Hattons Buy-Back List

[Nick]

Direct copy from the tax Man!

VAT margin schemes tax the difference between what you paid for an item and what you sold it for, rather than the full selling price. You pay VAT at 16.67% (one-sixth) on the difference.

You can choose to use a margin scheme when you sell:

Just to add some clarification in potential defence of Hattons. The key words in the above are "You can choose to use". A seller doesn't have to do so. If they choose to do so, the choice brings along with it some fairly stringent record-keeping requirements around maintaining item-by-item stock lists and copies of sales and purchase invoices for each item. Together with paperwork complications if you buy from a dealer.

One possible pitfall that comes to mind would be when someone rolls up with a box of sundry stock and you want to say - "I'll give you £50 for the lot". It looks to me as if you would need to price and invoice each item separately.

Fine if you're selling cars or Ming vases, but potentially onerous and costly if you're selling N gauge wagons for a few quid each.

Moving on:

Good point Jason. It is important to note that prices as displayed by a retailer, second hand or brand new, are all legally classed as offers to treat:

There's a bit of confusion here about terminology. There's no such thing as an offer to treat. It's an invitation to treat.

An offer is a very specific part of contract law. For a contract to be valid, there must be a offer, an acceptance and consideration (i.e. a fancy word which very roughly means payment).

Back in the 50s or possibly 60s, there was a well known legal case concerning the purchase of an item from a shop, which I think had been marked up incorrectly. (Sorry, it's 40 years since I studied this case, and I can't remember all the details.) The case hinged on whether putting the item out on display constituted the shop making an offer to sell the goods. If so, the deal would have been done when the customer accepted that offer. It was held that that wasn't the right interpretation.

Instead, the display of goods generally constitutes an invitation to treat. Basically the shop is saying to its customers: "Would you like to "treat" with me to buy this item?" (In this context "treat" means "negotiate for" or "bargain over".)

The offer is made by the customer rolling up to a sales assistant and saying "I'd like to buy this fur coat at the price marked on it."  Or indeed at some other price. The shop can then decide whether or not to accept that offer. In general, they can't be compelled to sell the item.

A minor point, but it has from time to time had significant implications in the courts.

[daffy]

Thanks for the clarification Nick.  It is easy for the layman to use words that seem interchangeable but are in fact distinct in law Thankfully the quotation I gave used the correct term, while I was using the term Jason had used in his post merely for continuity. Mea culpa.

[Nick]

No worries - I just  thought it was worth explaining in a bit more detail. It's confusing when words in common use have specific legal meanings - especially if the difference is only subtle.

[Ian Morton]

Back on the secondhand front - an individual item which can be turned around quickly will see less of a markup by the dealer than a collection of assorted gubbins - some of which may be slow to, or even will never, sell.

You see this in auctions too, the good stuff is mixed in lots with less desirable items to (hopefully) drag the overall price realised up.

[Rabbitaway]

Nick

I would suggest your point on the need for robust record keeping is not a valid defence for large retailers charging significantly higher levels of VAT than the tax rules allow for. Therefore costing the UK customers more.

These type of retailers have advanced stock control systems that can track items therefore manage the data required.

As VAT is money in then money out there is little ensentive to pass this saving to customers.

It is just plain poor customer service in my view particularly considering they are making second hand items a significant part of their retail offer

In one way it could make business sense to apply this scheme as their selling prices could be more competitive or improve their profit margin. I personally will just not buy second hand from this type of retailer for this reason and excessive prices even if they are willing to take offers

[Nick]

Your prerogative entirely.

I was merely pointing out that operating the margin scheme has administrative requirements that have to be supported. Doing so costs money, possibly in acquiring additional software facilities, certainly in administering and controlling them. Sadly, most of us know that retailers' stock systems are frequently more precise than accurate - I've had two orders bounce in just the last two or three months because the line turned out be out of stock when order picking came around. And that's when all they're trying to do is track how many of a product are at hand, not the individual history of each separate item. I doubt I'm unique. 

Given all that, it doesn't really surprise me that a business might decide that the extra cost and complexity wasn't worth the potential benefit of reducing retail sale prices by what can only ever be a few pounds on locos and rolling stock. Less, if they load the extra costs directly onto secondhand prices, as they should.C'est la vie.

[daffy]

I have to agree with you @Nick as we are dealing with human nature, which, when mixed with business, is a potent driving force.  Many business will almost always take the easiest, often seemingly cheapest route, and if it flouts a bit of tax law or puts a price a bit high on the way, well, perhaps it won't matter.  Well, it should and does to we buyers but.......

And as for automated stock systems, they rely on human input or output at some point  - poor stock checks, bad data input, similar things in wrong bins, broken items, pilfering, et al - so can be inaccurate leading to the types of order bounces you are certainly not unique in experiencing.

Or to bring out an old adage - garbage in, garbage out.

[railsquid]

For those ordering from outside the EU - Hattons deduct 20% VAT from their pre-owned prices but Rails of Sheffield's eBay store does not.

I know, I know...