Recently, several states and local governments have proposed stringent regulations for the sale, purchase, and/or trade of used videos and video games. The proposed laws seek to reduce residential and commercial theft of videos and video games by making it harder to sell – and easier to track – stolen videos and video games. In order to do so, these laws would subject retailers who buy/sell/trade second-hand videos and video games to regulations similar to those imposed on pawn brokers, including licensing, recordkeeping for secondhand good transactions, automatic reporting to law enforcement, and holding periods.
Many DVD and video game retailers engage in “buy/sell/trade” of used DVDs, Blu-ray Discs, and video games. Many video and video game specialty retailers usually will only give store credit or a gift card – not cash – for used videos and games. The secondhand market allows consumers to dispose of titles they no longer wish to own and use the proceeds to buy new titles, and also permits persons who cannot afford to buy new DVDs and video games to purchase used goods at a discount.
The opportunity to trade in and purchase used video and video game software offers consumers a unique value proposition. For instance, popular video game titles can usually be purchased for less than $40 used, compared to $50-$60 for a new game. The availability of used video game products for sale has enabled a lower-economic demographic, which may not have been able to afford the more-expensive new video game products, to participate in the video game industry. In addition, the ability to sell or trade-in for credit used DVDs and video games has created a micro-economy that fuels sales of new products. Statistics from a leading video game retailer indicate that 70% of the proceeds from used game sales by consumers are used to purchase new games.
Estimated sales of previously viewed DVDs totaled between $800 million and $1 billion in 2009 according to industry sources, and used game sales are estimated to have totaled $2 billion in 2008.
EMA retailers, as community-oriented, family friendly businesses, understand the motivation for regulation of the secondhand articles trade and have no desire to facilitate the selling of stolen goods. EMA, therefore, seeks to ensure that law enforcement has the information it needs to investigate and prosecute stolen goods crimes while ensuring the continued vitality of the used DVD, Blu-ray Disc, and video game market.
In addition, EMA believes that a retailer that provided seller information to law enforcement could be accused of violating the federal Video Privacy Protection Act (18 U.S.C. 2710), which severely limits the release of information about a consumer’s video and video game transactions.