Consumer Tips

Consignment Sales

TO HELP YOU UNDERSTAND THIS TYPE OF BUSINESS THE BUREAU PROVIDES THE FOLLOWING INFORMATION:

What would happen if the business sells your merchandise and you don't receive your share of the selling price?

YOU may end up losing your PROPERTY and the MONEY from the sale.

Consignment sale dealers must rely on being able to sell your goods at a price that will provide you with the money you expect, pay their expenses, and still leave them a profit. If they are faced with financial difficulties, they might use the money for purposes other than paying you.

PROTECT YOURSELF BY LEARNING HOW CONSIGNMENTS WORK:

The risk when you consign your property for sale is very real. You are giving something valuable to a stranger; trusting them to hold it and sell it for you.

1. Find out about the consignment sale dealer.

- How long has the consignment sales dealer been in business in your area? In other areas?

- Is the dealer properly licensed? Call your local municipal business license office to find out.

- Is the business limited to only consignment sales or does the business also sell its own inventory?

- If you are selling a vehicle, ask if the dealer is a member of an industry association such as the Recreation Vehicle Dealers Association of B.C. or the British Columbia Automobile Dealers Association of B.C. Then check out the dealer with the Association.

- Call the Better Business Bureau to get the dealer's reliability report. Ask people you know you can trust for recommendations.

2. Establish what you expect from the sale and what the property is worth.

- Get independent estimates or appraisals.

- Check the classified ads for the price of similar items.

- Comparison shop. To find the best price, visit stores selling similar goods.

Again, when you decide to sell your property on consignment, you should know the amount you expect to receive from the sale.

REMEMBER THE CONSIGNMENT DEALER NEEDS TO MAKE A PROFIT ALSO.

3. Get a written agreement.

For all consignments there should be a written agreement so that both you and the dealer know what to expect. The agreement is a contract and each party has rights and responsibilities.

Some things you should look for in the agreement are:

- A full description of the property being put on consignment:
i) the make, model, colour, size, serial number, or
ii) for art work: title; medium; size; framed/unframed, and
iii) any other descriptions.

- The amount you expect to receive from the sale and the amount or percentage the dealer will receive.

- What the consignment dealer is going to do to sell your item.

- What the dealer is authorized to do on your behalf without notifying you, and what the dealer needs your prior permission to do.

- A specific written agreement on:
i) who is to pay for any work or repairs done to the property,
ii) who is to pay any shipping or delivery costs,
iii) who pays for lien checks and,
iv) importantly, who is responsible for paying for insurance against theft or damage to the item while it is on consignment.

- Time limits are crucial to any agreement:
i) the agreement should state the length of time the dealer has authority to sell your item and,
ii) if your property is sold, when does the dealer have to pay you your share?
iii) both you and the dealer should date and sign the agreement.

4. After you consign your property, be sure to keep in contact with the dealer.

Visit the dealer's location often, to confirm your property is there. Find out what the dealer has done to sell the item. If you are asked to accept less than the agreed amount, ask to see the purchaser's offer before you make a decision. Be sure you're confident of the value of a trade-in before you accept a trade instead of money.

5. Do not forget, if you borrowed money to buy the item, when it's sold you must repay the loan to have any lien discharged.