Is Reselling Illegal? - Resell Calendar (2024)

It’s a tale as old as time. A reseller lists their item for sale, and sooner or later, a disgruntled buyer sends them some angry messages. Maybe they stick to simple insults, or asking “why are you listing this above retail?”

Other times, they may accuse you of price gouging, or imply that reselling is illegal. Most of the time, you’re best off ignoring these kinds of messages, but for today, let’s look into it.

When is reselling illegal?

In most cases, reselling goods is completely legal. Whether or not you manufactured the item doesn’t matter. If you legally own the item, you can legally resell. A rule of thumb to use is that if the item is unrestricted to buy, it’s probably unrestricted to sell.

You’re also free to sell your items at whatever price you want. You can list them low or ludicrously high, it’s your right as a seller. Of course, this may lead to accusations of “price gouging”…

Is reselling price gouging?

While that’s a scary-sounding accusation, it doesn’t hold water. Price gouging is a real thing, with real requirements. Many states have a law that recognizes and restricts price gouging, but under specific conditions:

• For one, most states require an emergency to be actively happening. Natural disasters like earthquakes, hurricanes or floods are generally the case for this. The 2020 pandemic also had many areas declare an emergency.
• Price gouging only applies to essential goods. Marking up water bottles, medical supplies, gas, food, etc, during an emergency would qualify as price gouging. Reselling a PS5 for a couple bucks over retail would not, because it is not an essential good (sorry gamers).
• Generally, price gouging laws will only apply to major retailers. While this isn’t a hard and fast requirement, and individuals have been slapped with price gouging charges, the law is intended to stop retailers from monopolizing markets in disaster-struck areas

Considering all that, it would be very unlikely for you to be charged with price gouging as long as you are reselling items not considered essential, or taking advantage of natural disasters or other emergencies.

RC has a strict policy against reselling essential goods. This includes items like baby formula during the 2022 shortages, or hand sanitizer or masks during the pandemic.

What items are restricted to resell?

As we said before, if you can buy it unrestricted, you can probably sell it unrestricted.

If you’re reselling a car or other titled vehicle, you’ll need to make sure you transfer the title, and have the buyer register it properly. Check with your state’s DMV to see what’s required for a legal sale.

You may not realize it, but it’s completely illegal to resell alcohol without a liquor license. This goes for most controlled substances, so make sure you’re above the board. These restrictions are at a federal level.

Firearms are another restricted category. Some states allow private transfers relatively easily, while others will require the transfer to be done through a third party. Firearms, accessories, and ammunition are a category you MUST research before even making a listing.

Food and drink may also be restricted as well. technically, if an item is labeled as “not packaged for individual sale” or something similar, it means the individual packaging is not FDA compliant. While the stakes are relatively low, you shouldnt resell your Slim Jims directly to an FDA agent.

Is reselling tickets illegal?

It’s completely legal to resell tickets you already own. While the venue, artist, and fans may be displeased by this, its not in violation of any state or federal laws, as you are generally free to resell any items you lawfully own.

That said, make sure the tickets you purchase are transferrable if you intend to resell them. ticket retailers may require the ticket holder to show proof of identity or the credit card used to buy the tickets at the event. These systems are an attempt to crack down on ticket reselling, and are not ideal to resell.

Additionally, tickets are unique in that they are specifically protected from botting. The BOTS act was signed into law in 2016, and specifically targets ticket bots. It makes it illegal to purchase a ticket using an automated program, as well as resell tickets purchased using the bot.

Can reselling get you in trouble?

So just to reiterate, for most items, you are allowed to resell them as long as you legally own them. If you purchase direct from the manufacturer, through a retailer in person or online, you can resell them. Even if you use a bot or other software to help purchase the item, you maintain the right to resell them.

Where you source your items is the main legal issue with reselling. Being in possession of or selling stolen goods is illegal, so be wary of buying from third-party sellers at suspicious discounts. Additionally, there are various methods for buying items to resell that can be problematic.

Lets take a look:

Price Errors: Are they legal?

When a retailer puts an item up for sale at a severely discount or otherwise incorrect price, this is called a price error. It’s different from an ordinary sale in that the retailer did not intend to sell the product at the listed price.

There’s all kinds of price errors. Sometimes a retailer will simply misplace a zero, turning a $1,000 item into a $100 one. Other times they may apply the wrong price to an item. This is common with bundles, where a bundle of multiple items will be priced as a single product, for a fraction of the intended price.

Taking advantage of these kinds of price errors is completely legal. If the company is listing an item at an incorrect price, you’re within your rights to purchase it. Now, a retailer may not particularly like you doing that, and will typically cancel the order. If you make a habit out of this, they can ban your account and payment info. As far as the law goes, you’re fine.

Things get a bit murkier if you’re invoking unintended behavior on a website, or otherwise performing actions that can be construed as hacking. You might not realize this, but the legal definition for hacking is somewhat broad. It mostly boils down to “making a computer do something it shouldn’t”. By the way, it’s at this point we should mention we are not legal experts, or giving legal advice.

TL;DR, if you are gaming a site or trying to break its systems in a way to result in a price error or otherwise receive a discount, you may be getting a little close to the fire.

Abusing refunds and return fraud

Return fraud is any action where someone buys a product and abuses a company’s return policy for their own benefit. This can range from simply claiming they didn’t receive a purchased product, requesting a refund for products that can’t reasonably be returned, or buying items with stolen credit cards and refunding them to launder the money. In all these cases, abusing returns for personal benefit is illegal.

As a reseller, refunds and returns are important tools for reducing risk. Buying items with generous return policies allows you to gamble on a possibly profitable item, and if it fails to resell, you can return it. This is completely above board. It becomes return fraud when you are intentionally misrepresenting the situation to a retailer. In these cases, you will likely have your accounts suspended at best, and be sued or charged with fraud at worst.

RC Elite has a zero tolerance policy for methods involving return fraud. Any tips submitted that abuse a return policy will likely be rejected.

As you can see, reselling is generally completely legal. There are edge cases where reselling certain products can be restricted, but that doesn’t apply to most retail goods. As long as you are acquiring your reselling items legally, you shouldn’t have much to worry about.

Do a quick search on the item before you list it if you have any doubts, and remember to check state laws as well.

The main risk that comes with reselling is violating a website or retailer’s TOS. Many sellers do not like you buying their goods to resell, and will not hesitate to close your account. If you persist, they can blacklist your payment info, including your name, address, or card info. If this happens, you’ll need to either create new accounts, or contact customer service to reverse the ban.

We hope you have a good idea of the laws around reselling. Remember to subscribe to our newsletter and join the waitlist for RC Elite for new reselling opportunities. Total noob or seasoned pro, we have what you need to level up your resell game.