Did the Antiques Dealer Pull a Fast One?
Q: I asked a local antiques dealer to come to my house and make me an offer on some old furniture and china. He bought several things, and I later heard that he sold one of them at auction for a fabulous sum -- many times what he paid me.
When I complained to him about it and asked for a share of his profit, he refused, saying that I seemed pleased with the price he offered me at the time. Was this right?
Legally? Probably. You didn't invite him to your home to do a written appraisal of your goods, which would have legally obligated him to research your antiques and tell you their fair market value. You accepted his offer without duress and were free to get an appraisal or solicit offers from other dealers.
But did he act ethically? No, regardless of whether he knew at the time just how valuable your item was. If he discovered its true worth later (but before putting it up for auction), an ethical dealer would have contacted you to discuss what he had learned -- not offering to return your merchandise, but to share with you some portion of the future profit.
If the dealer recognized the high value of your antique the moment he saw it in your home, then he was taking advantage of you to buy it for so little. (Note, however, that reputable dealers typically pay 30% to 50% less than retail value, to provide enough markup to cover their costs of doing business -- rent, interest on inventory loans, travel, advertising and so on -- and leave them a profit.)
An ethical dealer thrives on positive feedback and referrals from satisfied customers, developing a reputation for fairness in both buying and selling. But this dealer is a sharpshooter who apparently doesn't care.
A corollary issue: Does an amateur antiques hunter who spots a rare, severely underpriced item at a private garage sale or estate sale have an ethical obligation to inform the seller of its true worth? No, but I have heard of people who do just that out of consideration for the seller, offering to pay much more than the price on the item -- but still less than full retail.
Send your own money-and-ethics question to editor in chief Knight Kiplinger.