How to grade, photograph and price a scratch-and-dent unit

A french-door refrigerator comes off the truck with a two-inch dent in the left side panel and a scuff on the handle. The sticker says $2,199. Before the doors open at nine it needs a letter, a price and a sentence on the tag. A or B?

The short answer

Grade by where the damage is, not by how bad it feels. Damage you cannot see once installed is worth a smaller discount than damage a customer sees daily. Price against what the model sells for new today, not against the sticker. Shoot the same five photos. Disclose at the counter.

There is no industry-standard grading scale

Nobody says this plainly: no trade body, manufacturer programme or association defines what an "A" scratch-and-dent unit is. A liquidator's A and your A are different things. When a customer says "the place on Route 9 called it a B," that tells you nothing about the unit.

Two consequences. Your scale has to be yours and written down — on a card by the receiving door, in words a new hire can apply on day two. And it has to come out the same twice: the same damage on the same model in March and in September gets the same letter.

So the letter is never the disclosure. It is shorthand for staff. The sentence describing the damage is what the customer buys.

The words, and what they mean

Each implies a different warranty conversation.

• Scratch-and-dent — new, never used, damaged cosmetically in transit or on the floor. The mechanicals never ran a cycle.
• Open-box — a returned or display unit, possibly briefly used, often cosmetically perfect. The difference is use, not damage. Selling one as scratch-and-dent produces a warranty argument later.
• Refurbished, reconditioned — treated as synonyms, but the first means a repair to a specific fault and the second cleaning, wear parts and a test. Define whichever you use, on the tag.
• Used — previously owned and run. Implies nothing about condition.
• As-is — not a condition. A contract term about what you are not promising.

A three-grade scale you can apply on the dock

Two questions settle almost every unit. Is the damage visible once the unit is installed? A dent on the left side of a fridge that sits between two cabinets is invisible; the same dent on a freestanding range is not. Does anything not work, or is anything missing? Function and completeness outrank cosmetics — a flawless unit missing two crisper drawers is not an A.

Grade A. Light damage on concealed surfaces only: the back, a side that meets a cabinet, the underside. Everything present. The customer hears: "It has cosmetic damage you will not see once it is installed."

Grade B. Clear damage on a visible surface, or on a side exposed in some installations and not others. Nothing structural, nothing missing you cannot fit before delivery. The customer hears: "It has a visible dent here. I will show you where before you decide."

Grade C. Damage on the front, door or control panel, or heavy damage anywhere. Missing parts are disclosed separately. The customer hears: "It has real cosmetic damage on the front. It works, and it is priced for the damage."

A fourth bucket is not a grade: parts only. Anything that does not run correctly leaves the scale, because a C still promises the unit works.

The fridge, then: the side panel is concealed, the handle is not. That handle makes it a B.

The same five photos, every unit

The point: nothing at the door is a surprise. Before the unit hits the floor:

1. Front, straight on, whole unit, doors closed.
2. The damage, straight on, close enough to read.
3. The damage at a raking angle, light across it rather than at it. This is the shot that makes a dent's depth readable, and the one everybody skips.
4. The model and serial plate, in focus, number legible.
5. The interior, doors open, so shelves and drawers are visibly present.

Same plain background, even light — a work light off to the side beats a phone flash, which flattens dents out of existence. Put something of known size beside the damage: a tape measure, or a credit card. "Two-inch dent" means nothing to somebody scrolling.

Write the damage the same way every time

One sentence shape, never improvised — defect, location, size, visible or not once installed: "Dent, left side panel, approximately 2 inches, not visible when installed." Use a fixed list of defect words: scratch, scuff, dent, ding, chip, crack, bent, missing. Then customers can compare your units, and you can find every door-dent unit when a truckload goes bad. The sentence goes on the tag, the listing and the invoice.

Pricing off the dent, not off a feeling

1. Find today's street price for the same model new. Not MSRP, not the box sticker. What a customer could pay a real seller this week.
2. Write down that anchor and the date you checked it, for the day somebody asks how you got to $1,499.
3. Discount off the anchor by grade. A gets the smallest discount you can hold — nobody will know the unit is damaged. B gets enough that the dent reads as the reason for the price rather than as a problem. C is priced so the damage is obviously the deal. Those are not market data — no credible public benchmark exists for this trade, and an invented one is worse than none. Replace each band with what your own floor does after ten units.
4. Deduct missing parts at replacement cost, separately, and say so. A missing crisper drawer is not a vibe, it is $60 and a two-week wait.
5. Re-price on a schedule, not on a mood — day 30 and day 60 on the floor.

Writing the frame down does not make it right; it makes it checkable.

What you must tell the customer, and what "as-is" does not cover

Disclose the damage at the counter, before the sale, in the words on the tag, and point at it if the unit is on the floor. A dent found at the door is a refused delivery.

"As-is" is a contract term about implied warranties, not a description of the unit, and it does less than most sellers assume. Under the Uniform Commercial Code, section 2-316(3)(a), "all implied warranties are excluded by expressions like 'as is', 'with all faults'". Two limits matter.

• Some states do not allow it. The Federal Trade Commission's guide for businesses states: "Some states do not allow you to sell consumer products 'as is.'"
• Your own warranty cancels your disclaimer. Under 15 U.S.C. section 2308(a), no supplier may disclaim or modify an implied warranty if that supplier "makes any written warranty to the consumer", or enters into a service contract with them at the time of sale or within 90 days after. Sell a 90-day shop warranty on the same ticket and the "as-is" stamp on it does not do what you think.

That is what the rules say, not advice about your store. It varies by state, and your version is worth twenty minutes with somebody qualified locally, once.

Where the manufacturer warranty stands

Coverage depends on the brand, the model and how the unit reached you — one bought through a brand's authorized channel sits differently from one out of a liquidation lot. Never say "it still has the factory warranty" unless you can point at the document. Establish three things per brand, in writing:

1. Does coverage run from the date of purchase or the date of manufacture? On stock that sat in a warehouse for a year, that difference is the whole warranty.
2. Is your business an authorized dealer, and does coverage depend on that?
3. Is cosmetic damage excluded, and does damage the unit arrived with affect the mechanicals?

The only authority is the written warranty that ships with the unit. Your shop warranty is a separate promise made with your own money — and making it changes what "as-is" can do on the same invoice.

What goes wrong

• Two units of the same model at the same price. The record knows the model and not the unit, so the clean one and the dented one are the same row. You spot it when a customer asks for the cheaper one and nobody can say which.
• Grading by mood — generous on a slow Tuesday, harsh on a busy Saturday. Pull last month's B-grade photos side by side. If you cannot tell why one is a B and the next an A, neither can your staff.
• One photo set, reused across the next three units of that model. Two listings then show an identical dent in an identical place, which customers notice.
• The dent disclosed at the door. Check your refused deliveries. If any came back over cosmetic damage, the disclosure failed at the counter, not on the truck.
• The grade on the tag and nowhere else. Tags fall off. The unit is then ungraded.

How UpChannels handles this

Two units end up at one price because the system holds one row. In UpChannels a trackable unit is its own record: its own serial number, its own condition — New, Like New, Good, Fair, Poor or Damaged — its own grade, its own cost price and its own retail price. Two refrigerators of one model can sit in one catalogue at $2,199 and $1,499 with different letters.

The grade field is free text on purpose: you type your own letter. No standard exists, so the product does not invent one — it stores the scale you wrote down. The Trackable Items tab lists every unit with its serial, location, condition, grade, status and pricing, and breaks the count down by condition. Both importers check a serial against your existing units before writing anything, and refuse the row if it is already there, so re-running the same file does not give you the unit twice.

The boundary. UpChannels stores the grade you assign; it does not grade for you. There is no per-unit photo upload today — images attach to the product record — and no inspection record: the photographs and the damage sentence are a discipline you run, not a form the product gives you. The duplicate-serial check is a check the importer runs, not a constraint in the database, so it is worth searching a serial before you hand-key a unit you might already have.

More on how inventory works

Sources

• UCC section 2-316, Cornell Legal Information Institute.
• 15 U.S.C. section 2308, Magnuson-Moss Warranty Act, Cornell Legal Information Institute.
• FTC, "Businessperson's Guide to Federal Warranty Law".
• FTC, "Warranties", July 2023.

All four checked 12 September 2026. No source is cited for grading scales or discount bands, because no published standard for either exists.