Buying, selling and how best to handle refunds at a Garage Sale.
By John Romaine
Thursday, 28 August 2008
Viewed : 17953 time(s)

Holding a garage sale and making some quick money in one weekend can be fun, but beware as some garage salers have found out, you really need to be aware of certain issues, especially when handling goods and money in particular. 

The following are two questions that are often overlooked when having a garage sale.

Should I accept a deposit to hold merchandise? 

Generally it is best to avoid "holding" merchandise. Your goal is to sell. If you choose to accept a deposit, put your agreement in writing, make two copies with both you and the buyer signing the agreement. Each person should keep a copy of the agreement. In the agreement, include important information such a name, address, telephone number of buyer and seller, the total sale price, the amount of deposit and detailed terms of the agreement such as when the item is to be picked up (before what date and time), the balance due and when it is to be paid, and what happens to the deposit if the buyer changes his/her mind and does not want the item or does not return within the agreed time. (Without this type of agreement, some holders of deposits have had to return the deposits even though they missed selling the merchandise to others.)

Do I have to charge GST on items sold? 

No you do not sell regularly or operate a business. It is a once off private garage sale only.

Do I have to refund money for an item sold at a garage sale and then returned? 

Usually items sold at a garage sale are sold "as is." Therefore, you do not have to refund money if the item is returned. However, if you misrepresented an item you can be liable. For example, suppose you sold an electric lawn mower and you told the person it operates well and will cut grass and he bought it based on your assurance. If the lawn mower does not operate or will not cut grass when he gets home with it (and he did not damage it enroute) then you are liable. You will have to accept it back and refund his money. It would have been better for you to have him plug in the lawn mower at your house and cut some grass to see that it does operate. You then would not be liable. If you tell the truth about the merchandise, or if you don't know, say so, then you are not liable. If you are selling an appliance that has a warranty, provide the buyer with a copy. Some warranties are transferrable to a second owner.

Be sure when holding a garage sale that you place clear signage that reads "All items sold as is without refund" to avoid such hassles. But do your best to assure potential customers that your items are all in working condition, or labelled appropriately.