Selling as 'Gift'

[srtiwari]

When selling gear to an overseas buyer, I am sometimes asked to declare a lesser than the real value of an item, or mark it as a 'gift', to minimize Customs duties. (This also comes up when trying to avoid Paypal fees in domestic transactions here in the US). I know that some ads include a warning against asking for considerations.
Aside from the obvious issue that would arise if an insurance claim had to be filed, and the declared value and sale price were very different, I am reluctant to do this purely on an ethical basis. I agree that one should not have to pay duty on a used item that has already been taxed at some point, but falsifying official documents seems just plain dumb. Without claiming knowledge of applicable local laws, let alone overseas ones, I can't imagine that this activity is not illegal.
I am curious to know how members deal with this issue, and if anyone is clear about the legal position on this.

 

[deirdre]

Generally, insurance is only up to the amount of declared valuation, and I guarantee you if it's lost, the seller's going to be on the hook no matter what the buyer said beforehand. So unless I knew the person in person and we'd agreed ahead of time and I felt I could trust them, it's always for full value.

Declaring as a gift, though, I don't know of a seller downside for non-business sellers, only that it is, as you say, falsifying paperwork and thus a bad idea.

FWIW, I've had three packages (out of more than a thousand) lost; of them, two (of about a hundred) were international. One never arrived, one arrived empty.

 

[jonmanjiro]

In the grand scheme of naughty things people can do, declaring an item as a gift rates very very low on the list IMO.

If a buyer asked me to declare something as a gift, I think it fair to ask the buyer to pay by sending the funds by PayPal as a "gift" in return, and I would also make it very clear that me declaring an item as a gift would be at the buyer's own risk, no exceptions. I also always ship by EMS with a tracking number, no exceptions.

 

[Roger Hicks]

Dear Subhash,

I've wondered about the same thing. The fact that it may have been taxed already, somewhere, is irrelevant. Ethically, I have no problem with 'free trading' (the old Cornish term for what the English call 'smuggling', but equally, I won't ship something as a gift unless it is, and if I declare a very low value, that's what the recipient can claim as the insurance value: his (or her) choice.

That's why I very seldom sell things overseas. Also, although I trust most people, I don't automatically trust someone I don't know who wants to buy something over the internet.

Cheers,

R.

 

[srtiwari]

Jonmanjiro, I like your approach, except for one point. I'm not sure the buyer can indemnify you adequately, regardless of what they agree to, if you happen to break a law. And one forum member (not on RFF) felt that such an agreement might amount to "defrauding a foreign government", which would be illegal, here in the US.
Roger, I don't have a problem with free trading, but I'd hate to be succesfully prosecuted for it.

 

[John Lawrence]

I stopped selling items to overseas buyers for the very reason that I could see a number of problems with declaring an item as a 'gift', most of which would be for me as the seller.

I know a few people who have done this in the past and been caught by the relevant authorities. In one case, customs opened a parcel which contained a print-out of the Ebay page detailing the winning bid. I also know others who go to the opposite extreme: falsifying paperwork, including CDs of local music and even going so far as writing 'friendly' letters to the buyer, in order to throw customs off the scent.

John

 

[shadowfox]

You are breaking a rule.
You are making a false statement (never mind the fact that it's a *documented* one).

Just don't do it, this is not a hard thing to decide, really.

Putting myself on the other side of the table: If I (as a buyer) can't afford to pay for the shipping *and* custom fees for that ultra rare photography item that I crave so much, then I'd rather be disappointed for a while than asking the seller to lie for my benefit.

 

[srtiwari]

"...Just don't do it, this is not a hard thing to decide, really.."

Thank you. I'm already aware of the ethical issue. I was more interested in how most people felt, and if there was a clearer legal position.
I also agree that one should consider all costs (including shipping, fees, taxes etc.,) when considering any purchase.

 

[splitimageview]

For those people who won't under-declare a shipment, how do you feel about carrying an item on your person (if the circumstances allow) to avoid duties?

For those willing to under-declare, third party insurers exist, for less than the price carriers charge. In this case the customs declaration does not have to match the insurance valuation.

There is also something to be said for under-declaring in order to improve the chances of the item not being pilfered in customs. There are many countries who have corrupt customs officials; they will show great interest in a $1000 item but ignore the same item if it is marked $100.

 

[Roger Hicks]

Jonmanjiro, I like your approach, except for one point. I'm not sure the buyer can indemnify you adequately, regardless of what they agree to, if you happen to break a law. And one forum member (not on RFF) felt that such an agreement might amount to "defrauding a foreign government", which would be illegal, here in the US.
Roger, I don't have a problem with free trading, but I'd hate to be succesfully prosecuted for it.

Precisely my sentiments.

Cheers,

R.

 

[srtiwari]

Here's a new twist to the issue-

If the seller uses the maximal insurable amount permitted by the carrier (regardless of its actual market value here), shipping to the country in question, can that amount be considered (and used) to value the item on the Customs declaration ? This way, the buyer is knowingly accepting that as replacement value in the event of a loss.

By the way, these are real and current issues I'm trying to figure out. I am selling a Nikon 9000 scanner which many overseas buyers have expressed an interest in. USPS has the cheapest rates, but different services and Insurance limits, in shipping to different countries.

 

[deirdre]

You should know, then, the PayPal rules for whether or not you get charged back. For anything of that value, I'd ship DHL or Fedex or (if it's good in the country) UPS. Not USPS. They do not have the same kind of guarantees. Yes, it will be hideously expensive to ship, but think about the downside risk of a chargeback.

Here, fwiw, are the PayPal rules for international shipments. Always ship signature required (and insure) for > $250.

 

[JayGannon]

<200 euro I mark as gift.
>200 euro I mark as commercial sample.

Thats just my own personal way of doing it.

 

[srtiwari]

You should know, then, the PayPal rules for whether or not you get charged back. For anything of that value, I'd ship DHL or Fedex or (if it's good in the country) UPS. Not USPS. They do not have the same kind of guarantees. Yes, it will be hideously expensive to ship, but think about the downside risk of a chargeback.

Here, fwiw, are the PayPal rules for international shipments. Always ship signature required (and insure) for > $250.

Interesting, but it seems Paypal recommends USPS for items worth >$250 when shipping overseas from the USA.

 

[richardhkirkando]

For the paypal thing, I notice a lot of people selling stuff who request payment marked as "gift", because they don't charge any fees. This is dumb, don't do it. You lose all buyer protection that paypal offers - if the seller never sends you the item, you're screwed. If you mark the payment as "goods", paypal can get your money back.

If the seller complains about fees, just pay them a little extra to cover it. Honestly though, they should eat the fees. Every business who accepts credit cards has to do that.

 

[Wags]

If it's valuable (>@$200) I ship it insured, when insured the full value is on the shipping label. I state in my listings that duties and taxes are responsibility of the buyer as I've shipped insured items (marked as a gift) to other countries and they've had to pay duties. Having that disclaimer line in your listings is really important cause many don't realize that importation incurs duties on fully insured items. I also state in my listings now that I won't mark as gift.

My last two "gifts" to UK and NZ both got about $150.00 duties, taxes, etc. No benefit to them or me by stating as a gift. I avoid it now.