Declare the correct value on the Customs form?

P.S. to the above part b. - I assumed that the port-of-entry agent noticed the LP is undervalued and may not notice the 'returned goods' box was checked.  This is reasonable because Tariffs and Fraud are higher-priority issues than 'returned goods'.

This scenario is more common than one may think (I worked in this field for several years).

Again, good luck with your decision.

Listen to those who know. This is returned goods, no duty, no fraud, I've done this exact thing when I've had upgrades done with my Canadian build equipment (US to Canada shipment).

If you list value as $50, how would that bring up red flag, this is  entirely different shipment than when album was shipped to you. Does customs have xray vision and photographic memory to recall this was originally a $1200 album!

And why would you have any morality problem with the $50 valuation, in essence there is no actual goods changing hands, so duty being charged twice for goods that didn't change hands, that's extortion.

As for being fearful of customs, where is the jail for customs cheats, $1200 is relatively nothing in the whole realm of goods going through customs. If caught the worst you'd suffer is hold on package, they determine value, you pay the duty they determined, package continues on it's way.

Like many others, I’m really curious what is the name of the album and what makes it a “Holy Grail” album for you?

+1 for curiousjim 

in fact, in general we know nothing about the actual problem with the LP, other than that it might be worth $1200 to a particular collector. By the way, valuing it at $1200 solely for the benefit that might accrue if it’s lost or damaged might equally be thought of as fraudulent by a determined moralist.

And this ’holy grail’ LP is.....well, unfortunately I do not have a copy to keep yet as this copy is being returned. I will hunt another down ’in the wild’ and can then let you know.... :-)

The Seller readily agreed he was too enthusiastic with his description. The "NM" grading and writing it was "...like new..." and so on was not the case in reality. Oh well.  Previously he has always accurately graded and described his records I bought. This was a unique blip. C’est la vie!