refund dilemma

[dave mcgowen]

I have sort of a dilemma in whether a refund is warranted or not and am seeking opinions. Here are the facts/time line:

I was contacted on August 3rd by a potential buyer concerning a 100% het. pair of Albino Balls and the possibility of making payments towards them.

On 5 Aug we agreed on a price of $350 shipped and that the buyer would make payments via paypal to be paid off by the end of September.

On 7 August the buyer made a $80 payment.

On 16 August the buyer made a $75 payment.

After not hearing from him for over a month, buyer responded to my contact on 01 OCT with apologies and a promise to make a payment that coming Friday.

After not receiving a payment I again inquired on 06 NOV, he replied on 14 NOV with apologies and a promise to pay them off on Friday or Saturday.

On 22 NOV the buyer sent me an email stating "go ahead and sell them".

10 DEC the buyer requests a refund of $125 (total amount paid less $30 for my trouble).

So obviously my question is: is a refund warranted? I was inclined to offer him a credit for/towards anything else I have available this or next year. A few people have told me that they do not believe a refund is warranted due to his default. We never worked out finer points of out transaction (like default), perhaps a mistake on my part. I pride myself in being an honest member of the herp community and want to do what's right, however, I feel as though I am being taken advantage of here. The snakes were basically taken off the market for over 3 months and would likely have been sold if not on hold. Again, second opinions would be greatly appreciated. Thanks, Dave McGowen

 

[Casey Hulse]

You also housed and fed them for 4+ months, at $8 per month for food alone, you are getting nothing for "your trouble". I think a 10% non-refundable deposit, then care costs would be reasonable. I would offer to refund the difference.

 

[SPJ]

Here is an excerpt from my TOS.

Short-term payment plans can be arranged with a 25% non-refundable down payment to take the animal off the market. The down payment must be made using Paypal to insure the hold on the animal. Payments must be made on agreed upon date(s) and in the amount agreed upon. Buyers will be allowed a 10 day grace period for late payments. If the scheduled payment is not received after the grace period, the animal will once again be listed for sale and the buyer will forfeit any monies previously paid.

After 3 months, you owe nothing IMO.

 

[Mooing Tricycle]

it really depends on what youve already said to him/her. if you said "yeah i will refund you minus 30.00...." then.. you need to do that. If you have not said what you are going to do about it yet, then i suggest talking to this buyer about a solution as well. Explaining things politely and kindly, will usually get you a better response than " i dont owe you anything".

 

[hhmoore]

While I have a clause in my TOS that states that, in the event of a default in an agreed upon payment plan, all monies paid become the property of KBI Herpetoculture (me), I have never taken a hard line on that. I take it from your statements that you never addressed this possibility in any way, so I would probably be disinclined to keep the full amount in that situation...HOWEVER, offering the sum of $30 "for your trouble" is borderline insulting (I'm having a thick skinned day , or it would be insulting). Your buyer failed to live up to his end of the agreement. He neglected to let you know in a timely manner that he would not be completing the payments. You housed the snakes for extra time while waiting for him. You most likely lost opportunities to sell those snakes because he promised to purchase them.
Unless you have written terms to refer to (this would include email agreements on the matter), I would tell him that you will put the snakes up for sale...and upon receipt of payment (when/if they sell) you will refund him whatever percentage of the monies paid you deem appropriate. You may also want to consider the difference in your agreed upon price vs whatever you ultimately sell them for....as in, you will return xx% minus any difference.

 

[shrap]

I thought you were more than fair by giving the person an extra 6-8 weeks to pay them off. You certainly do not owe the person a refund of any kind.

 

[monkeywrench133]

It was the buyer's responsibility to keep up with his end of the deal. Failing that, it was his responsibility to contact you to try and make other arrangements. It wasn't your job to chase him down after two months. He blew it, I don't think you owe him anything.

 

[deborahbroadus]

Business wise, when someone puts an item down on lay-a-way and they are unable to complete the purchase for whatever reason, they are entitled to their money back less holding fees or whatever is reasonable. IMO, it is not cool to keep someone's money and they have nothing at all to show for it.

I understand that he hasn't gotten in touch with you and he has not lived up to his end of the deal, but in a court of law..they might have issues with a seller keeping both the money and the animal. I would come to some kind of arrangement if possible.

But given that your TOS does not cover this kind of situation and you have this record in print now that shows that it wasn't in place when the deal was set..you might be hard pressed to show just cause for keeping all the money...unless you can show that it went on the upkeep of his animal.

In my opinion, I would take the animal off hold, put it back on the market and subtract keeping fees and return the rest to him after the animal is sold....with a very detailed concise list of food, fees, and items used for the upkeep of the animal.

 

[shrap]

This is exactly why I tend to stay away from payment plans. Both as a buyer and seller. Even though when I have done payment plans (twice ever) I have made it perfectly clear that you forfeit all money paid if you do not follow through with the agreement. That not being made clear up front certainly does put a twist on things.

The lay away plan you mentioned is one way of looking at it.... you get your money back if you do not follow through. But you can also look at it like buying a car or a house. If you dont pay it off then they take the car or house and you are left with nothing. You dont get your money back. But again, that should be made perfectly clear up front.

Oh and one other thing. You left out hours spent taking care of the animal and dealing with that customer in your detailed list. I dont know about you but my time is valuable and comes with a price as well.

 

[deborahbroadus]

This is exactly why I tend to stay away from payment plans. Both as a buyer and seller. Even though when I have done payment plans (twice ever) I have made it perfectly clear that you forfeit all money paid if you do not follow through with the agreement. That not being made clear up front certainly does put a twist on things.

The lay away plan you mentioned is one way of looking at it.... you get your money back if you do not follow through. But you can also look at it like buying a car or a house. If you dont pay it off then they take the car or house and you are left with nothing. You dont get your money back. But again, that should be made perfectly clear up front.

Oh and one other thing. You left out hours spent taking care of the animal and dealing with that customer in your detailed list. I dont know about you but my time is valuable and comes with a price as well.

I understand perfectly, I don't deal in payment plans myself (but I am tempted when I see the newer morphs!)

Imo, this transaction is similar to a lay-away-plan, because unlike a house or car, the buyer does/did not have the use of the items. If the buyer had had the animal and then defaulted then the seller could repo it same as a car or house and the buyer would get nothing. However the way the situation is set up now, the buyer defaulted (for whatever reason) but had never had the animal, or use of the animal..it would look very one-way to a judge if the buyer decided to take it that far.

Exactly! I agree TIME IS MONEY ..a very detailed list of expenses should be made. I am not saying give him all his money back, but imo, it will not be good business to keep EVERYTHING and the buyer has nothing at all and he did put up good money. For whatever reason, he was unable to follow though (stuff happens)..but still he has put up money and has nothing to show for it, while the buyer has both the money and the animal.

This is just my opinion. There are several ways that this could be handled and I am in no way saying that MY way is the only way.

 

[hhmoore]

but still he has put up money and has nothing to show for it, while the buyer has both the money and the animal.

it's okay, Deb, we know what you meant, lol.
While the seller still has the animal, and the money paid (less than half, btw), that was not his choice. Unlike the department store analogy, these are live animals, and it is likely that the seller does not have them in unlimited quantities. The seller has, in effect, "gotten stuck" with these animals...and at a time when (for the safety of the animals) he may not want to ship them. Factoring in the time of year (Xmas madness), economic constraints, demand, market adjustments, etc, there is no guarantee that he will get a quick sale at the previously agreed upon price.
I understand that a variety of factors could have come into play, leading the buyer to default on his agreement, but that does not put him in a position to dictate the terms at this point. He may have felt he was being generous by telling the seller to keep $30 for his trouble...I feel safe in saying that most of the respondants do not agree. It may be that he feels he "needs" the $125 for other things, but, again, IMO that is not his decision at this point. Although it is not the course I would take, I certainly wouldn't consider the seller wrong if he opted to keep the purchaser's money *under the described circumstances*

 

[shrap]

Imo, this transaction is similar to a lay-away-plan, because unlike a house or car, the buyer does/did not have the use of the items. If the buyer had had the animal and then defaulted then the seller could repo it same as a car or house and the buyer would get nothing. However the way the situation is set up now, the buyer defaulted (for whatever reason) but had never had the animal, or use of the animal..it would look very one-way to a judge if the buyer decided to take it that far.

Whether they had the animal or not is really irrelevant. The only thing that is relevant is that they did not set up any terms to cover this situation. So I agree the best route would be something along the lines that you mentioned.

But this is also why when I do set up payment plans that I send a contract that must be signed beforehand and returned to me. It plainly states that the deposit (25% of the total) and all payments are non refundable. I understand things do happen so my contract does allow for a 60 day grace period beyond the agreed upon pay off date. If you dont pay it off within the 60 days of the pay off date you lose everything you have paid.

I am not trying to be harsh or unjustly profit off of a payment plan, but what is the point in doing a payment plan if people dont follow through?

 

[Casey Hulse]

but what is the point in doing a payment plan if people dont follow through?

Circumstances can change.
Maybe the buyer just had "buyers remorse" or found what he wanted at a lower price, or maybe he lost his job, family health issues etc..

 

[deborahbroadus]

it's okay, Deb, we know what you meant, lol.
While the seller still has the animal, and the money paid (less than half, btw), that was not his choice. Unlike the department store analogy, these are live animals, and it is likely that the seller does not have them in unlimited quantities. The seller has, in effect, "gotten stuck" with these animals...and at a time when (for the safety of the animals) he may not want to ship them. Factoring in the time of year (Xmas madness), economic constraints, demand, market adjustments, etc, there is no guarantee that he will get a quick sale at the previously agreed upon price.
I understand that a variety of factors could have come into play, leading the buyer to default on his agreement, but that does not put him in a position to dictate the terms at this point. He may have felt he was being generous by telling the seller to keep $30 for his trouble...I feel safe in saying that most of the respondants do not agree. It may be that he feels he "needs" the $125 for other things, but, again, IMO that is not his decision at this point. Although it is not the course I would take, I certainly wouldn't consider the seller wrong if he opted to keep the purchaser's money *under the described circumstances*

I have NO excuse.

Your points and Shrap's points are duly noted.

 

[shrap]

Circumstances can change.
Maybe the buyer just had "buyers remorse" or found what he wanted at a lower price, or maybe he lost his job, family health issues etc..

Well you listed reasons the buyer may back out. Just or not.

But what is the incentive for the seller to do a payment plan for people if the people are not going to follow through? Just to give perpetual refunds?

 

[The BoidSmith]

In my opinion it all boils down to your TOS. If it was stated that it was a non-refundable deposit then fine, keep the money. Determining after the fact how much you are going to retain because of housing, labor, feed costs, etc. doesn't seem fair. Was the buyer fair? No he wasn't, but that doesn't mean you have to treat him the same way. If you posed this question is because you doubt keeping the money is the right thing to do, follow your instinct...

Regards.

 

[dave mcgowen]

refund decision

I want to thank everyone for their input, it has given me a lot to think about as responses have covered the spectrum of possible resolutions. On the one hand I feel angry and taken advantage of by letting him string me along, on the other hand I don't feel totally justified in keeping all his money. Needless to say, the next time I am asked to sell an animal on a payment plan, I will establish a detailed TOS before agreement.

I've decided to offer him a full credit towards what I still have availble this year or next year, or give him a partial refund, less all losses on my part (as was suggested by several responders).

A partial refund would amount to $72.20 of the original $155 that the potential buyer paid. Here is how I arrived at this amount:

In early August the selling price of my Het. pair was $300, that was fairly early in the season and anyone buying them could get them off to a good start. Now very late in the season, I think the selling price will more likely be around $250. Loss of $50.

The buyer used paypal to make the purchase and I paid fees for receiving the paypal payments ($2.48 and $2.62). That's the cost of accepting paypal and I am fine with that, however it is too late to make a refund through paypal and recoup the fees. Loss of $5.10.

There have been 16 weekly feedings from the time that we agreed on the deal to the time he offically defaulted. I obtain live feeders from a local breeder at $0.85 for a rat fuzzy/pup. 16 feedings X .85 X 2 snakes comes to $27.20

So I estimate my expenses and loss in sales price to be $82.30, I'll offer him the difference of $72.70. Again, thank you to all who took the time to offer a second opinion, Dave

 

[Casey Hulse]

But what is the incentive for the seller to do a payment plan for people if the people are not going to follow through? Just to give perpetual refunds?

There really isn't a good reason to offer payment plans unless other breeders are offering them, and you have animals that you need to sell, as this may help market them.
I hear that most Americans do not even have any savings, and $500-$2500 (or more) can be quite a bit if you are living paycheck to paycheck.
Offering a payment plan if the market is volatile may not be wise.

 

[deborahbroadus]

There really isn't a good reason to offer payment plans unless other breeders are offering them, and you have animals that you need to sell, as this may help market them.
I hear that most Americans do not even have any savings, and $500-$2500 (or more) can be quite a bit if you are living paycheck to paycheck.
Offering a payment plan if the market is volatile may not be wise.

We, Americans, have become addicted to "credit." We love the "buy here, pay here", and no payment for 30 days, LAY-AWAY-NOW... We have moved into an "instant gratification" era.

Having no money in the bank never stopped anyone from attempting to realize a dream.

 

[Golden Gate Geckos]

I would keep the 25% (of the total price, not what he paid) deposit and refund the rest. Put him on your "do not sell to" list and chock the rest up to a lesson learned not to arrange payment plans in the future. You may want your TOS to reflect whatever lesson learned from this.