I've recently read a thread on Reddit from the world of collectible card games that I found very interesting. Here's my summary of what the poster on Reddit describes has happened to them:
I have offered expensive collectible cards to a re-selling company. The company claims that the cards are counterfeit and informs me that they won't return the cards to me, won't tell me how they identified the cards as counterfeits, and that they will destroy them. Can they do this? Can I object to their decision?
Here's a more detailed description of the situation with some additional background.
This is about cards from a fantasy card game. As the playing cards in this game differ in their rarity, and as there are limited editions of cards, the cards are considered collectibles with a lively secondary market. There's a company on the secondary market (henceforth Reseller) that offers to buy cards from individuals to resell them in their own online store. The procedure for this is that they list buying prices on their website. People interested inselling at these prices send in their cards and will receive the set amount.
It's not unusual that some cards are worth hundreds, if not thousands of dollars – so unsurprisingly, counterfeit cards do exist. The company producing the card game is aware of these counterfeit cards and has added features to their printing process that makes manufacturing fake cards more difficult.
Bob wants to sell several cards to Reseller. He himself bought these cards from a reputable source, and the cards themselves don't look suspicious, so he doesn't have a reason to assume they are counterfeit cards. He sends his cards to Reseller and expects to receive the sale price for them. Instead, he is informed by Reseller that the cards he offered were determined to be counterfeit. Due to an agreement between them and the producing company, they would not ship back the cards to Bob but instead destroy them. They would not disclose the means of identifying the counterfeit cards to Bob, but they would provide confirmation of the destruction of the cards on request.
Reseller do not explain how they proceed in the case of counterfeit cards being offered to them in their Terms of Service. Yet, you can find a description of this procedure if you go to page two on their helpdesk list of frequent customer support questions. This list can be found if you follow a link in one question on their Selling FAQ page. In other words, the information is available on their website, but it's not exactly easy to discover unless you explicitly search for it.
Now, buying or selling counterfeit goods is clearly illegal in most jurisdictions. If Reseller have identified the cards as counterfeit, they may not purchase them, resell them, or probably even ship them back. They probably won't disclose their means of identifying fake cards in order to avoid giving counterfeit manufacturers important clues on how to improve their illegal cards.
However, the procedure employed by Reseller can be very disadvantageous to Bob and other potential customers in at least two ways:
- The cards that Bob offered may be misidentified as counterfeits by Reseller. If they still destroy the cards, they are destroying cards that are the legal property of Bob. Bob will receive no compensation for his loss.
- The procedure may be abused by Reseller. They may falsely claim that the cards Bob sent them were counterfeit, but instead of destroying them, they may keep them to resell them later. If Bob asks for confirmation of destruction, they may send him pictures of actual counterfeit copies that were destroyed independently of the present event. For Bob, there's no way of telling whether the pictures show the copies he sent to Reseller, or completely unrelated copies.
Given these risks, if I was Bob, I would probably agree that counterfeit cards can't be sold and should be destroyed – but I'd only accept this if there was independent proof that my cards were indeed fake cards. However, this proof is explicitly withheld by Reseller. So, I'm wondering whether Reseller has the right to decide that the cards were counterfeit, and consequently to destroy them without Bob's consent. I also wonder whether Bob has the right to demand an independent confirmation of Reseller's assessment.
Reseller is located in the US, but I'm also interested in other jurisdictions such as the UK or EU member states.