I bought a second-hand dress online for £25. After it arrived, the seller messaged me saying she missed the dress and that she'd buy it back if I didn't like it. After wearing it a few times, I've now decided to sell it, but I've seen this dress can fetch up to £120. I've listed it back on the same site I got it from for that price, but the original seller has now messaged, asking if it's "her" dress and saying she wants it back, and if I'd do it for the £25 that I paid her.
Money Moral Dilemma: Should I sell a dress back to the seller for the same price I paid?

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If you wanted to be nice, you could have offered it back to the previous owner for £25 before putting it up for sale again. But now, you have a chance to make more - or a chance of it only making £12.50. Do you want a guaranteed £25 or let it run and take the chance?
'Wanting it back' is not an option she has.
It's yours, bought and paid for.
Sell it for whatever you can get to whoever you want to.
No MMD here.
You can do as you please with it. If it doesn't sell at £120 then you could maybe consider doing a deal with her because I've found, to my great disappointment, that sometimes even though people list items at high prices on various sites, the items don't always sell for those high prices. If they do that's great and I would always try that first.
But I wouldn't feel guilty, I don't think it's fair of the original seller of the dress to keep contacting you and if I were you, I'd block her. Sounds harsh but she obviously didn't really want the dress because she sold it.
This reminds me of one of the posts on the House Buying and Selling thread. Someone had spent a lot of time finding the right house to buy and not long after they had moved in the seller contacted them to say they missed “their” house and wanted to buy it back at less money. There’s a few hundred entertaining responses on it
Since it worries you enough to ask the question, I agree with others that a good option would be to sell it by auction with a low-ish starting price and give her the details so she can bid for it - then you're sure to get a sale at a fair price and she gets a fair chance to be reunited with the dress.