EcommerceBytes-NewsFlash, Number 985 - March 30, 2005     2 of 2

eBay Drop-off Store Owner Faces Charges He Violated Local Regulations

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The owner of an eBay drop-off store in Florida was apparently arrested by police in Tallahassee for not following the law regarding pawn shops and consignment shops.

In an email to AuctionBytes purporting to be from the drop-off store owner, he said he was charged with violating Florida statute 538 section 04 (http://digbig.com/4dayp). "The statue clearly states this is only required when you acquire an item by purchase or pledge for a loan, none of which we do. We are a service. This was explained to the police and we also ran the issue by our attorneys and they agreed, we do not fall under 538.04."

The Tallahassee Democrat newspaper said there will be a hearing on the case at 10:30 this morning (http://www.tallahassee.com/mld/tallahassee/news/local/11262611.htm).

The problem comes as some states have begun eyeing eBay drop-off shops to decide if they should be regulated as an auctioneer or a consignment store or something else all together. Ohio legislators, who have passed a law that goes into effect in May, is not even sure whether the restrictions should apply solely to eBay consignment sellers with drop off stores, or all eBay consignment sellers (known as eBay Trading Assistants), or whether all eBay sellers should be regulated even if they are selling their own goods. Illinois requires all eBay Trading Assistants get an auctioneer's license (http://www.auctionbytes.com/cab/abu/y205/m03/abu0138/s02).

Debbie Gordon, President and CEO of eBay drop-off store chain Snappy Auctions, got her auctioneer's license last year because of Tennessee state regulations. She said it's all about the flow of money. The Snappy Auctions franchise operates stores in twelve states. Every time a buyer buys something from any of Snappy Auctions' eBay auctions, the money is put into an escrow account and is paid out from headquarters in Tennessee.

Drop-off stores are not pawn shops, Gordon said, because no drop-off store hands over money to the consignor at the time of drop-off. "It's very different," Gordon said, "We are not giving money on the spot. The consignor is giving us their home address where we mail them the money" once the item is sold.

Gordon is unconcerned about what the Tallahassee case might mean to her business, because, she said, she has made sure her business is in compliance and that the flow of money is structured correctly.

Antiques stores may also come under increasing scrutiny as local and state governments seem to be looking for revenue-generating opportunities. Antique Trader magazine reported that an antiques dealers in Ely, Minnesota, began receiving notices from the city requesting a $25 annual license fee for operating as a second-hand goods store. Apparently the ordinance was passed in 1994, but it was only recently the city began sending antiques dealers bills.


About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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