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Old 08-22-2019, 08:05 AM
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vindibona1 vindibona1 is offline
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Default Consignment rip-off or legit practice?

I think one of the local shops ripped me off, but before I decide what I'm going to do going forward I want to know what you guys think.

I put a Les Paul, numbered limited edition in a shop for consignment sale. We agreed that the commission for the consignment would be 25%. I thought it was high, but agreed. There is a lot more to this story. The short version is that it sold 3 months ago for $2000 and they never called me and only when I went in to pick up the guitar was I told it was sold.

But the part that got me riled was, with tax the guitar cost $2200 as there is 10% tax. He said he takes commission on everything INCLUDING THE TAX! Then he deducts the tax after he took his commission on everything including commission on the tax.

The difference didn't come out to be a lot of money, but it's the principle. The tax was paid by the customer through him. It wasn't paid TO him, yet he felt free to take 25% of that extra $200.

Am I right to feel cheated?

PM me if you want to know the name of the store.
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Old 08-22-2019, 08:12 AM
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Quote:
Originally Posted by vindibona1 View Post

Am I right to feel cheated?
Yes! Taking a commission on the tax seems absurd. It's not like you received the other 75% of the tax collected....
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Old 08-22-2019, 08:23 AM
Ed66 Ed66 is offline
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I agree it seems like you got shorted $50.00. Was there any signed agreement on specifically how the commission would be calculated? I've never seen it calculated on gross price including sales tax, but it's all in the agreement. The owner may need to know it could be the last time you use him.
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Old 08-22-2019, 08:24 AM
sportycliff sportycliff is offline
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ripoff here.

Last edited by sportycliff; 08-23-2019 at 05:45 AM. Reason: Political comments removed.
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Old 08-22-2019, 08:25 AM
sakar12 sakar12 is offline
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I'd feel cheated, yes, and especially since they didn't tell you the guitar sold.
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Old 08-22-2019, 08:27 AM
murmur70 murmur70 is offline
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I believe 25% is standard for consignment but paying an additional 25% on the sales tax is definitely a ripoff.
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Old 08-22-2019, 08:27 AM
jaymarsch jaymarsch is offline
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In all of the consignments that I have done, I have not run across that practice. I have had to follow up with shops who, due to their own cash flow, do not always contact me in a timely manner to let me know that an instrument sold. I tend to monitor the situation myself and stay in touch with them.

The tax thing sounds weird to me. That should have been spelled out clearly in the beginning if that is their practice. 25% including tax is a high consignment fee.

Best,
Jayne
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Old 08-22-2019, 08:28 AM
ohiopicker ohiopicker is offline
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The fact that he took commission on the tax AND id not call you to tell you the item sold tells me this is someone you donít want to do business with again.

Did you have a contract that spelled out anything?
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Old 08-22-2019, 08:38 AM
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That stings. NOt sure what the fine print says. I get it's the principle, and it is. There squeezing every penny from you. To me, you should present your case to the owner. Maybe you weren't informed of what you feel you should of been upfront. You don't have anything to lose at this point and at least you'll get the satisfaction of telling your side. Also that there losing a solid customer and anyone else that you speak to.
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Old 08-22-2019, 08:39 AM
mysterious1s mysterious1s is offline
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Yes. That is not fair.
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Old 08-22-2019, 08:41 AM
GangstaPat GangstaPat is offline
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I'm going to have to chime in with my "Yes" vote. You do have the right to feel cheated. The fact that it sold and they didn't notify you really chaps my hyde. PM'ed.
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Old 08-22-2019, 08:42 AM
Tone Gopher Tone Gopher is offline
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Quote:
Originally Posted by vindibona1 View Post
The short version is that it sold 3 months ago for $2000...

But the part that got me riled was, with tax the guitar cost $2200 as there is 10% tax. He said he takes commission on everything INCLUDING THE TAX! Then he deducts the tax after he took his commission on everything including commission on the tax.

The difference didn't come out to be a lot of money, but it's the principle. The tax was paid by the customer through him. It wasn't paid TO him, yet he felt free to take 25% of that extra $200.
If he is charging commission on tax, then he should be reporting that income as well. That smells like tax fraud.

The 10% does not go into his pocket at all. It is paid by the buyer, and should be passed along in its entirety.

I would discuss the matter with the shop, and offer to refer them to the tax commissioner if they need to better understand the math of doing business.
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Old 08-22-2019, 08:46 AM
Merak Merak is offline
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Quote:
Originally Posted by Tone Gopher View Post
If he is charging commission on tax, then he should be reporting that income as well. That smells like tax fraud.

The 10% does not go into his pocket at all. It is paid by the buyer, and should be passed along in its entirety.

I would discuss the matter with the shop, and offer to refer them to the tax commissioner if they need to better understand the math of doing business.
Agreed they sold the guitar, not the tax.
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Old 08-22-2019, 08:47 AM
seannx seannx is offline
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I've sold two guitars and an amp through a local store. The selling price was specified in a written contract, along with the commission, and what I would net. Sales tax was not included in the calculation.

At minimum I'd leave an FYI Yelp review to warn others of their commission strategy, as well as how three months after the sale you still hadn't been notified. If they have a Google business listing, leave one there, too.
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Old 08-22-2019, 08:48 AM
jaymarsch jaymarsch is offline
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Quote:
Originally Posted by Tone Gopher View Post
If he is charging commission on tax, then he should be reporting that income as well. That smells like tax fraud.

The 10% does not go into his pocket at all. It is paid by the buyer, and should be passed along in its entirety.

I would discuss the matter with the shop, and offer to refer them to the tax commissioner if they need to better understand the math of doing business.
Excellent points, George. I agree.

Best,
Jayne
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