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EcommerceBytes-NewsFlash, Number 1109 - September 16, 2005 - ISSN 1539-5065    1 of 6

eBay Drop-Off Store Loses Legal Motion in Compliance Case

By Ina Steiner
EcommerceBytes.com
September 16, 2005




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On September 8th, a judge ruled against the Drop Spot, an eBay drop-off store located in Traverse City, Michigan. The store had filed a motion to dismiss charges brought against it for failing to comply with state statutes regarding second-hand dealers, which requires the fingerprinting of customers.

Owner Steve Swaney told AuctionBytes last month that he and his lawyer, Jim Aprea, believe the statutes do not apply to The Drop Spot because the business does not purchase the items dropped off by customers. Instead, The Drop Spot sells the items on eBay on the customer's behalf (http://auctionbytes.com/cab/abn/y05/m08/i29/s01).

This week, Swaney said he will not continue to fight the charges due to the expense involved. "At this point we have spent $5,000 on legal bills and do not feel it is in the business' best interest to continue to fight the case. We have been open for 11 months, and spending another $5,000 to $10,000 on legal bills will simply not help our finances."

While Swaney said he feels stores like his should be regulated, the statute that prosecutors say apply to his store was enacted in 1917 and applies to pawn shops, not eBay drop-off stores, he said.

Swaney feels he was targeted by a local pawnshop that he says made the initial complaint about his store. "What I found interesting is the arresting officer was part owner of the same pawn shop just three years ago," he said.

Swaney said his lawyer was able to speak to eBay's legal team but was told the company could not get involved in individual cases.

The Drop Spot began fingerprinting customers to avoid future arrests, which Swaney said had been threatened. "We are hoping to get a delayed sentence to show compliance (which I don't agree we legally need to comply with) to have the charges dropped. I would like to appeal the ruling and take the matter before the circuit court, but we simply do not have the resources to do so."

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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