[cc-br] New State Laws Target Used-CD Sellers

Omar Kaminski omar at kaminski.com
Mon May 7 22:05:20 EDT 2007


New State Laws Target Used-CD Sellers
Draconian laws passed in Florida and Utah, and pending in Rhode Island and 
Wisconsin, restrict retail sales of used CDs.
Saturday, May 05, 2007 06:00 PM PDT
By Ed Christman

NEW YORK (Billboard) - Independent merchants selling and buying used CDs 
across the United States say they are alarmed by stepped-up 
pawn-broker-related laws recently enacted in Florida and Utah and pending in 
Rhode Island and Wisconsin.

In Florida, the new legislation requires all stores buying second-hand 
merchandise for resale to apply for a permit and file security in the form 
of a $10,000 bond with the Department of Agriculture and Consumer Services. 
In addition, stores would be required to thumb-print customers selling used 
CDs, and acquire a copy of state-issued identity documents such as a 
driver's license. Furthermore, stores could issue only store credit -- not 
cash -- in exchange for traded CDs, and would be required to hold discs for 
30 days before reselling them.

At least one Florida town has enforced the law, resulting in the cited 
merchant pulling used CDs from its store.

The law in Utah and the legislation pending in Wisconsin and Rhode Island 
are also harsher than typical pawn-shop laws, according to John Mitchell, 
outside counsel for NARM (National Association of Recording Merchandisers).

Brian Faber, director of operations for the eight-store, Phoenix-based Zia 
chain, says that while the rules sound onerous and could devalue the used-CD 
market, "we would comply and the market would ultimately adjust itself."

Faber says about 40 percent of his chain's volume comes from used-CD sales, 
paying out 80 percent cash and 20 percent store credit. If retailers could 
only pay out credit, he says, it could negatively affect product flow. The 
used-CD business' low pricing, he adds, is already being devalued by falling 
prices of new CDs.

Meanwhile, NARM says it will try to help shape the pending legislation. In 
Florida, retailers selling previously owned videos and videogames managed to 
carve out a partial exemption from the law so that they do not need a permit 
and have to wait only 15 days before reselling the merchandise.


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