated above, my opinion is that the buyer is at risk. Warrenh makes the comment that “it’s a bummer for the seller, but that’s business.” I have to disagree with this statement because by and large this is not business, but a group of hobbyists buying and selling used audio equipment and software (I am not referring to those running a business and selling on Audiogon). We come to Audiogon because we do not want to pay retail, but rather to take advantage of the depreciation of used equipment. Along with the often significant savings of buying used items certainly comes some risk: more often than not, no warranties – it could require repair work a few days or months after it arrives; no guarantee of how it has been taken care of or how accurately it has been graded by the seller; how well it will be packaged even if original packing materials have been retained; and finally the risk of putting it in the hands of a shipping company rather than picking it up or having your local dealer deliver. In most cases the seller is already taking a loss, sometimes a huge loss, so how is it fair that the seller is responsible if the carrier screws up? Certainly the seller should do all that is necessary to file and follow-up on the claims in a timely fashion, but if the buyer does not want any risks then they should either buy new or only locally available used gear (or used gear from an established dealer who accepts the shipping risks). Even then, if there is no warranty you may end up with a repair bill, something you should always keep in mind when buying used.

Bottom line…buyers need to communicate clearly with the sellers before making payment so they know as best as possible exactly what to expect from their transaction. If the seller is willing to take both a loss on their gear and the risks associated with shipment that's great for the buyer, but it should be the responsibility of the buyer to find that out before sending their cash. If you do not and something goes wrong you should not fault the seller for having a different opinion from you on who should be inconvenienced by the lengthly claim process. Finally, if the seller is not offering terms that you are comfortable with then look for another seller.

Nhtran - I disagree. I suggest you read the contract you enter into with the shippping companies. If you're the sender, you own it, not the receiver. That is the contract is between the Sender and the shipping company (ie UPS, Fedex). They will not even recognize nor talk to the buyer/recipient of the package.

Yea, my statement may have been an exageration. They will accept the initial claim filing, and they certainly need to and do talk with the buyer to assess the damage, but they won't go further than that nor send the money to the buyer. At least this has not been my experience. I've been on the receiving end of 3 damaged packages from UPS (2 amps, a subwoofer) - whenever I called UPS to inquire about status they referred me to "the shipper of record" (ie the seller). If they do more than this, perhaps they have changed their practice of late?

FEDEX on the other hand has a process where the seller can transfer authorization to the buyer for all claims. This requires a letter from the seller to FEDEX authorizing the buyer to handle the claim and receive the money. I'm not aware that UPS has a similar process, though they might.

Buyer and seller come to agreement on price, buyer pays, seller sends package and it never arrives or arrives damaged. Seller should insure that it was shipped safely packaged and insured. Seller is responsible to file claim and to make good on refund. Time allowed is negotiable within reason between parties. If seller disagrees buyer should turn dispute over to paypal, credit card co., or post office (if p.o. money order). From my experience if buyer did not receive goods they will refund money to buyer regardless of insurance. Damaged goods are more complicated (as to shipping item back and who gets refund) but the end result will tend toward the same result of buyer receiving refund. Sellers insure your packages. Seems to be more of an Ebay problem cause of trying to save by not buying insurance. Especially on lower priced items. Think I got the basics right. I know it can be more involved. When in doubt use the golden rule. Most cultures have a version of it so it must be a pretty solid standard!

Viridian, I'm with you 100%. I'm not surprised regarding the disparity of opinions: this is Audiogon.

warre :)

well. I think I already spent my quota of opinion on this thread, but I think this is worthwhile discussion and need to add a few more . . .

Viridian's reference to the FAQ's and the general terms of use of this site is right on. Everyone should check them out. Read it all - there's a lot of really good info there. If you read the section on "Shipping Policy", it's pretty clear. Below is the relevant text, and the URL for the entire statement:

Shipping policy
Shipping a Sold Item:
The buyer and seller will determine which party is responsible for paying the shipping charges. Regardless of this determination all items shipped will be F.O.B.* destination. In other words it will ALWAYS be the responsibility of the seller to guarantee that items shipped will be as described and fully functional upon arrival. The seller will further be responsible to insure each package for at least the amount the buyer has paid for the item.

http://www.audiogon.com/cgi-bin/faq.pl?Sellers/Shipping&1065032072&actg#1

This says it's the "Policy". A policy is somewhat more than guidelines. Of course if you read the terms of use, Audiogon has enough disclaimer included so as to render them essentially non-binding (ie in my layman's point of view). I hope/think we can all agree though that the disclaimer is done for liability protection, and that since we all agreed to follow the rules when we sign up, these are the terms that should be followed, and what we expect of each other.

Sellers who think their responsibility ends when they receive their money are pretty common on ebay, and IMO they are simply saying out loud that they aren't trust worthy. As such the only way I would do business with them is if the deal was simply so good it's worth gambling on.

Finally, I think there are reasonable positions taken above with respect to when the refund is given. The key is for buyer and seller to keep cool, be patient, communicate clearly and in all cases act in good faith. I think this one may be hard to cookie cutter in a discussion, or in guidelines. Further, I know there are commercial establishments who will follow the practice as Tvad described, and there are those that would immediately refund. I would say in general I would probably be more comfortable doing return business with the business in the latter example, all other things being equal. In other words, this is an issue of service quality, not necessarily performance.

I understand this inclination. I can say that the company with whom I had this transaction has stellar customer service, and is one of the most highly regarded manufacturers in the high end industry. Communication was excellent, and I never had any doubt of a satisfactory outcome.

exactly - it's the total package that counts.

I am in the camp that believes an item belongs to the seller until it is properly delivered to the buyer in the as-described condition. All shipping/insurance issues are the seller's, in the absence of a prior agreement with the buyer to the contrary. I would promptly refund the buyer for goods lost in shipping, as soon as it was reasonably determined the item was lost. This highlights the importance of using a shipping method with tracking for all but very low cost items.

"as soon as it was reasonably determined the item was lost"

I'd agree with that too - it should take no more than a week or so to file a claim and have the shipping company admit that it is lost and start a search. In the case I described, I was able to have fedex redirect the package to a new address after it was found (over a month and many phone later) so the ability to redirect the lost package (at least at fedex) should provide protection for the seller and allow for a much quicker refund to the buyer.

Bdgregory,

You missed the first part of my response ("unless otherwise agreed to"). I guarantee that if you litigate the matter, a majority of courts will conclude that the buyer bears the risk.

NT

Viridian

May be you should read the FAQ more carefully before you comment. There is a big difference between "should" and "must". "Should" is aspirational but not required, "must" is required.

Audiogon "customary practice" won't help anyone in a dispute. You must look to the laws of the state. And in almost all states, the buyer bears the risk of loss unless agreed to otherwise.

Bdgregory,

The contract between seller and common carrier and the contract between seller and buyer are two different contracts.

Just because the seller agrees with the carrier that he bears risk of loss as it relates to their contract, he does not necessarily agree that he bears risk of loss in the contract with the buyer.

Very interesting thread and educational too. Previously I had only contemplated an item being damaged in transit, not lost or misplaced. I clearly underestimated the ingenuity of UPS and FedEx.

As to the debate on whether the seller or buyer bears the risk of loss in transit, I did a little research (by no means complete) and came up with the following:

1. Mitch2's observation that the item belongs to the seller (and therefore the seller bears the risk of loss) until the item is delivered is correct. Nhtran’s assertion on 07-21 that, unless otherwise negotiated, the BUYER bears the risk of loss during transportation is also (largely) correct. How can these apparently contradictory statements both be correct?

All states have adopted the Uniform Commercial Code, with some local variations. I have only the California version available, but I think the following provision is the same in most other states.

“Unless otherwise agreed:
(a) The place for delivery of goods is the seller’s place of business or, if he has none, his residence.”

Notwithstanding that the seller arranges transportation, he is deemed to have delivered the goods at his residence, so the buyer would bear the risk of loss in transit unless otherwise agreed.

2. So, have the parties agreed otherwise? That was the issue raised by Nhtran in his posts today. I agree with his statement that the contract with the carrier is separate from the contract with the buyer and does not place the risk of loss on the seller. I don’t agree with the rest of his observations.

a. "May be you should read the FAQ more carefully before you comment. There is a big difference between 'should' and 'must'. "Should" is aspirational but not required, "must" is required."

As far as risk of loss is concerned, I read the FAQ and it reads exactly as previously quoted by Bdgregory. The operative provision is

"The buyer and seller will determine which party is responsible for paying the shipping charges. Regardless of this determination all items shipped will be F.O.B.* destination. In other words it will ALWAYS be the responsibility of the seller to guarantee that items shipped will be as described and fully functional upon arrival."

The word “will” appears several times, but the word “should” does not appear at all.

b. "Audiogon 'customary practice' won't help anyone in a dispute."

If by "help" Nhtran means support your legal position, I disagree. I believe that the standard practices expressed in the FAQ become part of the contract between the seller and buyer, unless otherwise agreed. When the written portion of a contract (in this case, a classified ad and an exchange of e-mails) is silent on a particular subject, courts will usually refer (or defer) to practices that are customary in a trade or other association to which the contracting parties belong and under whose auspices they are conducting their transaction. Also, contracts for the sale of goods don’t have to be in writing to be legally binding - written contracts are just much easier to enforce because its harder to dispute their terms later on.

If you want evidence of the importance of trade practices in the law of contracts, look no further than the creation of the legal concept of a contract itself. In the 15th and early 16th centuries, English law courts refused to recognize the concept of a contact (that mutual promises were enforceable), so merchants formed an association with its own procedures that recognized and enforced contracts among its members, creating the “law merchant.” Concerned about competition from this early version of alternative dispute resolution, a few decades later the law courts decided that contracts were enforceable after all and adopted many of the rules and practices of the law merchant.

Tvad’s assertion that the guidelines expressed in the FAQ are not compulsory is also probably true, but that simply means that the seller and buyer are free to agree to something different from the guidelines. However, in the absence of a specific agreement varying from the guidelines, those parts of the guidelines that are affirmatively stated (not merely suggested) probably are part of the contract.

. . . well I thought I posted this last night, but it must have gone into a black hole.

The contract between seller and common carrier and the contract between seller and buyer are two different contracts.

Just because the seller agrees with the carrier that he bears risk of loss as it relates to their contract, he does not necessarily agree that he bears risk of loss in the contract with the buyer.
Nhtran (Threads | Answers)

thanks NT, I think our difference of opinion is based on the fact that you're making a legal argument, and I think this discussion is about expectations we have on this site, and what are fair, good faith practices. I'm not a lawyer, though you appear to be.

Regardless, the sellers I feel comfortable dealing with are those who stand behind their deal all the way, not those who wash their hands of responsibility once the item is handed to UPS.

As for parsing words in Audiogon terms of use doc's, I think the "Shipping Policy" which is published on the site FAQ is unambiguous, would appreciate other views of it. It's probably not legally enforcable, but a clear articulation of expectation. Here's the link again:
http://www.audiogon.com/cgi-bin/faq.pl?Sellers/Shipping&1065032072&actg#1

Don’t want to belabor the point, but I need to correct a statement I made earlier. I overstated the case when I said that contracts for the sale of goods don’t have to be in writing to be enforceable. The contract must be in writing if the sales price is $500 or greater. Sorry for that error.

Interestingly, the Commercial Code requires that the writing be “signed” by the party against whom enforcement is sought. You can put your signature on an e-mail, but most people don’t do it. Is typing your name enough? The Code was formulated in the 1960s and its provisions have not been updated to address changes caused by electronic commerce. Somewhere a court may have addressed this question, but that kind of research is beyond my quick and dirty search.

Notwithstanding my correction above, it is important to realize that, although a contract may have to be in writing, it does not have to state all its provisions in writing. Citing the Commercial Code again, the writing must be “sufficient to indicate that a contract for sale has been made between the parties.” Furthermore, “A writing is not insufficient because it omits or incorrectly states a term agreed upon . . .”

As to trade practices being incorporated into a contract, the Commercial Code provides::

“Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented
(a) By course of dealing or usage of trade . . .”

Usage of trade is defined this way:

“A usage of trade is any practice or method of dealing having such regularity of observance in a place, vocation or trade as to justify an expectation that it will be observed with respect to the transaction in question. The existence and scope of such a usage are to be proved as facts. If it is established that such a usage is embodied in a written trade code or similar writing the interpretation of the writing is for the court.”

Finally, while it may be useful to be aware of the legal background, I sense that most AudiogoN members do not want to resort to strict legal technicalities in dealing with each other. We simply want to buy and sell stuff, not become contract lawyers. However, if you prefer to deal with an issue in a way that goes against the AudiogoN guidelines, it might be a good idea to say something about it, in a non-confrontational way, when communicating with a prospective buyer or seller.

Again, sorry for the incorrect information in my earlier post.

Bdgregory,

You are correct. I am making a legal argument (don't hate me I'm a lawyer). As evidenced by this thread, the expectations of most Audiogon members are clearly not in sync with contract law. If/when a dispute arises, most of these individuals are in for a rude awakening. Because I guarantee you, if the so called "Audiogon customary practice" diverges from contract law, contract law will win.

NT