|Thu Oct 20 2011 17:56:20|
Louisiana Passes Law Banning Cash for Sales of Used Goods
By: Ina Steiner
| It looks like the good state of Louisiana is borrowing a page out of eBay's policy handbook. Legislators there passed a bill banning the use of cash for the sale of second-hand goods. And while the bill ostensibly targets dealers, the law is so broad it could affect almost anyone.|
Louisiana HB 195 was signed into law by the governor on July 1, 2011, and went into effect on August 15th. It imposes new requirements on secondhand dealers, but excludes pawn shops and non-profit entities.
The law uses a broad definition of secondhand dealer: "Anyone, other than a nonprofit entity, who buys, sells, trades in, or otherwise acquires or disposes of junk or used or secondhand property more frequently than once per month from any other person, other than a nonprofit entity, shall be deemed as being engaged in the business of a secondhand dealer."
As Louisiana lawyer Thad D. Ackel, Jr. Esq. wrote in a blog post about the issue, that could encompass everyone, from local flea market vendors and buyers to a housewife purchasing goods on eBay or Craigslist, to a group of guys trading baseball cards.
"Lawmakers in Louisiana have effectively banned its citizens from freely using United States legal tender," he wrote.
Thad told us he's been receiving a lot of attention from people all over the country who've read about the law on his blog. Indeed, readers have been forwarding links to blogs and news stories about the legislation.
Thad said the new regulations provide law enforcement with the ability to potentially identify criminals, but that the intent could be accomplished in a less intrusive manner.
The bill is reminiscent of a legislative movement we saw a number of years ago. In 2005, as eBay drop-off stores were popping up around the country, pawn shops and auctioneers supported legislation to try and impose the same restrictions on drop-off stores as they were required to follow, and many law enforcement agencies also supported such measures.
By 2007, the movement to regulate the sale of secondhand goods was still going strong, and Kathy Greer, Senior Editor of Unravel the Gavel newspaper, tackled this issue for AuctionBytes in 2007 and compiled a chart, "eBay Drop-off Store: U.S. State Licensing Issues." (Note that we do not update this chart - it's an interesting snapshot, but do not rely on it to make business decisions.)
While the record keeping may be burdensome, what secondhand dealers will be most concerned about judging by how such legislation impacted eBay consignment sellers in the past is the effect on customer behavior.
Will parents selling used kids clothes at a secondhand store agree to provide their driver's license number and license plate number for every transaction, knowing it will be sent electronically to local law enforcement agencies - and not even get the satisfaction of cash in hand when they walk out of the store?
Thad said he's worried about the unintended consequences of the new law and takes issue with the requirement that business owners must electronically hand over their customer lists each day. That's a proprietary business asset, he said - the value of client information is proven, as Barnes & Noble acquisition of Borders' customer list for $12 - $14 million demonstrates.
Thad said his clients have been approached by law enforcement who've notified them about the new requirements, but has not heard of any cases in which law enforcement have approached individuals.
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