The worries of selling used items

Have you ever purchased something off of Craigslist or a Facebook flea market, only to find out later that it wasn't what you thought? Do you contact the seller to get your money back? What if it's usable but just not authentic? Now what if you've been using it daily for almost a year? What if the tag has been ripped off because it's been used so much? Do you demand your money back or file a police report? This is the situation a friend of mine is in, but she is the seller. What would you do?

My friend Ann (name held for privacy) received multiple messages yesterday from a person that she sold an Ergo to in April 2012. Ann purchased the Ergo through Amazon with some gift cards that she received for Christmas  2011, and received the Ergo January 7th, 2012. After a couple of months use, Ann decided that she wanted an Ergo Sport and she sold the Ergo to Jane (name held for privacy) for $90 on a Facebook flea market site.

Jane has used the Ergo daily since April of 2012 and discovered in the past week (it's now March 2013), the the Ergo is counterfeit. Jane has since contacted Ann wanting her to refund her money back or she will be filing a police report for someone selling her a counterfeit item. After multiple messages from Jane and a phone call to Amazon (amazon stated they can do nothing aside from send an email to the third party seller. They simply fulfill the item), Ann felt harassed by Jane and told her to please leave her alone, and she will contact the original seller on Amazon.

So my question for you is, what would you do? When you're buying or selling a used item, how much liability do you have in the situation? Are you expected to refund if things don't work out in a specific amount of time or once the transaction is over, it's over? Should we be drawing up contacts when we sell used items to protect ourselves from something like this happening?

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