Collectible items damaged in international shipping. Liability?
February 24, 2015 4:34 PM   Subscribe

My fiance sold and shipped some very expensive, heavy, one-of-a-kind electronics to an online friend overseas. They were damaged during international shipping. The purchase price was over a thousand dollars and the items are literally irreplaceable. Who is legally liable here? What are the ethics? We *cannot* afford to reimburse this expense.

I've never sold anything online myself, so I don't know how this situation should be handled. We live in the US, the buyer in another country. Payment was accomplished via Paypal many months ago. My fiance only recently shipped the items (they are friends, he's a procrastinator, and the buyer didn't mind). The bank account that was attached to my fiance's Paypal account was closed quite awhile ago. The deal wasn't done through eBay or Visa or any other vendor with consumer protections, only Paypal is involved. My fiance offered to insure the items for the full purchase price, which the buyer declined to pay for.

My fiance is firm in insisting it was the buyer's responsibility to pay for the insurance. He is willing to lose the friend over this matter. If we were flush, I'd want to make it right regardless of fault. But we cannot afford to reimburse this, as we live paycheck-to-paycheck and the money the seller paid was spent months ago, when we got it.

I am primarily concerned about protecting our assets. Is Paypal going to come after us for this money if the buyer opens a dispute? Or has enough time passed since the payment that we're probably OK? Is there any risk that we would be sued or at risk of garnishment? Does the fact that the sale crossed international borders come into play at all here?
posted by Rach3l to Law & Government (16 answers total)
My fiance offered to insure the items for the full purchase price, which the buyer declined to pay for.

Is this in writing somewhere?
posted by phunniemee at 4:42 PM on February 24, 2015 [4 favorites]

Best answer: My fiance is firm in insisting it was the buyer's responsibility to pay for the insurance.

And, as someone who sells a TON of stuff online, he's right here 100%. Especially since he offered and the person was too cheap to pay it.

If they were willing to buy something this expensive, but didn't want to insure it, it's 100% on them.

Is Paypal going to come after us for this money if the buyer opens a dispute? Or has enough time passed since the payment that we're probably OK? Is there any risk that we would be sued or at risk of garnishment? Does the fact that the sale crossed international borders come into play at all here?

1. no, see 2
2. yes
3. no
4. no

Paypal has a limited time window to open a dispute. It's 20 days right now. If they paid with a credit card, it's MAYBE 120 days.

The worst case scenario here would be your friend paid with a credit card, files a chargeback, and it gets debited from the closed bank account. Then you have an overdrawn closed account on chexsystems and will get blackballed from opening new bank accounts potentially.

Realistically, 20 days have gone by. The person will likely go to paypal if they're that upset and try and file a claim and get the "lol sorry" message.

You're more than likely safe, unless they paid with a credit card. And then you're more than likely safe unless they know about the byzantine process of filing a chargeback with their card company AND dealing with paypal through that, in which case you can still challenge it on paypal and can still win. They'll basically want proof you sent it and that they received it. If you go "i sent it, here's proof" and he goes "i received it, but it's smashed!" they'll go "so you received it" and your friend will go "yea but-" and they'll go "ok, both parties say it was sent and received, what's the problem here? should have insured it".

Now, paypal sometimes screws this kind of thing up, but you're pretty far in to the green by having actually sent it, them acknowledging they received it, and them declining insurance. Paypal has a LOT less protections that ebay with regards to "item not as described" and damaged stuff. They'll likely get bored at that point.

I've been on the buyers side of a similar situation more than once. I've gotten my money back if i simply never received the item and they had no proof(like, no tracking number or photos etc). I've never won when they did.

And really, don't feel bad for this person. They were offered insurance and thought it was a waste of money. You are not insurance, and this should not be your liability.

This, by the way, is why i don't touch transactions like this with friends. $20 boombox in person i don't care about? Sure. $1000+ laptop, or audio gear, or whatever? shit always creates awkward situations and animosity.

They don't DESERVE the money, and you shouldn't feel like you have to give it to them just because this sucks. That's just the cool girl sort of attitude talking. Don't let them make you feel guilty.
posted by emptythought at 4:56 PM on February 24, 2015 [5 favorites]

By the way, my asshole suggestion if i was in this situation would be to stall until they were for sure outside that 120 day window if they aren't already.

Yes, i'm an asshole, but this is not your problem and they shouldn't be able to hold that thumb over you.
posted by emptythought at 4:56 PM on February 24, 2015 [2 favorites]

Response by poster: I wasn't aware of a specific time limit for Paypal disputes. The delay wasn't intentional by any means, but luckily we are well past the quoted timeframe. Further, I'm aware that a bank account closed months ago would reject incoming debits, so I'm not worried about the chargeback avenue.

I'm not so comfortable with the ethical ramifications of doing nothing. But it seems that we have no legal responsibility. And we're not flush (or even half-flush), so paying the seller anything more than a token amount would be a non-starter. In fact, paying a token amount might indicate that we accept liability for the problem, and I'd prefer to leave that can of worms firmly closed.

Thanks for allaying my fears! We will be having a long discussion before embarking on any similar future sales, for certain. This was all set up before I commingled funds with my fiance; I had no say in the matter at the time of the original arrangement, I'm just doing my best to cope with the fallout now.
posted by Rach3l at 5:38 PM on February 24, 2015

The general legal principle that governs this type of issue (in the US; I am entirely unfamiliar with non-US law) is risk of loss.

Ethically, I think your fiance is entirely in the clear - he offered to purchase insurance (at the buyer's expense). The buyer declined the insurance, but wanted to go ahead with the sale. Thus, the buyer assumed the risk - if the buyer did not want to assume the risk, the buyer could have either paid for insurance or said "No thanks, I'm not willing to assume the risk & I'm not willing to pay for insurance, so no deal."
posted by insectosaurus at 5:39 PM on February 24, 2015 [6 favorites]

To me it depends if the damage was due to normal handling of an improperly packed item (i.e. it was damaged by rattling around a too-large box with minimal padding), or if the damage was above and beyond what a reasonable shipper could anticipate (i.e. the box was run over by a truck). Even in the first case, the buyer should have insisted on insurance and, to me, your fiancé is in the clear -- though there is some grey area there. If it's the second case there is no way your fiancé is responsible. Tell the buyer to take it up with the shipping company.
posted by Rock Steady at 6:13 PM on February 24, 2015 [1 favorite]

I'm surprised so many people are saying this is a done deal in your favor.

If the buyer opens a complaint, be prepared to lose. It's not outside the realm of possibility that the right person at PayPal will sympathize with the buyer and you'll end up with a hassle on your hands.

Honestly, the only thing you can do at this point is to have everything documented and ready to go in case PayPal asks for your side of the story.

This is also a great opportunity to learn that if you can't afford to replace something, build the cost of insurance (it's pretty cheap) into the price of your item. Also if something is valuable enough and literally irreplaceable, there are more reliable (albeit usually much more expensive) methods of shipping.
posted by paulcole at 6:23 PM on February 24, 2015 [1 favorite]

Was this transaction done as a favor to the friend or was there profit or compensation for effort involved? To me, if fiance did a favor and purchased at cost and shipped at cost with buyer refusing insurance, you are in the clear ethically. I don't know that it changes with profit except if your fiance was acting as a business, it seems as if he might have more responsibility although the buyer turning down paying for insurance means a lot. When fiance checked cost of shipping, why not just included the cost of insurance? I know that is water under the bridge, but next time...
posted by 724A at 7:01 PM on February 24, 2015

As an aside, do you have any proof the item has indeed been damaged?
posted by ddaavviidd at 9:12 PM on February 24, 2015

If somehow PayPal sides with the buyer, the fact that your bank account is closed would lead them to forever ban you from PayPal until you paid them back (and they would likely send you to collections as well). As others have said it sounds like it's outside the timeframe for that, but if they made an exception it could affect you. PayPal's "buyer protection" and "seller protection" are mutually exclusive. It seems pretty clear from the way their programs are structured that only the buyer OR the seller will be protected. PayPal will never pay back a buyer without extracting money from the seller.

What happened to the items? Are they worth more than $0 in their damaged state?
posted by reeddavid at 10:34 PM on February 24, 2015

Did they definitely do the transaction as a sale vs sending money to friends and family? If they did the latter (it save Paypal fees) you're totally off the hook.
posted by oneear at 11:46 PM on February 24, 2015

paulcole is right. Unless you received the money as a gift, PayPal is not likely to be kind here. In their view, the shipper is the one who assumes the risk of not using insured shipping methods.

The deadline to open a PayPal dispute is 180 days. It doesn't matter if it was a credit card, bank account, or PayPal balance that funded it.

The answer you have highlighted as best here doesn't make a lot of sense, starting as it does with the claim that the seller is in the clear if the buyer declined insurance (absolutely not the case, ever, with PayPal) and going on to mention successfully recovering funds when the seller couldn't cough up a tracking # etc. If the first part was correct, the second part would not be. Here is a page with an answer from PayPal about this sort of thing.

My understanding is it goes off to a collection agency like any other consumer debt.

Ethically I side with you if your fiancé made no profit from this and was doing a favour for a friend. The friend should not have cheaped out on such a critical part of a big purchase. (If there was any mark-up involved, that's much murkier; fiancé then had more obligations to handle it as a sale rather than as a favour.)
posted by kmennie at 2:47 AM on February 25, 2015

Yeah, the idea that you are off the hook simply because the buyer declined to pay for insurance is not correct. I'm not going to predict how Paypal would rule if a dispute is filed -- too many factors involved for me to know. But, it was crazy to send such an expensive item without insurance, whether or not the buyer wanted it. Insurance should have been built into the cost of shipping, with no choice to opt out.
posted by the bricabrac man at 4:17 AM on February 25, 2015

When SELLING online, it is the responsibility of the seller to ensure that the item arrives to the buyer intact. Was this an online sale as in your fiance has an online store or ebay store or something and this person (who just happens to be a friend) purchased the item as a buyer? If yes, then I feel that ethically it is your fiance's responsibility to refund the entire purchase (upon receiving proof of damage). This is a lesson all online sellers must learn, unfortunately in your situation it is going to be an expensive one. If you ordered something from amazon and it arrived damaged would you be like, "oh that sucks, oh well!" or would you want your money from amazon? Paypal will side with the buyer if this was done as a sale through paypal.

Now, if this was a favor between friends and payment was made as sending money as a gift or sending money to friends then I would say it is the friend's responsibility for not also purchasing insurance. Paypal will side with your fiance in this situation because they don't get involved in disputes between friends.
posted by magnetsphere at 7:44 AM on February 25, 2015

The shipper is on the hook, but the shipper can file a claim with the carrier who handled the package to try and recoup costs. The carrier can review the claim and decide if they will reimburse the shipper or if they will not due to the damage benig the shipper's fault (i.e. insufficient packaging). To have a chance at the claim being paid, you would need pics. They may tell you to go pound sand since you declined insurance or you may still have a shot without insurance but at a capped amount (usually 50 or 100$).

TL;DR - Refund money to buyer. File a claim with the carrier.
posted by WeekendJen at 9:43 AM on February 25, 2015

As far as I understand things (and from my own experience with international shipping US-UK), the recipient can't file a complaint with the shipping company for damage, the sender has to do that. Is it possible that you could at least try to work with the friend to do what you can? Like, have him take photos and send you documentation of the damage, etc.? Because (unless I'm wrong) - there is literally nothing he can do to get compensation from the shipping company but there is something you can do. And the shipping company often covers damage up to certain amounts automatically, and if it can be demonstrated that the damage was their fault then it might not be about insurance, but about the shipping company making good the loss incurred due to their actions (in either case, there is probably a cap unless you specified the actual value of the goods when shipping them). It seems like the good-faith thing to do would be to do what you can to help this person get their money back through the shipping company (from one perspective) or get your money back in order to reimburse the friend (from another perspective).
posted by you must supply a verb at 11:38 AM on February 25, 2015

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