Tax issues

[lilfish_502]

Hi guys, I'm a card shop from China and just sold some high valued cards for over $1800 to USA.

However, when they finally arrived at destination, buyer refused to finish the tax duty for over $400 which cause the return. And we still didn't finish this problem yet.

Is there a range of free tax duty in the United States? And should I add a real value on the package or just a fake value to avoid taxes for my buyers? Is that legal?

Thank you very much!

[reallynicestamps]

I understand that Americans (I'm Canadian) have a duty -free allowance of $800.

However, he is going to be really really annoyed when he learns that when he REFUSED the delivery (because of the duty) he made his address Undeliverable.

And eBay doesn't require any refunds on Undeliverable purchases.

https://www.ebay.com/help/policies/ebay-money-back-guarantee-policy/ebay-money-back-guarantee-policy...

Here's a discussion with velvet@ebay about this.
 
This is the part I'm referring to
 
Exclusions and special coverage when the buyer doesn't receive an item


Items collected by a third party on behalf of the buyer 
Not covered


The buyer arranged their own shipping method, such as a courier pickup 
Not covered


The buyer provided an invalid or incorrect address at checkout 
Not covered

 
An ethical seller would refund the payment, less shipping costs, eBay fees, and international payment processing fees.
But it's my belief that eBay will not require any refund.
 
Hi @femmefan1946! You're correct in that a refused package is on the buyer and not the sellers responsibility to refund. As long as tracking shows the package was refused, then we would side with a seller if the buyer opened an Item Not Received claim. 
 
I agree that I would not withhold all the money, but it is up to the seller if they would like to withhold shipping, refund the buyer entirely, or keep it all. If the seller is okay with refunding the buyer entirely and being out the shipping costs, then they can cancel the transaction using the buyer requested option since in essence, they did by refusing the package. If the seller wants to retain the shipping costs, then they can message the buyer a heads up (not a requirement but a nice thing to do) and then refund them partially through this flow here. 
Velvet,


[reallynicestamps · Accepted solution]

A buyer (or seller) who will try to cheat the taxman - or in this case the border officials- will also be willing to cheat you.

I would wait until you get your product back, before discussing with the buyer how much you are willing to refund.

You might want to politely refer them to the eBay policy on Undeliverable items.

Because you are overseas, the return will take a long time

There is also a chance that rather than returning your goods, they will be destroyed or sold by the shipper.

So No Refund without Return.

[lilfish_502]

Thank you very much, that case is helpful！

[dbfolks166mt]

     For clarity and if I understand correctly the buyer paid, you shipped the item and it was sitting in US Customs? The buyer never paid the customs duty and/or refused the delivery and customs is now returning the item to you? If that is the case the information provided by reallynicestamps  is accurate and once you have the item(s) back it is up to you with regards to a refund. 

     Has eBay transferred the funds to you yet or are they on hold? Other than the refusal of the shipment has the buyer opened any type of case with eBay or done a chargeback with their CC Company? When you shipped the items what was the projected delivery date and what does the tracking information show as far as delivery? Does it show sitting in customs or does it show it has started the return route? 

     There is a scam out there that US sellers hit on occasion where the buyer will wait until the shipped item is in customs and 24 hours after the projected delivery date they will file an Item Not Received with eBay, wait for eBay to refund if you cannot prove delivery to the buyer. The buyer will then immediately pay the customs fees and pickup the item. They have their money back and the item. 

     I am not sure what the current customs/duty fees are for items coming into the US from China but you can probably Google that information. You should always be honest on the customs forms with regards to the items and the value. You did mention that this was multiple cards. I gathered you combined the cards into one shipment which may have pushed the total value of the one package above the customs threshold. Buyer may have been expecting individual packages that would have on their own remained below the threshold. 

[femmefan1946]

@dbfolks166mt 

The scam you describe is one of the reasons I believe shipping to a freight forwarder is the second safest address available.

Most forwarders, as part of their service to their overseas clients, will take care of import fees before the purchase is forwarded.

The GSP did the same, but sadly the replacement eIS program(s) don't, and sellers using those shipping programs can look forward to increased fraud.

Since the GSP was conceived as a Seller Protection program, this change is going to lead to Unintended Consequences.

I am old and cranky. Just call me Cassandra.

[safan80]

I had this exact problem with Canadian buyers over 10 YEARS AGO when I used UPS to ship a few items over  $100 years ago. Since I insured the item for their winning bid values. The buyers were being forced to pay duty fees and many refused delivery. What I had to do was disclose in every listing that international customers may be required  to pay customs or duty fees. Do mark the shipments as gifts if asked to do so. 

[femmefan1946]

Yeah-- at that time our duty and tax free allowance was $20 Cdn (about $16US).

But if we drove across the border for a day of shopping, the duty free was $200.

Plus the North American FREE TRADE Agreement.

Many Canadians had never paid a penny in duty.

Add to that, CBSA and Canada Post decided that on low value (basically under $100) imports, they would save the taxpayer money by NOT assessing and collecting import fees.  The cost of doing so would be higher than they could possibly collect.

But.

Private couriers could not legally do that.

And UPS charges $25 or more as "customs brokerage fees" if the item cost even $20.01Cdn.

So the problem was a very basic misunderstanding of import costs on the part of your customers as well as your own misunderstanding of how much more your Canadian customer would be paying, both in duty which they should have expected, and in courier fees.

Our duty free allowance is now $150 Cdn (~$100USD) and tax free is $40Cdn. 

But if you are shipping to Canada, your best bet is to use USPS First Class International Package (Canada - which is cheaper than the overseas rates). It;s the cheapest tracked international service by far.

[deltilogical]

"What I had to do was disclose in every listing that international customers may be required  to pay customs or duty fees"

Any international customer that doesn't know this is stupid.  It is a risk when tax slaves buy things from overseas.  But I have a similar tagline on my listings. 

The Govt used to be funded by duties then they decided the workers would pay the taxes, not transients and importers.

[farmalljr]

---

@reallynicestamps wrote:

I understand that Americans (I'm Canadian) have a duty -free allowance of $800.

However, he is going to be really really annoyed when he learns that when he REFUSED the delivery (because of the duty) he made his address Undeliverable.

And eBay doesn't require any refunds on Undeliverable purchases.

https://www.ebay.com/help/policies/ebay-money-back-guarantee-policy/ebay-money-back-guarantee-policy...

Here's a discussion with velvet@ebay about this.
 
This is the part I'm referring to
 
Exclusions and special coverage when the buyer doesn't receive an item


Items collected by a third party on behalf of the buyer 
Not covered


The buyer arranged their own shipping method, such as a courier pickup 
Not covered


The buyer provided an invalid or incorrect address at checkout 
Not covered

 
An ethical seller would refund the payment, less shipping costs, eBay fees, and international payment processing fees.
But it's my belief that eBay will not require any refund.
 
Hi @femmefan1946! You're correct in that a refused package is on the buyer and not the sellers responsibility to refund. As long as tracking shows the package was refused, then we would side with a seller if the buyer opened an Item Not Received claim. 
 
I agree that I would not withhold all the money, but it is up to the seller if they would like to withhold shipping, refund the buyer entirely, or keep it all. If the seller is okay with refunding the buyer entirely and being out the shipping costs, then they can cancel the transaction using the buyer requested option since in essence, they did by refusing the package. If the seller wants to retain the shipping costs, then they can message the buyer a heads up (not a requirement but a nice thing to do) and then refund them partially through this flow here. 
Velvet,


---

Mhhmmm, that may work in an eBay case. It will not work when the buyer files a chargeback with their bank/card holder/paypal and the seller ends up refunding the WHOLE amount and a $20 dispute fee. 

While eBay may say the "seller is protected", that only works if the buyer does not keep pursuing their refund. If the buyer files a case with the CC company, eBay will force the seller to refund the WHOLE thing and pay $20 for the dispute fee. eBay will not eat $1800, the seller will. The seller is taking a risk if they only partially refund a buyer in this case. They are probably going to file a chargeback and get every penny back, and the seller will have to refund everything AND pay a fee. 

Anyone who has dealt with disputes knows eBay "assures" you, you are protected. Then when the case is decided, they end up pulling your money AND a dispute fee. Sellers are never on the winning side here. 

[dbfolks166mt]

@dbfolks166mt 

The scam you describe is one of the reasons I believe shipping to a freight forwarder is the second safest address available.  This applies to eBay claims although they have waffled on that at times. If the buyer files a chargeback all bets are off since the eBay policies mean nothing to a CC company. 

Most forwarders, as part of their service to their overseas clients, will take care of import fees before the purchase is forwarded. Since the OP is located in China I am not familiar with their FF companies or their postal system so I was not sure how this worked. I do know most US based FF'ers do collect the VAT or customs fees before they ship the package onward. 

The GSP did the same, but sadly the replacement eIS program(s) don't, and sellers using those shipping programs can look forward to increased fraud. The EIS program is supposed to be working toward that goal. Maybe ironic that the contractor that is running the EIS program for eBay is a Chinese based company. 

Since the GSP was conceived as a Seller Protection program, this change is going to lead to Unintended Consequences. This is one time that the EIS follow on effort appears to offer better seller protection than the GSP did. There have been a couple of postings on this forum that indicate they are, at least for the moment, standing behind their seller protection promises. There are some areas of the EIS policy that are a bit ambiguous so we will see how well this works out. 

• When you ship internationally using eBay International Shipping, you're responsible for getting packages safely to the US shipping hub. If a buyer reports that an item was lost or damaged during international shipping or it is damaged at the hub, we'll work with the buyer to resolve the issue. You're protected from:
  • the obligation to refund the buyer
  • eBay Money Back Guarantee cases
  • payment disputes
  • open ‘Not as described’ returns in your service metrics
• Any negative or neutral feedback related to item handling that can be attributed to the eBay International Shipping program during international transit will be removed
• All international returns and refunds will be handled on your behalf
• You'll be protected against item not received claims and chargebacks

I am old and cranky. Just call me Cassandra.

[mcw1627jed]

That Does seem like a high Duty on $1800 for US

[redmodelt]

China can't do a "Google" search. Google is blocked as are a number of others we can use here in the USA. The search engines they can use may not even allow information about US customs rules to be view by China's citizens. 

[luckythewinner]

---

@lilfish_502 wrote:

And should I add a real value on the package or just a fake value to avoid taxes for my buyers? Is that legal?

---

No, it is not legal to lie about the value of merchandise in order to avoid taxes. 😞

[buyselljack2016]

Do mark the shipments as gifts if asked to do so. 

-----------------------------------------------

That may not be a good thing to do.