Is it Illegal to Charge a Customer More for Shipping than Cost?

 

One of the biggest problems that eBay faces is excessive shipping charges. Many readers have asked questions like the following:

  • If shipper receives a discount off the carrier base rates (published rates) and charges the consignee the carrier’s base rate, is this legal?
  • Is it illegal to charge a customer more than the shipper is being charged by the carrier?  Is there any clear written law stating this type of practice is illegal? 

What should you do?

I asked a colleague of mine, transportation lawyer, Brent Wm. Primus, his professional opinion.

Brent informed me that the question of legality is dependent on the terms of the contract between the buyer and the seller. If the terms of sale say or imply that the buyer will be billed the price of the product plus the actual shipping charges incurred by the seller, then it is indeed a problem. At a minimum, the seller has breached the contract between the parties. Also, most states have laws regarding unfair trade and this practice could well be interpreted as misleading or false. The safest strategy is to develop a formula or description to include in the sales contract which accurately reflects how the buyer will be charged. Alternatively, a buyer should be informed that they will be paying the price of the product plus “shipping and handling.” This way you will be covered.

Have you got a shipping question? Please feel free to write me and I will find you the answer.

Brent Wm. Primus received his Juris Doctorate in 1973 from the University of Minnesota Law School. He received the Transportation Lawyer of the Year award presented by the Transportation Consumer Protection Council. Brent has authored many articles and publications relating to transportation and writes a column for PARCEL magazine. You can get all your legal questions answered in the book, Transportation Logistics and the Law available at www.TransportLawTexts.com.

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