Consignment rip-off or legit practice?

[RP]

Originally Posted by Shortfinger

...Had the guitar opened up when in the store?

Please pardon my ignorance but do solid body electric guitars "open up"???

[KevWind]

Originally Posted by RP

Please pardon my ignorance but do solid body electric guitars "open up"???

When ya plug er into a 50 to 100 watt tube amp, it will open right up

[guitar george]

All fees and taxes, and who is to pay those fees and taxes, should be described in detail in the consignment agreement signed by both parties. If there is no signed agreement, then, when you consign and sell a guitar for $2,000.00 and the commission is 25%, you would expect to receive $1,500.00 from the sale. The $500.00 commission would be considered sales revenue and the store owner would pay income taxes on that revenue.

[why2]

All seem to agree that the OP got duped by the store owner. Including it seems that the store owner used the OP's money for three months interest free.

Okay, back to possible recourse. How would one get the owner to make good?

Squawk loudly on social media?
Go to the Better Business Bureau?
Go to tax and revenue explaining that the store owner earned a commission on the collected tax?
Put the store name and location on AGF?
Posters on telephone poles?
Fliers from helicopters? (maybe not cost effective)

Is any of it worth it? I think maybe.

why2

[rz1]

Originally Posted by why2

All seem to agree that the OP got duped by the store owner. Including it seems that the store owner used the OP's money for three months interest free.

Okay, back to possible recourse. How would one get the owner to make good?


Go to tax and revenue explaining that the store owner earned a commission on the collected tax?

This. One simple phone call to the state's Dept of Revenue (or whatever it's called in his state) would clear up whether or not anything illegal occurred.

[fuman]

Our local shop raised their take from 20 to 30 percent. I think that's too high, but 25 seems reasonable. I don't think he should charge you on the tax. The last consignment I had was charged on the sale net of the sales tax, i.e. the selling price. If you have a written agreement, though (and you really should have one to protect yourself) it might have specified that the consignment is calculated on the gross. So I would check.

Without an agreement, you would be exposed to loss if there was a fire, theft, or damage. The law on bailments can be tricky. You want to know what happens in any reasonably likely scenario.

[devellis]

The few times I've sold on consignment, it always worked like this: The shop asked me what I wanted to get out of the instrument. Let's say I wanted $1000. If their rate was 20%, they'd divide $1000 by (100% - 20%). So that would be $1000/.80 = $1250, which is what they'd list the instrument for. Work it in reverse (ain't algebra grand), and 20% of $1250 is $250 for the shop, while 80% is $1000 for me. Tax was strictly a matter between the shop and the buyer.

If the instrument sold (and they all did), I'd get the amount I'd agreed to accept ($1000 in this case) with no additional deductions.

If 10% tax were collected (our rates locally are lower but that's a simpler figure to work with), then the buyer would pay a total price of $1250 + $125 = $1375. I'd get my grand, the shop would get its $250, and the tax collector would get $125. Again, neither I nor the shop took the tax hit. It's the buyer's responsibility.

[619TF]

Originally Posted by devellis

The few times I've sold on consignment, it always worked like this: The shop asked me what I wanted to get out of the instrument. Let's say I wanted $1000. If their rate was 20%, they'd divide $1000 by (100% - 20%). So that would be $1000/.80 = $1250, which is what they'd list the instrument for. Work it in reverse (ain't algebra grand), and 20% of $1250 is $250 for the shop, while 80% is $1000 for me. Tax was strictly a matter between the shop and the buyer.

If the instrument sold (and they all did), I'd get the amount I'd agreed to accept ($1000 in this case) with no additional deductions.

If 10% tax were collected (our rates locally are lower but that's a simpler figure to work with), then the buyer would pay a total price of $1250 + $125 = $1375. I'd get my grand, the shop would get its $250, and the tax collector would get $125. Again, neither I nor the shop took the tax hit. It's the buyer's responsibility.

Yes, that's exactly the way the law works. OP was clearly robbed by an unscrupulous seller who didn't even bother to notify OP of the sale for months.

[vindibona1]

Originally Posted by why2

All seem to agree that the OP got duped by the store owner. Including it seems that the store owner used the OP's money for three months interest free.

Okay, back to possible recourse. How would one get the owner to make good?

Squawk loudly on social media?
Go to the Better Business Bureau?
Go to tax and revenue explaining that the store owner earned a commission on the collected tax?
Put the store name and location on AGF?
Posters on telephone poles?
Fliers from helicopters? (maybe not cost effective)

Is any of it worth it? I think maybe.

why2

It's a long thread, so to remind everyone, I'm the OP of this thread. I didn't get duped out of a lot of money, but I don't like being treated unfairly. I don't think I would have gone off so harshly had the store owner not held my money FOR THREE MONTHS without contacting me. Subsequently upon me contacting them, I waited for 3 more weeks for them to call me when the owner got back from vacation. They lied to me about trying to call me. I only have a cell- with their number in my contact list. So no way would I have missed that call...

... But here's the one thing that I didn't mention, and I'm still thinking about... They never showed me proof of the amount of the sale. I was asking $2300 for the guitar and said my bottom line price would be $2000. I have no idea if they sold it for more as they never showed me a bill of sale. I trusted the store owner because he is the cousin of a close cousin in our family. I thought that would mean something, but obviously I was wrong.

The amount of the cheat was not going to make or break me. I had agreed to an exorbitant amount of commission, now in hindsight a mistake- especially considering they felt the need to steal a few dollars more. Again, I won't do business with them ever again and if they or my dealings come up in conversation I will share the story. I'm not a vindictive person by nature and believe that one day this guy's karma will come up and bite him hard without my instigation.