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Video Dealers May Have To Rethink Used DVD Policies

Video Dealers May Have To Rethink Used DVD Policies

 
Old 05-10-04, 03:05 PM
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Video Dealers May Have To Rethink Used DVD Policies

From the IMDB.com

Video Dealers May Have To Rethink Used DVD Policies
Individual video store dealers and chains that plan to expand their business in used DVDs have begun to rethink their strategy after being alerted that they will have to comply with special secondhand-dealer laws that require them to obtain a license, pay a fee, register personal information from the person they're taking the DVDs from, and keep the used disks off their shelves for a specified time period, Video Store magazine reported today (Monday). Sean Bersell, a spokesman for the Video Software Dealers Association, told the publication: "It is incumbent upon anybody who is involved in buying and reselling previously viewed videos and video games to be aware of the state and local laws that govern that trade." One Chicago police official told the publication that authorities have a special interest in enforcing the secondhand dealer laws, since CDs and DVDs are stolen in 80 percent of residential burglaries.
I don't know what to think of this.
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Old 05-10-04, 03:07 PM
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This happened in Chicago. Coconuts was forced to stop buying/selling because they needed a license, which they didn't have. This was 2 years ago at this point.

Not sure if they got the license, but I walk by it everyday and haven't seen any signs, so I am not sure.
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Old 05-10-04, 03:09 PM
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I don't see the problem.
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Old 05-10-04, 03:16 PM
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Originally posted by PixyJunket
I don't see the problem.

The "problem" is that if it is going to become a legal and bookeeping burden for stores to buy used DVDs from you, they may simply stop doing it. It appears that the issue is not someplace like Blockbuster selling off their excess rental product, but buying (or accepting as trade-in) DVDs from customers,
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Old 05-10-04, 03:22 PM
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Originally posted by marty888
The "problem" is that if it is going to become a legal and bookeeping burden for stores to buy used DVDs from you, they may simply stop doing it. It appears that the issue is not someplace like Blockbuster selling off their excess rental product, but buying (or accepting as trade-in) DVDs from customers,
I still don't see the problem. Why do they need a special license to buy used dvds?
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Old 05-10-04, 03:33 PM
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Originally posted by PopcornTreeCt
I still don't see the problem. Why do they need a special license to buy used dvds?

Why do you need a special license to drive a car, open a retail store, sell hot dogs on the corner....


They need a special license because their municipality (or state, or township or whatever) has said they need a special license, probably for the same reason that pawn shops often need a special license and must register the people who are pawning items. It's nothing new - I remember a number of years ago selling some books to the Strand Bookstore in NY, and needed to show i.d., and sign a form. It tends to discourage people who would like to make a living selling goodies that "fell off a truck".
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Old 05-10-04, 03:38 PM
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Originally posted by PopcornTreeCt
I still don't see the problem. Why do they need a special license to buy used dvds?
because the MPAA isn't getting enough $$$...
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Old 05-10-04, 03:41 PM
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Originally posted by marty888
The "problem" is that if it is going to become a legal and bookeeping burden for stores to buy used DVDs from you, they may simply stop doing it.
If they aren't willing to do the work, they shouldn't have opened business.
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Old 05-10-04, 04:46 PM
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Hmmm... I wonder if Street Lights here in The City has a license like that.
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Old 05-10-04, 04:49 PM
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Originally posted by marty888
Why do you need a special license to drive a car, open a retail store, sell hot dogs on the corner....


They need a special license because their municipality (or state, or township or whatever) has said they need a special license, probably for the same reason that pawn shops often need a special license and must register the people who are pawning items. It's nothing new - I remember a number of years ago selling some books to the Strand Bookstore in NY, and needed to show i.d., and sign a form. It tends to discourage people who would like to make a living selling goodies that "fell off a truck".
It also discourages people who think it is nobody's business to have their names, addresses, and phone numbers in order to sell minor items.
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Old 05-10-04, 05:10 PM
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I recall my little brother (14) wasn't able to sell some games at CD/Game Exchange because he didn't have ID. I wonder if that's related to this?
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Old 05-10-04, 05:11 PM
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The licenses (and similar licenses for pawn shops) are so the stores have info on who's selling stuff to catch people selling stolen goods.

This was a major problem with a local used CD store in Morgantown, WV (site of WVU). There were always people being arrested for selling stolen CDs to the store.

Without a policy of gathering information, these people would never be caught.

Thus I like the policy. And as Pixy said, if people aren't willing to do the work, they shouldn't open a used DVD store or bother selling them in the first place.
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Old 05-10-04, 05:30 PM
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Most of the retail stores that I frequent that sell used DVD's do big business in that market. They would get whatever license they needed to do that. The only ones I see this hurting would be the Mom n' Pop's which deal with low volume and, thus, might not bother to get a license. Overall, I don't see a problem with it. Blockbuster has had my name, address and phone number for years and I still sleep well at night.
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Old 05-10-04, 05:34 PM
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Originally posted by Rogue588
because the MPAA isn't getting enough $$$...
They wouldn't get any this way either, unless you mean that without a source for second hand merchandise, people will be forced to buy new product.

I think this is just a stupid way of thinking for the MPAA. I would say more than half my collection was ONLY bought because I got good deal used on it. It's not that people are making a choice between new and used, but BUY and NOT BUY.
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Old 05-10-04, 05:56 PM
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Originally posted by marty888
It tends to discourage people who would like to make a living selling goodies that "fell off a truck".
Then eBay came along and expanded the whole "fell off a truck" selling business, and you don't even have to get rip off by the pawn shop.
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Old 05-10-04, 06:12 PM
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Well, IMDB kind of raped the article (and didn't bother to provide a link). If you read the full article (text below) you will find out exactly what I suspected: this isn't a federal conspiracy from the MPAA (surprisingly enough). It is an extension of pawn shop laws that are set by individual states and municipalities. These laws apply to ANY secondhand resale shop, and have actually affected about 2% of polled businesses (who should have known better in the first place).

As somebody who is trying to venture into this business, I had already planned on doing most of these things (recording ID of sellers, etc.). The only blow that I see is if I am required to get an additional license, but if I have to then I have to. As somebody who has been on the other end as well (running a store who was being hit very hard by shoplifters who were reselling down the street) I am even more appreciative.

edited to add: Whoops, I do see one more down side: having to hold the product for any length of time, let alone 30 days, would be highly detrimental. Luckily, I am pretty sure that doesn't apply here.

Here is the text from the article (I can't get a link to work):

BRAVE USED WORLD: Secondhand Surprise
Author: HOLLY J. WAGNER
[email protected]
Posted: May 10, 2004
Email this Story to Friend
Imagine going to work at your entertainment store one day. A customer comes in offering to sell used DVDs or games and, because the store buys used product from consumers, you take a look. You buy the discs at your customary payout. Next thing you know, the long arm of the law is closing your store because you failed to take the proper information from the person selling the discs. Or you put the product into your previously viewed stock right away, and the law informs you that you were supposed to keep it around for a while before you sell it.

Welcome to the Brave Used World.

The issue is just starting to arise. In a recent survey of independent video retailers conducted by Video Store Magazine Market Research, just 5 percent reported taking movie or game trades from consumers. Just 2 percent of survey respondents reported that their city or state requires them to hold used goods before reselling them. But the reality may be quite different.

Virtually every state has a pawnshop law, which may extend to other dealers in used goods. Pawnshops are required to record information about their transactions, to report them to local authorities on a regular basis and to hold goods for specified periods of time — typically nine to 30 days — before selling the goods to others.

Some states have separate secondhand-dealer laws that specify they extend beyond pawnshops. The variance in what they require is broad. Most include a license and a fee, and set rules for what information merchants must collect from people selling used goods and record it for inspection by authorities.

Laws Aim to Stop Crime

The laws arose from a desire to prevent trafficking in stolen goods, and most initially were applied to items like guns, power tools, audio/video equipment and other items that are often taken in burglaries and have serial numbers or other identifying marks. But with the popularity and cash value of DVDs, authorities are increasingly looking to track businesses that trade in large quantities of packaged media.

“We had a guy who was a cocaine addict, and he was doing burglaries. He did about 50 in two months’ time ... We yanked the records for about half a dozen pawnshops, and we noticed a lot of people selling DVDs — 20, 30, 40, 100 — almost daily. We knew they were stolen,” said Edward Glomb, chief of police for the Detroit suburbs of Franklin and Bingham Farms. He’s not alone.

“We had one kid come in to sell CDs with a Wal-Mart vest on. He was on his lunch break. He came to a pawnshop when the police were there,” said Wayne County assistant prosecutor Dennis Doherty.

Wait, Is That Legal?

For dealers, especially those with multiple stores, it can be a regulatory minefield to navigate.

“The difficulty is that there may be a framework at the state level, but secondary sellers are regulated at the county or city level, so these things are a patchwork and there is no uniformity of how CDs and DVDs are treated,” said Sean Bersell, VP of public affairs for the Video Software Dealers Association (VSDA). “It is incumbent upon anybody who is involved in buying and reselling previously viewed videos and video games to be aware of the state and local laws that govern that trade. It may take a little bit of digging on their part to find out where that law is. The best approach is to have their business lawyer advise them on that particular requirement.”

The range is wide. Regulations may require as little as getting a photo ID from the seller, or as much as taking detailed information and entering it into a computerized system for daily or even real-time transmission to local authorities. Most jurisdictions require that used goods be held for a period of time before resale. Some apply only to cash transactions; others govern store credit trades as well. Some define secondhand dealers by the percentage of their business that is used goods, others by what type of goods they sell.

Retailer 0, The Law 1

In Chicago, Johnny Balmer fought the law, and the law won. At least for now.

The owner of five Second Hand Tunes stores in the Chicago area filed a federal lawsuit against the city in 2002, when officials moved to include the words “digital audio disc” and “digital video disc” to its secondhand dealer law. The reasoning, according to one police official, was that CDs and DVDs were stolen in 80 percent of residential burglaries.

The change, however, forced Balmer and others like him to start recording much more detailed information about sellers than they had in the past, as well as paying a $500 annual fee to the city for a secondhand dealer permit and having the owners fingerprinted and background checked.

“We have always required that anyone selling product to us have a valid photo ID, whether that be a passport, state-issued ID or a driver’s license. That is just a common sense thing,” Balmer said. “I thought it was strange that the city decided to go a step further and get a Social Security number and hold product for 30 days before putting it out on the shelves. I would never ask a customer for a Social Security number, especially in this day and age of identity theft.”

Steps to Avoid Getting Burned

Businesses have a variety of practices to avoid buying stolen goods. Among the 12 percent of merchants who told Video Store Magazine Market Research they buy used product, 47 percent take a driver’s license number, 20 percent only buy from store members, 13.3 percent ask for the original sales receipt, 7 percent won’t buy items that are still in a factory wrapper and 7 percent give store credit only. (Multiple responses were allowed.)

Authorities recommend, at a minimum, getting the seller’s ID.

“Hopefully people who have stolen stuff will be reluctant to bring it to secondhand shops and try to sell it if they have to give an ID,” Doherty said.

It doesn’t always work. In a recent post to the VSDA discussion board, Bill Duggan of Videoport in Portland, Maine, said he only gives store credit.

“A young man sold one of my clerks 10 used DVDs, all new releases, with multiple copies of some titles ... This young man had no problem doing that because he did not care about the repercussions of selling stolen merchandise. He was a junkie,” Duggan wrote. Like law officers, Duggan recommends only trading in store credit to reduce problems and watching for irregularities.

“If someone comes in with 10 copies of the same DVD and they are all new, that should be a clue,” Doherty said.

Last edited by Abob Teff; 05-10-04 at 06:18 PM.
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Old 05-10-04, 06:25 PM
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Well I'm glad Abob Teff was able to explain this to me. Now I don't have to do the work. Thanks Abob.
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Old 05-10-04, 07:25 PM
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is this the same issue with like used CDs? because I was under the notion that when you buy a used CD the artist/company doesn't get the money for it then, the store does since they are pretty much buying it off you? is this the same problem with used DVDs?
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Old 05-10-04, 07:37 PM
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Originally posted by asianxcore
is this the same issue with like used CDs? because I was under the notion that when you buy a used CD the artist/company doesn't get the money for it then, the store does since they are pretty much buying it off you? is this the same problem with used DVDs?

No it has nothing to do with studios at all. Its more a Big Brother issue. You have the right to sell the items you purchased to whoever you want, but because some people sell stolen goods, Much fewer than legitimate transactions I would believe, you will now have to trade some of your civil libirties and privacy so the government can track who sold what to whom.
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Old 05-10-04, 07:45 PM
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“We had a guy who was a cocaine addict, and he was doing burglaries. He did about 50 in two months’ time ... We yanked the records for about half a dozen pawnshops, and we noticed a lot of people selling DVDs — 20, 30, 40, 100 — almost daily. We knew they were stolen,” said Edward Glomb, chief of police for the Detroit suburbs of Franklin and Bingham Farms. He’s not alone.
Well it's comforting to know that if I ever fall on financial difficulties and have to pawn off part of my collection, taking in 20 titles a day, I'll be considered a thief by default.

I understand how records help with certain items (mainly the ones with serial #s, where the original owner recorded it) but I don't understand how a DA could prosecute you based on the number of DVDs you're selling...you may have no proof that you bought them, but they have no proof that you stole them, and innocent until proven guilty, right?

Last edited by drjay; 05-10-04 at 07:48 PM.
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Old 05-10-04, 07:47 PM
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Originally posted by Abob Teff
As somebody who is trying to venture into this business, I had already planned on doing most of these things (recording ID of sellers, etc.)
I've never sold DVDs but at this one store where I buy a good portion of my used ones, part of the procedure I've seen might be of help to you.

When they record the ID, they will photocopy the ID along with the spines of the DVDS the person sold. That way you get the ID and the DVDs recorded on one sheet. Pretty quick and handy, I thought.
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Old 05-10-04, 07:49 PM
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Originally posted by TBFL
you will now have to trade some of your civil libirties and privacy so the government can track who sold what to whom.
No, the store tracks you, the gov't can't look at the data without a court order.
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Old 05-10-04, 07:55 PM
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Originally posted by duz
No, the store tracks you, the gov't can't look at the data without a court order.
Regulations may require as little as getting a photo ID from the seller, or as much as taking detailed information and entering it into a computerized system for daily or even real-time transmission to local authorities.



Did I read it wrong ??
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Old 05-10-04, 07:58 PM
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Originally posted by drjay
I understand how records help with certain items (mainly the ones with serial #s, where the original owner recorded it) but I don't understand how a DA could prosecute you based on the number of DVDs you're selling...you may have no proof that you bought them, but they have no proof that you stole them, and innocent until proven guilty, right?
It's not a matter of numbers for prosecution. It's a matter of titles. At my former employer we would file a police report with all the stolen titles. If somebody walks into a pawn shop and sells off, we'll say 20 DVDs, and those 20 happen to match up identically to the police report I filed a few days before . . . well, I would say that we have a thief. The police wouldn't follow up on the reports, I would check the 2ndhand store and get with the manager there. I would never ask for the information, just would follow up on the report that I filed.

It is, I hate to say, like depositing cash in a bank. Financial transactions over a certain amount are required to be reported. That doesn't mean you did anything wrong.

It is protection for the shopowner as well. "Don't ask, don't tell" equals "trafficking in stolen goods."

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Old 05-11-04, 05:48 PM
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Originally posted by duz
No, the store tracks you, the gov't can't look at the data without a court order.
IMO, the government can pretty much do anything they want now with the patriot act.
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