Has buying and/or selling audio gear changed?

I have only used F&F for small purchases such as inexpensive cables. Otherwise, it's an absolutely reasonable default for a buyer to not get shanked.

Not to put too fine a point on it but: How could it possibly be otherwise?

Many do not use PP goods and services because if you recieve over $600/yr, paypal is required by law to send you, and the IRS, a 1099. that in itself isn't a problem since you probably lost money on the used equipment so you won't pay taxes.  but it puts you on the IRS radar and you are always at risk of the IRS being difficult.  everyone is afraid of the IRS.

Whether a seller buys insurance is frankly, none of your business.   The seller is responsible to deliver an item intact and if not, remunerate you.  They may buy insurance if they think it is a good business practice (it isn't) or just choose to take responsibility themselves (aka self insure).  you asking them to buy insurance is meddling in their business and frankly stating that you don't trust them to be financially responsible.

Jerry

If you use PayPal friends and family and the equipment is bad, good luck trying to get your money back and I speak from experience. I always use it the right way and pay the 3% fee that the cheapskates are trying to avoid. Why use F&F just to save a few bucks, unless you are the gambling type?

Agree, if he’s a "well known individual " he makes money at this. No reason he should insist F&F .... I would pass

Agreed a well known individual sounds like a dealer or manufacturer also the 1099 thing is inaccurate that rule has been delayed yet again the threshold is still like $20K,

"Many do not use PP goods and services because if you recieve over $600/yr, paypal is required by law to send you, and the IRS, a 1099. that"

- This will not take effect for this years taxes. Implementation has been delayed. 

 The seller is responsible to deliver an item intact and if not, remunerate you

once you paid, the seller can ship, not ship, ship 2 broken pieces, ship with via a donkey, etc. S/he can: I shipped it, it worked, the rest is your problem. As it is then.

I've noticed many more sellers insisting on F&F, but I wouldn't say it's the new standard. Dunno if it's because of the tax issue or he's worried about buyer claims. Of course it allows the seller to be a little shady also.

If he wants to use F&F, power to him. You both have choices. However, if PP wants to be a D1ck, they can remove the F&F function from an account

Insurance seems to have gotten more and more expensive, but I would think he'd

at least give the buyer the option to pay for it. Heck, even getting a signature on delivery cost 6 bucks

If  you have your receipts and you take a loss on selling something, you can also deduct that loss on your taxes

Thank you for all the responses as it is very helpful to me to learn current trends.  I usually keep my equipment 5+ years so I don't buy and sell often.  To clarify, I was willing to pay all the PP fees for this service so the seller had no financial impact on me choosing Goods and Services vs F&F.  The price of the item was $1K+ so it wasn't a something that was just a couple hundred dollars that I was willing to take a risk with and wouldn't be out too much money.  I also heard the IRS $600 limit has been postponed until 2025.  I agree with Carlsbad2 that I can't make a seller buy the insurance and I probably would have let that slide if they agreed to Goods and Services as that would at least give me an avenue to go down if the item was damaged during shipping.  I just thought it was interesting that the seller wouldn't even negotiate on Goods and Services which puts all the risk on me as the buyer.  Sadly, I'll probably have to pass on buying this item instead of pressing my luck by using F&F and hoping the transaction goes as planned, which is a bummer for both of us.  Again, thanks to everyone who chimed in.   

@dill  Do you have a reference?  I'm hearing lots of rumors but paypal's website still says $600 in 2023.  I'm not saying you're wrong, I'm saying that I'm getting conflicting info.  thanks.

https://www.paypal.com/us/cshelp/article/will-paypal-report-my-sales-to-the-irs-help543

I think this explains it carlsbad2.

IRS $600.00 Threshold

Thanks.  So that says that for 2023, the limit is $20,000 and 200 transactions.  Could be an issue for ebay sellers, but supposedly they are selling to make a profit, so indeed they do pay taxes.  

In 2024, the limit goes down to $5000, so that will affect a lot of audio equipment.

Jerry

Walk away from those who don't take 'normal' Paypal and don't fully insure. Price doesn't matter, no business period.

What difference does it make if it's $20,000 or $600 if you are not making a profit it shouldn't matter.

@invalid Did you read my post?  Nobody wants to deal with the IRS.  People don't want to have to show that they didn't make a profit on it.  Many of them don't have a receipt for the original purchase and are afraid to be put on the spot, etc.

BTW, in the past 2 years, after speaking with the sellers, I have twice used protectionless payment (like friends and family)  to pay for 2 transactions totaling $17k.  It is possible to just avoid being a victim.

Jerry

@carlsbad2  you always had to deal with them, there has always been a capital gains tax for this stuff, the only difference is a paper trail now. What is the difference? You would still have trouble if you put the money in the bank from a sale previously if audited. 

What difference does it make if it’s $20,000 or $600 if you are not making a profit it shouldn’t matter.

@invalid  You’re right, it doesn’t make ANY difference - and many audiophiles are showing how poorly they understand the tax code.

I’ll probably be over the 20K limit this year, but none of these transactions turned a profit, so at worst I’ll just be filling in a basis cost for all my sales. The crypto was much harder to work out (on the accounting side), when that hit.

I don’t personally agree with railroading buyers into F&F payments. If I want something bad enough, sure I’ll take the risk and do it, but as a seller I do not require F&F payments. I always insure my shipments anyways. It’s bad seller etiquette to do otherwise.

Hi @carlsbad2 

Just curious, is there a $ limit on Friends And Family?

Thanks.

As a seller, I don't accept F&F either. But I always kind of absorb paypal fees and shipping charges and insurance, I might just slightly increase the price I would agree to.  Shipping before even depositing a check would be great in ideal world. I am sorry, I am not rich and wouldn't do it.

@curiousjim Not that I know of.  $9k is most I've done.  

@viridian I think that is good insight.  In addition to the disenchantment, I think most of them didn't understand it.  Even the paypal website has it wrong (as I posted above and was corrected with an IRS link). 

jerry

@viridian I bought my first set of "good" speakers on AudioMart.   It was from a guy in San Francisco (about 400 miles away).  We met at a gas station on I-5 in the middle of nowhere, in the middle of the winter with 40 mph winds, it seems like the surface of Mars.  We loaded 2 person-sized boxes into my truck and I gave him 22 Ben Franklins--a lot of money back then.  M3si's.

Jerry

Another source: IRS Delays Tax Rule for Online Sellers—Again - WSJ 

Based on the responses to my post, it appears sellers have 2 concerns with G&S:

1. There is a perceived bias towards finding in the buyers favor if a complaint is filed against the seller using PP G&S.
2. The seller is concerned with potential IRS compliance and possible taxes on gains realized from the sale of audio equipment or proving there were no gains.   

That helps me understand why the seller is reluctant to use G&S.   I appreciate the feedback. 

Carlsbad2, you mentioned that you have done a couple transactions using F&F worth over $17K and you stated that it is possible to avoid being the victim.  Do you mind sharing the steps you took that allowed you to be successful in not being the victim?  Obviously, calling and talking to seller is a step as well as email communication but personally, I'm lacking the same confidence that those steps will help much if the seller wants to exploit the situation when a buyer uses F&F and has no foundation from which to stand on if the seller fails to uphold their end of the bargain in the transaction.  As I stated, I don't conduct a lot of buying and selling so I'm trying to learn from others who have more experience in this area.  I appreciate the feedback and discussion.   

@invalid I disagree.  In  the past, if you sold a personal item, not for a gain, you didn't report it.  Now, since there is a 1099, you have to deal with it.

This entire discussion goes back to the “buy the seller” concept. Do some due diligence, ask questions, look at feedback. F&F has become more a standard now as PayPal has implemented several new “security” policies that hold money, cause problems with transaction timing etc. Frankly, it is making PayPal less and less attractive to use as a whole. I use F&F now as a seller, I have deep feedback, all positive. If a potential buyer is not ok with that, that’s fine. I generally buy with F&F as well, unless I want to finance the purchase in some way. Then I usually negotiate with the seller at some level. Regarding insurance, as mentioned that’s on the seller. If the item gets lost or is DOA due to shipping damage, that’s on the seller. Their loss if they didn’t buy insurance. Postal insurance is a money grab, it rarely pays out if there is a problem that is shipping damage related. EBay’s systems are an exception. They do a pretty good job, oddly enough.

1st Post, alrighty then,

You have clues not to buy from that seller. I simply do not like giving money to someone I don’t trust or like. IF unique, well, how to get it?

I suggest you offer to pay the extra (3%?) for the PayPal Goods and Services fee.

AND, If seller buys insurance on your behalf (again, you pay), be aware, the insurance is in seller’s name, you have to take damaged item to agent’s local office, they have to agree damaged, then seller has to make the claim, be successful, then give you the refund.

..........................

USP Pack and Ship

One option for anything, (and if you buy from someone like this) is to use UPS Pack and Ship. I’ve used it a few times successfully. You do not pay seller any shipping cost.

Using seller’s zip code, find UPS Pack and Ship store nearest him (all locations are not pack and ship). You get size and weight from the seller (or online search). You call UPS, get estimate for them to receive unboxed item(s), box, ship, they are responsible for any damage.

Next: seller simply drops unboxed item(s) at the designated UPS Pack and Ship near them , with your name on it. You pay UPS directly, all is in your name. Seller walks away. Note: you want many prior photos showing condition of item(s).

UPS gives you final cost, a bit less or a bit more than the estimate based on their own weight/size measurements.

NOTE: for anything ’local pick up only’, this can be a way to get something, seller just drops it off for you. I’ve done that also, except one stubborn coot in Canada. (UPS Canada has Pack and Ship to USA)

Never ask the seller to buy insurance.  Now you're sharing in the responsibility for safe delivery.  It is fully the seller's responsibility.  Leave it that way.

Occasionally I see sellers saying that insurance is the buyer's option.  I usually respond that it it up to them.  If they are one of the sellers that states "not responsible for uninsured shipments" I generally move on.  not my job to try to set them right.  Also this statement indicates they've had problems before.

Jerry

I am one of those guys who hates to dicker over price.  If I want an item and I think the price is ok, I am interested.  If the price is high to cover lowballers, I am not interested.  So, I am a great buyer.  However, I will never, never purchase any item through friends or family or any manner that takes away my recourse for fraud, damage, or poor quality.  If they do not take PayPal full I will not talk to them.  60 years in retail has shown me to never trust anyone I do not have experience with.  Always cover all the bases.

Let me tell you.

the way I see it -- it really did, because I donno what F&F heck means and I also sold quite a few pieces of the gear and media here and around the web internationally and domestically.

Also is PP and PayPal the same or PP is the one you use to discharge urges??

If anyone knows any other new acronyms, please post in response.

THANKS!

@czarivey here is the info you requested:

PayPal is abbreviated PP

PayPal Friends and Family is abbreviated PP F&F or just F&F

PayPal Goods and Services is abbreviated PP G&S or just G&S

F&F is free and is giving or receiving funds among trusted parties. 

G&S costs usually 3 to 3.5% and is for giving or receiving funds as a business transaction which allows both parties to file a claim if something goes wrong. 

I’d only use F&F feature during face to face cash-less transaction merch -- in money out. Otherwise G&S, coz I donno u period and if not bye bye have a nice rest of days.

I refuse to use Paypal as a whole now its just not safe anymore for the seller, waiting for your money, issues with returns, returns not what you sent them, fee's etc. I've come to the point i wont ship until the money is in my bank account. on more costly items anyway. 

I also always pay for shipping when a buyer and demand shipping insurance ( that I pay for) even though it only covers loss its cheep enough that on higher priced items its worth it. Insurance also makes the shipment require a signature so no dropping on your door step, to be stolen. I also find with insurance the packages seem to arrive in better condition, and with out hidden fees. 

For those of you who say "paypal goods and services of hit the road", what do you do if they don't take paypal?

@glennewdick I had a coin business for years.  In the coin business we have a saying that insurance stickers mean "steal me".  Most coin dealers on expensive packages do not use insurance but instead pay for signature confirmation.

Jerry

For those of you who say "paypal goods and services of hit the road", what do you do if they don't take paypal?

@carlsbad2 , as you may've noticed the ENTIRE world is divided by 2 very easily distinct parts: one part can and the other cannot...

I thought coin dealers/collectors never bite on e-commerce at all. I do have diamonds and fine watches, but would unlikely deal with neither paypal nor even cashapp. The very best I've ever done is accepting personal checks and sending items after clearing. Normally, if I'm acting with client distant from me, i'd find an escrower that can communicate via facetime or any video conversation and do it that way. This is how you develop trust pretty much by involving people instead of trying to mingle with monstrous morons from PP or PayPal with FrenchFries and other funky menus. 

Using F&F can mean a fee from your credit card company.

Happened to me with Bank of America.

Bye, bye, BofA.

F&F, never again.

I have bought and sold coins on eBay for over 20 years.  The cost of PP is baked into the purchase price IMHO.  I would Never use F&F as it is too dangerous.  High ticket items >1,000 in my case go signature confirmation and registered mail if being sent to a grading company.  
 

I have never had a big deal go bad and my total sales approach 150K.  I am Not a professional dealer, just a knowledgable enthusiast.

Trust, but verify is my motto.  Among my dealer friends, personal checks are good that day on in person sales at coin shows.

F&F is no more an "industry standard" than is under-declaring value on import goods. It is not an acceptable term for closing a business transaction.

Insuring product in transit is also expected.

I have to admit, I didn’t even realize you could do F&F payments via credit card, until this thread. That seems - rife for all manner of schemes, scams, and abuse 😅

Using F&F can mean a fee from your credit card company.

Well that makes sense - of course PP is not going to set themselves up to lose money on the transaction. Did you mean your CC charged you an additional fee on top of Paypal’s for a F&F CC payment?

I'm definitely not a fan of our over-complicated tax code. Sometimes it feels like criminals and unscrupulous characters can get away with things all day, but if I don't dot all my i's and cross every t, they'll nail me to a cross.

Did you mean your CC charged you an additional fee on top of Paypal’s for a F&F CC payment?

@mulveling ​​​Yes, extra fee from BofA of $27 (ballpark memory/trauma) on a $500 purchase.

Why give your hard earned money to someone who you don’t know if they’re going to ship the item or not, if it will get damaged in transit or not, and you have no recourse to reclaim the money you paid?

No FF is for non credible sellers. End of story. 

when we signed up for PayPal we agreed to pay them a fee for their service. Going to F&F cheats PayPal out of what you legally owe them for using their service. In other words, using F&F is dishonest.

Many have all sorts of rationalizations why it is OK to do this,  but the bottom line is it is stealing from PayPal. There are other ways to pay for things than cheating PayPal. 

If someone is comfortable being a dishonest thief and has no problem cheating PayPal, I have no desire to do business with them. 

I try not to be dishonest for monetary gain or to avoid monetary loss.  

I don't use F&F unless it's someone I trust and NEVER a complete stranger! I make that very clear to them upfront! Why give up all my protections with PayPal. I'd rather purchase from someone else.

The PP F and F  is for ensuring monies are easily made available to others, it is not a Sale Transaction. 

Hence  once a payment for goods is made, there is no sopport from PP when a discontented buyer makes a complaint. 

I bet there is not a Case of a Vendor receiving monies from this method of Transaction having attempted to makie a case via PP about a sale outcome..

PP F and F, is the ideal one way loaded protection for a Vendor.