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I want to charge and take customer's money upfront, and then go buy items in large volume.

Huntington Beach, CA |

After successfully achieving my goals with discounts and making my purchase, then I ship the products out. I have clearly stated this to all my customers that shipping could take 7 days or even 7 months etc! If they agree, they buy! If not then don't buy. If they've purchased and felt like waiting is too long, I will refund 100%. Is this against the law? Am I allow to take money upfront to build cash volume to acquire products and then ship it out to my customers? Everything I am doing is stated in the terms and agreement and the customer has agree to it before paying for the item.

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Attorney answers 3

Posted

Yes you can. But you really should hire an attorney to be sure your contracts are air tight. Saving a few bucks by not hiring a lawyer could in the long run cost you much, much more.

Posted

The holes in this business model are staggering and likely fatal. Talk to an attorney and an accountant.

No legal advice here. READ THIS BEFORE you contact me! My responses to questions on Avvo are never intended as legal advice and must not be relied upon as if they were legal advice. I give legal advice ONLY in the course of a formal attorney-client relationship. Exchange of information through Avvo's Questions forum does not establish an attorney-client relationship with me. That relationship is established only by joint execution of a written agreement for legal services. My law firm does not provide free consultations. Please do not call or write to me with a “few questions” that require me to analyze the specific facts of your history and your license application and prescribe for you how to get a State license. Send me an email to schedule a paid Consultation for that kind of information, direction, and assistance. My law firm presently accepts cases involving State and federal licenses and permits; discipline against State and federal licenses; and disciplinary and academic challenges to universities, colleges, boarding schools, and private schools. We take cases of wrongful termination or employment discrimination only if the claims involve peace officers, universities or colleges.

Asker

Posted

I do understand that everything has holes, but in general I just want to know from a lawyer's perspective legal wise, is it wrong to accept money via credit cards, debits from a customer that agrees to wait 1-100 days.

Christine C McCall

Christine C McCall

Posted

What's going to undermine your business model most devastatingly is this: "If they've purchased and felt like waiting is too long, I will refund 100%." With this condition, which is of course critical to earning the purchasing decision from the buyer, you will never know when you have enough pooled money to make your large-scale discounted purchase-- or for how long you will have the necessary amount of pooled money. The range of time and events over which the buyer has a right to return of the money will keep you forever off balance and potentially holding the bag to complete your own purchases or to qualify for your quantity discount. Because this provision is the one that will likely cause failure of your business and loss of all that you have invested, it is the issue that will cause you to try end-arounds. But any failure to honor the promise of the buyer's right to pull the money from the pooled funds can be a serious legal issue. As I said, the architecture here is faulty and you need to rethink: consult with an attorney and accountant.

Posted

I must agree with Ms. McCall about the business model. While potentially legal, I cannot imagine anyone accepting to wait for months with their money in your pocket until you are able to deliver.

The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.

Asker

Posted

I do understand. Then those customers who do not want to wait can just not order and go shop on another site? If all my customers agree to wait then I should be good to go I am assuming...

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