Making a profit on eBay

[Sir_Knight]

The OP came here asking to find out what the Catholic Church taught about the morality of a particular transaction on eBay. I found the relevant section of the Catechism and replied. Now, if you want to place the principles of capitalism above the principles of Catholicism, that is your decision, but I think we all owe it to the OP to distinguish between Catholic teaching and personal dissent against that teaching in our replies.

Capitalism and Catholicism are very different ways of dealing with economic issues.

It also needs to be pointed out that according to CCC 2425, the Catholic Church does not espouse socialism or communism but it DOES accepts regulated capitalism WITHOUT actually specifying how or how much it should be regulated … the wording implies minimal regulation – only as much as needed to prevent abuses.

 

[jjb5985]

Ok, as a buyer and seller on ebay I had to chime in.

First, with regards to the CCC comments, my first thoughts were of something like the stereotypical situation of a woman taking her car in to get fixed, and the mechanics charging her extra for parts and services because they think maybe she will be ignorant to how much the stuff really costs given her sex. That could be immoral. I don’t however think it would be immoral for a chain store to charge more for the same parts and services as say the independently owned mechanic. In fact, the difference between what I would pay going to some large scale car shops compared to a local place can be very significant for exactly the same parts and services. Nothing immoral there, just business as usual. Some places are cheaper than others for the same things and I only blame myself for paying more at one place than another.

I think we need to recognize a couple points here and some potentially false assumptions being made.

1. We are dealing with LUXURY items that are in no way essential to life.
2. What determines “price” is what people are willing to pay. Simple as that. Collectors items are only worth what they are worth because of what people want for them. How many collectors items sell for more than their original MSRP? Is it wrong to sell a rare collectors item for more than it’s MSRP?
   Diamonds are worth a lot because we say they are. If supply goes down and demand goes up, then market value can change over time. If something is easy to find one place and harder to find somewhere else, a lot of money can be made by taking advantage of this situation. Think of imports and exports between countries where a certain country can grow a lot of whatever and another country doesn’t have the environment to grow the same product. To make a profit here is pretty typical stuff.
3. Both parties should do research, I can’t do research for the other person as both a buyer and seller. That means if someone sells me (the buyer) something (at say a garage sale) cheaper than they could sell it elsewhere (say ebay) , I assume they know they could potentially get more but maybe they just want to get rid of it. Likewise, if someone pays me (the seller) more than they would have to elsewhere (another business or person), I can assume they may know this but want to have it RIGHT NOW or are willing to pay more for any number of reasons. I could assume any number of things, but I don’t have to do their research for them and I don’t have to discuss with them their reasons.

Either way, if they ask me anything, I will answer them honestly in the same way I would expect honesty from someone I was dealing with. I will mention things in my ebay listings that may make me less money, but that I think the potential buyers should know. This information doesn’t have to be what all the others prices for this item are. If they can do an ebay search and find my item, they have the brains to figure out for themselves how much these things sell for. Maybe they will give me more because of my positive feedback or the fact that I will ship it to them.

KEY INFO HERE!!! : The problem with this situation is people assume buyers on ebay are ignorant if they will pay 350 for something that they can get for 250. It is my understanding that Wiis sell for so much because they are hard to find someplaces. This is just supply and demand. The demand exceeds the supply, some people will pay more even IF THEY KNOW it only sells for 250 at some places. They may also be so lazy they don’t want to go to the store but want it shipped to them, then they will pay a $100 convience fee. It is not up to the seller to check with every buyer about their intentions or knowledge.

This seems like Best Buy selling something for $100, and Circuit City having it for $70. Is Best Buy obligated to tell people the Circuit City down the street has it cheaper? If I bought it at Best Buy and then found out I could have saved $30 or 30%, I would be MAD AT MYSELF AND NOT BEST BUY!!

Taking this further, if Circuit City is selling an expensive item for $7000 and BEST BUY has it for $5000, the difference can be much more dramatic in absolute value and similar in relative savings, but that doesn’t change the fact that one store isn’t obligated to either price match or inform the consumer of this difference.

Many high end stores like those located in upscale neighborhoods charge a whole lot more for the exact same items found elsewhere and it’s because people are willing to pay more. The average income in that area could be higher. Nothing wrong with that. If the buyers weren’t willing to pay the price, the business would cease to exist.

No one I’ve seen is arguing for profit at ALL COSTS. I think we all can agree there are places to draw the line and very real scams exist.

This can also fall apart if you are talking about food, shelter, transportaion, and other neccessary to “semi-neccessary” things like that. We are talking about luxury items that are presumed to be bought with expendible income. Therefore, so long as there is no INTENTIONAL deception like lying about the MSRP or value, especially when asked, it gets to become too much of a slippery slope to obligate businesses to inform of competitors’ prices or to always match a competitors price.

As far as the profits being proportionate to the service provided, that’s up to the buyers to determine. They are the ones paying for the good, and the good is merely an entertainment device. If all one had to do was go to the store and buy then relist online, then $100 may seem excessive for the work done, but a lot more money has been made doing a lot less.

 

[jjb5985]

PS: Just a thought, buying and selling luxury items means making many decisions and taking risks. Can I buy this item cheaper? Will someone else buy my item for more? You can’t expect others or the world to take the risks out of decisions for you. If you don’t like this, don’t buy or sell luxury (non essential) items.

 

[Just_Lurking]

We are talking about luxury items that are presumed to be bought with expendible income. Therefore, so long as there is no INTENTIONAL deception like lying about the MSRP or value, especially when asked, it gets to become too much of a slippery slope to obligate businesses to inform of competitors’ prices or to always match a competitors price.

This is a nice rule that you’ve made up, but Catholic moral teaching does not make an exception/loophole for luxury items, nor does it make an exception/loophole for ignorance due to something other than intentional deception.

 

[Caesar517]

Well said, jjb5985.

 

[Just_Lurking]

“Maximizing profit at all cost” is neither a principle nor an accurate characterization of capitalism.

I’m not saying it is an accurate characterization of capitalism.

What I am saying is that “maximizing profit at all costs” is wrong. I’m also saying that just because the Catholic Church’s teaching interferes with someones ability to make a profit doesn’t make that teaching wrong.

I believe you are misinterpreting CCC#2409.

There is a distinction between interpretation and dissent. Interpretation looks at the language of a Church teaching, sometimes in the context of other Church documents on the subject when applicable. Here, we have the following sentence from the CCC:

“Even if it does not contradict the provisions of civil law, any form of unjustly taking and keeping the property of others is against the seventh commandment: thus, deliberate retention of goods lent or of objects lost; business fraud; paying unjust wages; forcing up prices by taking advantage of the ignorance or hardship of another.”

Interpreting this means noting that the teaching does not make any exceptions for the cause of the ignorance, whether the person “should have” known better, or whether the item being sold is a luxury item or a necessity, and so on.

Dissent involves taking a Church teaching and trying to show that it is wrong, e.g., by coming up with some situation where the teaching leads to a counter-intuitive result. For example, some try to argue against the Catholic Church’s teaching on contraception by positing a situation where the wife is already pregnant, or post-menopausal, or has a medical condition which makes pregnancy life-threatening.

In this thread, dissent has taken the form of trying to apply this teaching to businesses such as grocery stores, even though the OP is talking about the opportunistic price gouging of a single item. Whether people like it or not, sometimes the Church’s teaching on the seventh commandment is going to get in the way of some individual or some business making a unjust profit. That does not mean the teaching is wrong.

 

[jjb5985]

This is a nice rule that you’ve made up, but Catholic moral teaching does not make an exception/loophole for luxury items, nor does it make an exception/loophole for ignorance due to something other than intentional deception.

I agree with you on both points that it is possible to do wrong with luxury items and nonintentional deception. But it isn’t ALWAYS wrong, and it can be wrong in the case of essential items in situations where it wouldn’t be wrong with non-essential items.

The reason for differing between essential and non-essential is that no one need to worry about the business of non-essential items if they don’t want to. If they decide to engage in the business of luxury items as buyer or seller, they must accept their own risks that come with the territory. That doesn’t mean anything goes and the Church does define a basic code of conduct, but I believe you are stretching it to your own definition of what you think is fair. If you can get some highly educated and good Catholic apologetic to back up your arguement for this situation, I will listen. What I read from the CCC I agree with (after all I am Catholic), but I think it is being taken out of context. Re-read my car repair example. Changing the price because you think the consumer is ignorant is different than just charging a higher price to begin with because you think some people will buy it for that price even when it’s cheaper elsewhere. THINGS WILL ALWAYS BE CHEAPER SOMEWHERE ELSE! No matter where you buy something, you can almost always find some place that will sell for a little cheaper. The seller has no obligation to sell for the lowest price or inform people of where to get the lowest price. People accept this risk when they shop.

Best Buy doesn’t have to advertise Circuit City’s prices even if they know they are cheaper. To require them to do so is rediculous.

If I sell an item for a price I believe is fair, all things considered, I do no moral wrong by not informing consumers of all the other potential places they could buy it at and give them the prices accordingly. Businesses don’t expect other businesses to advertise their prices for them.

If I bought something from someone for $100 and then I found out I could buy it at another location for $50, I would blame myself and only myself.

If I sold something to someone for $5 and found out it was really worth $100. I would blame only myself.

I don’t expect people to hold my hand through the process of business transactions. You win some, you lose some. If I can accept this, I can only expect others to. Otherwise, don’t do business.

 

[Caesar517]

I’m not saying it is an accurate characterization of capitalism.

Oh, ok. I thought that’s how you were defining capitalism.

What I am saying is that “maximizing profit at all costs” is wrong. I’m also saying that just because the Catholic Church’s teaching interferes with someones ability to make a profit doesn’t make that teaching wrong.

Agreed.

There is a distinction between interpretation and dissent. Interpretation looks at the language of a Church teaching, sometimes in the context of other Church documents on the subject when applicable. Here, we have the following sentence from the CCC:

“Even if it does not contradict the provisions of civil law, any form of unjustly taking and keeping the property of others is against the seventh commandment: thus, deliberate retention of goods lent or of objects lost; business fraud; paying unjust wages; forcing up prices by taking advantage of the ignorance or hardship of another.”

Interpreting this means noting that the teaching does not make any exceptions for the cause of the ignorance, whether the person “should have” known better, or whether the item being sold is a luxury item or a necessity, and so on.

Dissent involves taking a Church teaching and trying to show that it is wrong, e.g., by coming up with some situation where the teaching leads to a counter-intuitive result. For example, some try to argue against the Catholic Church’s teaching on contraception by positing a situation where the wife is already pregnant, or post-menopausal, or has a medical condition which makes pregnancy life-threatening.

In this thread, dissent has taken the form of trying to apply this teaching to businesses such as grocery stores, even though the OP is talking about the opportunistic price gouging of a single item. Whether people like it or not, sometimes the Church’s teaching on the seventh commandment is going to get in the way of some individual or some business making a unjust profit. That does not mean the teaching is wrong.

The rest of your post is somewhat frivolous. I know what interpreting and dissent are. No one is trying to prove a Church teaching wrong. You somehow interpret this teaching to mean that the buyer takes no responsibility for doing his own research before making a purchase. We do not.

 

[jjb5985]

What I am saying is that “maximizing profit at all costs” is wrong. I’m also saying that just because the Catholic Church’s teaching interferes with someones ability to make a profit doesn’t make that teaching wrong.

There is a distinction between interpretation and dissent. Interpretation looks at the language of a Church teaching, sometimes in the context of other Church documents on the subject when applicable. Here, we have the following sentence from the CCC:

“Even if it does not contradict the provisions of civil law, any form of unjustly taking and keeping the property of others is against the seventh commandment: thus, deliberate retention of goods lent or of objects lost; business fraud; paying unjust wages; forcing up prices by taking advantage of the ignorance or hardship of another.”

I think maximizing profit at all costs isn’t acceptable. But this example of reselling a Wii isn’t going to any extreme in my opinion.

“forcing up prices by taking advantage of the ignorance or hardship of another”

So the issue if with ignorance? By all means I would love a knowledable apologetic to comment on this. I will humbly abide by whatever the Church teaches. I think the problem is making a basic assumption of ignorance on the part of the buyer that sellers must correct. This is excessive burden to sellers. If sellers overcharge, their lack of revenue will force their prices down accordingly.

I can’t comment too much more on this as I’m running out of ways to put it and it will never be settled this way. I will look for an authority to comment on that part of the CCC and see if I can get some defnite answers.

 

[Just_Lurking]

The rest of your post is somewhat frivolous. I know what interpreting and dissent are. No one is trying to prove a Church teaching wrong.

Sorry, I’m getting a bit tired responding to the same old arguments again and again. I was searching for some new way to make my point.

You somehow interpret this teaching to mean that the buyer takes no responsibility for doing his own research before making a purchase. We do not.

The responsibility of the buyer is not at issue. If the buyer is not doing the proper research, then he is not being a good steward of his money. However this does not affect the issue of the morality of the seller taking advantage of the buyer’s ignorance.

By way of analogy, if someone walks through a dark alley, drunk, with $100 bills sticking out of this pocket, then he bears some of the responsibility if he gets robbed. But that doesn’t make what the robber does either moral or legal.

 

[Caesar517]

The responsibility of the buyer is not at issue. If the buyer is not doing the proper research, then he is not being a good steward of his money. However this does not affect the issue of the morality of the seller taking advantage of the buyer’s ignorance.

By way of analogy, if someone walks through a dark alley, drunk, with $100 bills sticking out of this pocket, then he bears some of the responsibility if he gets robbed. But that doesn’t make what the robber does either moral or legal.

I don’t like your analogy, as mugging someone is not acceptable, regardless of the amount. So when does the buyer take responsibility to do his own research? You suggest that a buyer never needs to do any reaserch because that responsibility would fall to the seller every time.

 

[Just_Lurking]

I think the problem is making a basic assumption of ignorance on the part of the buyer that sellers must correct. This is excessive burden to sellers.

The seller is prohibited from taking advantage of the buyer’s ignorance. I personally think the easiest way to deal with this requirement is for the seller to inform the buyer of the relevant information. But if there are other ways to avoid taking advantage of the buyer’s ignorance, they would also be acceptable.

Sometimes the Church’s teachings do impose quite a burden. One example of this that I mentioned above is the burden that the Church’s teaching on contraception imposes on a couple where the wife has a medical condition that makes pregnancy life-threatening.

I can’t comment too much more on this as I’m running out of ways to put it and it will never be settled this way. I will look for an authority to comment on that part of the CCC and see if I can get some defnite answers.

Good idea! We aren’t getting anywhere here. I will search the academic literature to see if I can find anything.

 

[Just_Lurking]

So when does the buyer take responsibility to do his own research?

Are you asking under what circumstances the buyer’s culpability for his own ignorance is so great that it justifies a seller taking advantage of it? If so, I know of no such circumstances.

You suggest that a buyer never needs to do any reaserch because that responsibility would fall to the seller every time.

I know you don’t like my analogy, but I’m not suggesting this, any more than I am suggesting that a person never needs to protect his wallet because the responsibility not to rob him falls to the thief every time.

Even avoiding my analogy, there are many cases where the seller doesn’t know the relevant information either, and so isn’t taking advantage of the buyer. For example, if I bought a Scooby Doo lunch box for $10 in 1980, and I state as much in my eBay ad asking for $10,000 today, then I’m doing my moral part as a seller. I am not obligated to do any other research at all. I’m not obligated to search out other sellers and find out what they are charging. Maybe I need $10,000 to keep from losing my house, and thats how I came up with the price. So in this case, the buyer would need to do the appropriate research to see if $10,000 is a fair price.

 

[Caesar517]

Are you asking under what circumstances the buyer’s culpability for his own ignorance is so great that it justifies a seller taking advantage of it? If so, I know of no such circumstances.

No that wasn’t what I was asking.

Even avoiding my analogy, there are many cases where the seller doesn’t know the relevant information either, and so isn’t taking advantage of the buyer. For example, if I bought a Scooby Doo lunch box for $10 in 1980, and I state as much in my eBay ad asking for $10,000 today, then I’m doing my moral part as a seller. I am not obligated to do any other research at all. I’m not obligated to search out other sellers and find out what they are charging. Maybe I need $10,000 to keep from losing my house, and thats how I came up with the price. So in this case, the buyer would need to do the appropriate research to see if $10,000 is a fair price.

We’re making progress! So the buyer does bear some responsibility for doing the reasearch; but now you are saying that the seller must tell the buyer how much he paid for it?

 

[Just_Lurking]

but now you are saying that the seller must tell the buyer how much he paid for it?

No. That was just the way I chose to lay out that particular hypothetical.

In that case, I don’t even think the price in 1980 is relevant, because it’s not like the buyer can time travel back to 1980 to get another one.

 

[jjb5985]

No that wasn’t what I was asking.

We’re making progress! So the buyer does bear some responsibility for doing the reasearch; but now you are saying that the seller must tell the buyer how much he paid for it?

Yes, that does seem like progress.

To Lurking:

What if the person was given the item as a gift so the purchase price was $0. Are they required to inform people that they may be able to receive similar items at no cost? It’s likely that any person may have paid anywhere from 0 to above asking price for an item depending on their circumstances for receiving it. It makes no difference to me as a buyer what the seller paid for it. I don’t care if they got it for free, from a wholesale at a low cost, from a retail outlet, or if they were “overcharged” for it, I’m only interested in what I have to pay for it. If I think the price is fair, I will purchase. MSRP is a suggested price. The economy and item itself (supply demand) will determine the actual price in any given circumstance.

I don’t like the idea of ripping people off, but I don’t think that is what is happening here. It’s not ripping people off (or taking advantage of ignorance) to not inform them of potential lower prices or to fail to inform them of the purchase price. By all means if they ask, you can go ahead and disclose that info, but even then I don’t know whether you would be obligated to or not.

PS: I sent a few messages and will hopefully get responses on this issue from an apologetic.

 

[Sir_Knight]

No supplier, distributor, re-seller, etc.; that I ever heard of ever tells the person that he is re-selling the item to how much he himself paid for the item. Nor, does any store, reseller, etc.; that I ever heard of, offer the cost lower cost of such items being sold by others.

Are all of these folks acting incorrectly?

 

[Just_Lurking]

What if the person was given the item as a gift so the purchase price was $0. Are they required to inform people that they may be able to receive similar items at no cost?

In the absence of any other factors, I don’t see that as being relevant information to the transaction.

If I think the price is fair, I will purchase.

If you lack relevant information, then your determination of what price is fair may be faulty. If the seller is taking advantage of your ignorance to raise the price, then the seller is acting immorally.

The economy and item itself (supply demand) will determine the actual price in any given circumstance.

And to the extent that the actual price differs from the fair market value, to use the IRS term, one of the parties may be acting immorally.

I don’t like the idea of ripping people off, but I don’t think that is what is happening here. It’s not ripping people off (or taking advantage of ignorance) to not inform them of potential lower prices or to fail to inform them of the purchase price.

This is an actual lower price that is still available, because all the seller did was go and buy the item at Circuit City. It isn’t merely a potential lower price or a purchase price that is no longer relevant.

Suppose I were to set up a website where all the buyers were pre-screened to ensure that their IQs were below 85, and allow/encourage sellers to resell items that are available from ordinary retail outlets at higher prices. Would this be moral?

PS: I sent a few messages and will hopefully get responses on this issue from an apologetic.

Great!

 

[Just_Lurking]

No supplier, distributor, re-seller, etc.; that I ever heard of ever tells the person that he is re-selling the item to how much he himself paid for the item. Nor, does any store, reseller, etc.; that I ever heard of, offer the cost lower cost of such items being sold by others.

Are all of these folks acting incorrectly?

No supplier, distributer, re-seller, that I have ever heard of buys their items at full price at a retail outlet, and then goes to sell them at a markup to people who could just as easily buy them from the retail outlet themselves.

The only company in this field that I have personal knowledge of is Sysco, and they operate morally by buying in a higher quantity than they sell. For example, they will buy beef by the truckload, costing over $100K, at a price that is published daily by the USDA, and sell in much smaller quantities at a higher price to buyers who don’t wish to purchase their beef in the larger quantities required by the slaughterhouses.

 

[jjb5985]

This is an actual lower price that is still available, because all the seller did was go and buy the item at Circuit City. It isn’t merely a potential lower price or a purchase price that is no longer relevant.

Suppose I were to set up a website where all the buyers were pre-screened to ensure that their IQs were below 85, and allow/encourage sellers to resell items that are available from ordinary retail outlets at higher prices. Would this be moral?

It doesn’t matter whether a lower price is easily available, because a lower price is almost always available elsewhere. Second, a person may willfully pay higher than retail price for a number of factors like convience and to charge them extra is fine so long as they’re ok with it.

The second part sounds wrong but mainly because it’s discrimination. A more accurate example seems to me places selling at higher prices because they are in an upscale neighborhood. This happens all the time in certain towns where nice areas have high end stores that charge higher prices for the same goods then if you go down a few blocks to the other stores. That’s because rich people in the neighborhood who don’t care as much will pay the extra. I don’t think that is immoral for those stores to charge more just because of their location relative to the economic wellbeing of those in the area.