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Insider: Canceled Orders – Can They Do That?

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This may be a familiar tale, but if you suffer through it there’s good news at the end.

You watch the Pro Tour. You see what cards are doing well. Paying attention and being ahead of the curve, you find a store online and decide it may be time to buy all of their Tidebinder Mages for a dollar. You complete the purchase and send off your money.

Just a few hours later, the card quadruples in price. Congrats, you made the right call! Now all you have to do is wait for your cards to come in, and then you can sell them for a nice profit.

Except not. You wake up the next morning to find an e-mail telling you the cards won’t be shipped, either because they’re “out of stock,” or “oversold,” or “incorrectly listed.” Sometimes, sellers are even more transparent. “Given the price change, I can no longer honor the original price. Here’s your money back. PEACE.”

You rage. Understandably. Not only are there no cheap copies on the market anymore, but you don’t even have the play set to build your own deck with! In short, you’re screwed.

Or are you?

Taking Legal Action

“I’m calling my lawyer!”

This is many people's first reaction upon finding out their order has been canceled. You want to sue and get all the Merfolk. After all, you had an agreement and they reneged on it. Surely that’s not legal.

As the rage burns itself out, you realize it’s just not worth it. Lawyers are expensive, lawsuits are expensive and your time is expensive (though not as expensive as your lawyer’s). You come to the understanding that you got burned and there’s just nothing you can do about it.

Like I said, it’s a familiar story, and one that most of us have gone through before. But it’s also one with an open question, a plot hole not unlike that of Indiana Jones and the Raiders of the Lost Ark (seriously, last week’s Big Bang Theory was traumatic in regards to that movie. If you don’t get the reference, don’t ever watch the episode; it will kill Raiders for you).

Anyway, the question is simple: If you wanted, do you have the legal right to pursue the cards?

We all understand that it’s not cost-effective, and it’s extremely unlikely to ever actually happen. But what I’ve never seen addressed before is whether or not it actually could. This is important to know because it determines whether or not we can e-mail the company and credibly threaten a lawsuit in an attempt to get them to honor the agreement.

So after the uproar that followed last week’s Pro Tour, I set out to find the answer to that question. And it’s a lot more murky than you might expect.

I consulted with several lawyers on this subject, and opinions varied, though a few things became clear from my research. Everything from this point forward applies only to the United States, because I’m unable to research the laws in other countries well enough (and it varies across the world, I’m sure).

What is clear is that, in principle, it is illegal for stores to cancel your order because the price went up.

I’ll quote our own Doug Linn to explain:

“You absolutely cannot cancel a sales contract because the underlying asset went up in price. It's Uniform Commercial Code Art. 2. 2-713 says that the seller is liable for the current market price of the goods, not what they were when you contracted for them. Since these are interchangeable goods (not a golfball-shaped water tower) the seller must either make you whole with the goods or make you whole with the benefit of the bargain--the current market value.

It's baffling to see people say "they don't have to do it, they can just refund you the money." Futures markets exist.

Add enough zeroes to these transaction losses and there are actual legal principles underpinning them.”

Speaking of the specific law, here it is. Uniform Commercial Code Article 2. 2-713:

“(1) Subject to the provisions of this Article with respect to proof of market price (Section 2-723), the measure of damages for non-delivery or repudiation by the seller is the difference between the market price at the time when the buyer learned of the breach and the contract price together with any incidental and consequential damages provided in this Article (Section 2-715), but less expenses saved in consequence of the seller's breach.

(2) Market price is to be determined as of the place for tender or, in cases of rejection after arrival or revocation of acceptance, as of the place of arrival.”

What this means is that if I bought 100 Master of Waves at $5 and the current market price is $20 when my order is canceled, I’m entitled to the difference. 100 Masters at $5 is $500, however 100 Masters at $20 comes out to $2,000, so in this case I would be entitled to the difference of $1,500 from the dealer who canceled my order.

Awesome, They Have to Pay Me!

Of course, here come the caveats, and the murkiness I alluded to.

Most stores have a terms of service page that basically says “we can do whatever we want, and you agree to this when you buy from us.” For instance, CoolStuffInc, a large site that I know canceled orders last week, has this in their Terms of Service:

“We reserve the right to decline the purchase of any item for any reason. We reserve the right to cancel an order for any reason. We reserve the right to reduce the purchase quantity of any item for any reason.”

If that reads like a Get out of Jail Free card, it’s because it is. Taken at face value, it gives all the power to the dealer. Hell, it means they can cancel your order simply because they don’t like you. But of course we only ever see this invoked when it comes to speculation.

Now the confusion. There’s some disagreement over whether there’s even a contract formed at the time this agreement, since only one party (you, the buyer) is actually bound to anything because of the Get out of Jail Free card the dealer has inserted into the bargain. There’s no obvious precedent for this in the courts, so it’s a grayish area.

But the consensus does seem to be that this Get out of Jail Free card policy is enforceable, because when you click “buy” from the store you are agreeing to abide by their policies. That removes any liability from them, and you are screwed, sorry.

Okay, so far we’ve determined two things.

  1. It is illegal for stores to cancel your order because the price went up, unless:
  2. They have a clause giving them that option in the Terms of Service you agreed to when you purchased cards.

Back to Square One

Like many of you, I’ve been in this situation before, and the first time it happened the way I handled it was to throw a very public fit.

The night Mental Misstep was banned, I looked around for a place to buylist the 25 or so copies I had. I settled on Channel Fireball, because even though they weren’t the highest buy price I expected a store of that repute to honor my order.

They didn’t, and I very publicly called them out for it. As it turned out, a friend of mine knew one of the important names involved in this transaction, and they stepped in and both honored the order as well as gave me $20 in store credit on top of it.

Yes, this had a happy ending for me, but I’m not particularly proud of the way I handled it. As we’ve determined, they had every legal right to do what they did. While I also had a right to decry their decision, the truth is I should have tried to handle it privately before blasting them.

Of course, that’s just my take on that experience. Plenty of people agreed with my decision at the time to call them out, and it’s certainly not one I can begrudge people after you have the rug pulled out from under you.

The Good News

Now I have some good news, and then some better news.

The good news. Not every store will do this to you. Star City Games, for instance, honors every sale they make, as do many other stores that don’t think saving a few dollars is worth alienating customers and creating bad publicity (in other words, any store with a basic understand of public relations).

This is awesome. We should be appreciative of these dealers, and I have no problem giving credit where it’s due in a public forum.

More good news. Not every store actually has a Terms of Service page, at least not one actually constructed properly.

I once bought a bunch of Scapeshifts from some store that later tried to cancel my order. Learning from my previous experience, the moment they told me my order was canceled I went to their site and looked through the Terms of Service.

It didn’t exist. I pointed this out to them, and they tried to tell me that it was “temporarily pulled down and under construction, and would be back up tomorrow.” I allowed them that obvious lie but pointed out that they were not posted at the time of the purchase, so I was not bound by them.

In the end, they shipped me eight of the 17 Scapeshfits I ordered from them at the original price, and refunded me the rest of my money. Not the worst compromise in the world.

The takeaway from that story is this: Do some research before you buy. Find stores you know will honor the sale (We even have a forum solely dedicated to this!). If you’re buying from a new place, look for their terms of service, and if they don’t have a Get out of Jail Free clause listed, screenshot the page so you have proof later on. Again, it’s not going to be financially worth it to take them to court, but you may be able to work out a compromise like I was able to.

Now, the Really Good News

One of the first places we go to when speculating is TCGPlayer. A ton of cards and stores are listed and you’re able to pick up a bunch of copies. I know some of you have had trouble buying cards from there and later having your orders canceled or reduced, so I hope that this helps.

From the TCGPlayer Marketplace Seller Agreement that every single store and/or individual seller must agree to when they list cards on the site:

Sellers are required to sell items at the price they listed to customers that meet the seller’s terms. By listing an item in our marketplace you agree that you have the right to sell the item, the item is in your possession and that your description provided in your listing is complete and accurate. Sellers are not allowed to drop ship or sell items they do not physically possess. Sellers are required to ship an order by the provided ship date and follow the [TCGplayer Shipping Guidelines]. Failure to ship by the provided date or follow the [TCGplayer Shipping Guidelines] may be grounds for termination of your Account.” (emphasis mine.)

Every single card you buy on TCGPlayer is guaranteed to be delivered.

If the seller refuses to do so, they are responsible, not you. Of course, you may not end up with your cards, but you can report that seller to TCGPlayer and there are, I assume, real consequences for dealers that do this.

It does not matter what that dealer’s site says. When you purchase cards on TCGPlayer, you are playing by their rules, as is the seller, and it doesn’t matter what that individual seller’s own Terms of Service may say.

This was a revelation to me, and one I hope helps you out in the future. Like I said, this isn’t some magical policy that will guarantee you will receive your cards, but it’s a layer of protection you don’t have anywhere else. That’s huge.

Wrapping up, I’ll point you here one more time. This is an invaluable forum, and one I hope you use to your advantage the next time you’re looking to buy a speculative order. I learned a lot researching this article, and while it’s not all great news, it is knowledge. And we all know that in Magic, knowledge truly does equal power.

Use it well.

Thanks for reading,

Corbin Hosler

@Chosler88 on Twitter

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Corbin Hosler

Corbin Hosler is a journalist living in Norman, Oklahoma (also known as the hotbed of Magic). He started playing in Shadowmoor and chased the Pro Tour dream for a few years, culminating in a Star City Games Legacy Open finals appearance in 2011 before deciding to turn to trading and speculation full-time. He writes weekly at QuietSpeculation.com and biweekly for LegitMTG. He also cohosts Brainstorm Brewery, the only financial podcast on the net. He can best be reached @Chosler88 on Twitter.

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29 thoughts on “Insider: Canceled Orders – Can They Do That?

            1. Either way, it’s a topic I’ve thought about writing on for awhile, and I think the two articles compliment each other.

              Not to mention your article was submitted on Oct. 14 and I brought this up on Oct. 13 😉

              1. Actually, I think both of y’all stole this one from me, seeing as I was ranting about it at GP Vegas when we were all sitting outside on Sunday night.

  1. That stuff on TCG is/was illegal. I really hope it backfires to all these sellers. If they don’t want to take their responsibility, they better close the whole shop.

      1. Good luck with that, they still haven’t added Anthologies cards as I requested 5 months ago. It’s really annoying to have to try to sell cards in person because TCGPlayer won’t hold them in stock.

  2. Thank you for writing this article, i’m happy to know the limits of UCC art code. Are there limits on what you can include in your T&C? If I own http://www.ripoffcards.com and add a line in my terms and conditions that says ‘I reserve the right to cancel your order and not issue a refund.’ then is it legal for me to just steal someones money?

      1. Do you know the legal difference between the two situations? If we are allowed to break UCC with a disclaimer I wonder what other laws can be circumvented?

        1. You can vary the UCC by agreement because Section 1-302(a) specifically allows you to, except where it says you can’t. And under 1-302(b), some of the things you can’t vary by agreement are the obligations of “good faith” and “reasonableness,” which are default terms of every contract under 1-304. With this in mind, it’d be extremely unlikely that a court would ever enforce a contract for the sale of goods where the seller can unilaterally cancel a buyer’s order for any reason and provide no refund or other remedy.

  3. There’s an alternative: buy those Master of Waves a month before they went up. I bought my Desecration Demons this March, six months before the price jump, and everyone was honest. When everyone still believed Jace might drop below $12, his price back in May, why would anyone want to cheat? Well occasionally they still cancel orders, but I’m sure those were honest mistakes. And so what, if they do cheat? You could simply buy more Jace at $12 from another seller. There was time.

    I’m almost inclined to say that the problem is to buy in only when the market has already shown movement, when the hype has already begun. I’m not saying you can’t profit from it, you surely can if you’re fast and lucky, but you’re fighting against everyone else, buyers and sellers, for this profit. But if you can evaluate cards more accurately ahead of time, you can make money while having everyone be nice at you.

    1. That’s a different argument altogether. I agree that people had lots of time to buy some specs before they spiked, but that requires a lot of risk. If you are buying cards that are in the process of spiking it is still on the seller to keep track of prices as well….as someone in the forums mentioned all they did was add “put” options to their stock with a pick and choose on what/when to sell. If that’s the case I would argue that they owe every person who pre-ordered and had a card go down money back, as their policy reflects that they value a card at future time rather than the time it was purchased.

      1. Yeah, it’s really easy to say “buy long before the price goes up.” Which Jace, sure that was easy to see coming and worked for us. But that’s not always how this market works. The Master of Waves deck didn’t even exist as a serious thing until the week before the PT when the Pros brewed it up.

        1. I did buy up a bunch of Master of Waves when they were at $6, and I’m all sold out by now. Of course I did not know mono-blue would go on to be the biggest thing around; but what I did know was that the Master is a 6+ power for four mana that has to be killed right away, and that can’t be killed by red or green decks. I bought them at presale prices and thought I would have to wait for a year to sell them.

          Sometimes we just need to look at a card for what it’s worth, instead of going by others’ opinions or historical performances. The good thing about Magic (as opposed to say, the stock market) is that everything’s transparent. A card’s strengths and weaknesses are all written on the paper. We just have to build decks and playtest them. (And how else do you know if a card is good or not?)

          Btw, I don’t think there is anything (in Standard) worth buying right now. Everything seems high. Except maybe Hammer of Purphoros (@$1.5), but maybe not even that.

        2. There were 2 or 3 people talking about MoW a couple weeks before the PT, Mark Nestico was one. I picked up quite a few in random trades with people wanting out of them. Risk was negligable, at $2 a copy the card would be utilized at some point. On the hand, great article! Anything that makes buying online a more transparent process is good for this community.

  4. Doug commented in the forums specifically regarding Cool Stuff Inc. / Gathering Magic that their TOS may not be enforceable.

    I assume you have to have reasonable Terms of Service.

      1. Well UCC does say as above

        “You absolutely cannot cancel a sales contract because the underlying asset went up in price. It’s Uniform Commercial Code Art. 2. 2-713 says that the seller is liable for the current market price of the goods, not what they were when you contracted for them. Since these are interchangeable goods (not a golfball-shaped water tower) the seller must either make you whole with the goods or make you whole with the benefit of the bargain–the current market value.

        Guess it would be up to a lawyer / judge to decide what reasonable is but again as Corbin stated would be too expensive to litigate.

      2. Reasonableness is one of the most primitive operative terms throughout all areas the law (“primitive” meaning it can’t really be broken down further). Rather, specific examples of what is or isn’t “reasonable” for a given legal rule using the term are elucidated through the facts of specific cases.

  5. I have big props to:

    1) Troll & Toad: Bought out their Master of Waves @ $6 and they’ve (apparently) shipped.

    2) Cool Stuff Inc: Bought a bunch of Boon Satyr @ $1 (Pre-order) and they’ve already arrived (and been traded / sold lol)

    GG to those stores that honor their own sell prices! 🙂

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