Two important questions

1. If a scammer(the type where a message pops up during trading) is selling a Painted Cow Mangler for 1 bud..what would happen if you gave him a bud for it?

2. When selling an item for cash, if someone says they won't trade you without a middleman, do you have the right to deny the trade? Or are you trapped to the point where if you say no, you'll be marked as a scammer.
I know middleman are good for safety, but I really not comfortable with another person taking my items. I'm fine to have a witness, but for actual trading, not really comfortable. I sold keys a few times so far with no hassle and have the buyer go first, and as a gift. Haven't had anyone say they will only buy with a middleman, and haven't announced anywhere that I would refuse one.

1. Absolutely nothing, painted CM5Ks are very rare, but that doesn't matter. If you gave him a HOUWAR for a scrap, as long as you agreed on this, it's not scamming. It can possibly be considered sharking if you were deceived.

2. You always have the right to deny a trade, providing payment has not yet been sent, you can always decide "no thanks". If payment has already been sent, and you don't supply the items you will be marked as a scammer.
There are very few middlemen these days, due to changes in Steam policy on one sided trading, and they can often get intertwined with duped or glitched items very easily.

1. Champelliot is correct, SR doesn't care how much you trade x for y, we're not a "price setting" entity, and its really far from our goal. Traders set their prices, either by greater consensus of checking on diverse communities, Spreadcheat, or w/e. Doesn't say we like sharks here, just that we haven't found a "reasonable" rule-set to judge by. We therefore forward them to a couple communities, where they handle these reports. There is some initiative to have a sharking DB by some Community admins but thats just in the "idea phase".

2. Champelliot is not entirely correct.
- A trade can be backed out as long as it isn't finished. So if the other party has send the money to you, you can still refund it to get out. It has happened, as the party checking the paypal it came from found it was a scammer's PayPal, used on a alt. So he refunded, and told 'm to "F*** O**". (*1
- A small exception for after a finished trade, is the "dirty" items (uncraftable, untradable, gifted), those are worth a lot less. The seller of the item must have proclaimed its a dirty item, to avoid confusion, and the buyer be aware that he buys "dirty" items. The buyer party can claim the price difference if not.

In the past, with bugs in the in-game trading it happened that a normal colored (say green) bills was shown as a white bills. No idea if this will occur again in Steam Trading. But, in those cases, the seller of the wrong item must either:
- Retrade the wrong item for the right item that was agreed.
- Trade the price difference.
- Undo the trade.
Such to satisfaction of the wronged party. Above is in order of preference shown by such traders that where wronged (in my experience).

As soon as both parties have obliged their part of the trade, the trade is concluded, and nonnegotiable. Neither of parties is obliged to undo the trade after that. That some may, is all within their rights, but we don't oblige ppl to undo the trade if it was traded fair.

On MM, the middleman we show have proven themselves way beyond the normal trades. The basic procedure:
- Seller of items trades items to MM
- MM confirms receipt of items
- the buyer sends money to seller.
- seller confirms receipt of money
- MM trades items to buyer.
rules:
- The holder of the item trade-invites the person to whom the items go to.
- The MM never holds the money, with some exception where the MM is transferring funds between different payment systems, but thats to the risk of the MM willing to take (for he's at risk of the chargeback then).

(*1 Do not scam scammers, ppl have done so in the past, and those face a mark too. While we hold scammers reports to a way higher standard in proving they got scammed, we do accept such reports. And we've found they keep better records often of such...

Well you gave me a good answer for sharking but I meant something else for #1.

1. If a scammer(the type where a message pops up during trading) is selling a Painted Cow Mangler for 1 bud..what would happen if you gave him a bud for it? The rule states you can not trade with scammers. So will I receive a caution tag because of this?

Ah, sure.

Well, you mean probably by trading a "Valve Trade Probation" person. There are several states (in order they go thru):
- Valve Trade lock: That person cannot trade, activate games etc, nada changes on his account. Not visible, Duration: a week, maybe 2. Valve is researching the account.
- Valve Trade Ban: that person cannot trade, limited with game activation etc. Visible on profile on steam, duration 2 months up to perm (most of the times a longer period). Valve trade banned the account for repeated scamming or duping or other trading offenses.
- Valve Trade Probation: Person can / cannot trade. Visible on profile on steam, duration 6 weeks up to ~3 months.

Periods listed above can differ from case to case, we have no real insight in that, we just deduced that from cases we found.

Well, to SR, there is no problem in trading with a "trade probation" account, we see that the same level as a "Caution" tag.

The person may as well recieved a scammer tag, for the people scammed or wronged by that person will often report to SR as well. Those tags don't diminish over time without a specific appeal. So while you in general can ignore the valve warning, the SR mark takes prevalence over the case. Which gets to our rule of not to trade with marked scammers.
The procedures around that are as follows:

Well, we're pretty careful with those situations. Basic principle is:
- 1st offense: warning, private (non visible) caution mark, with note that subject is warned.
- 2nd offense: public caution
- 3rd offense: Scammer tag

The first is most like "we can forgive one unintended". But we can skip it to a direct "number 2" if its a bigger known trader, who really should know better.
There is also a 1 appeal rule on that, to lower it 1 level, but if it happens after that, we consider that a straight #3...
We also have a "lower" level. We set the bar at minimum trade value of a Bill's, including any unusual. This does not go for money trading them however.

So if you scrapbank a weapon, that is really no concern to us.

I'm not telling all considerations, for internal reasons, but its laid out enough with that.

I always feel compelled why you should not trade with a scammer:
- Items scammed by a scammer, or items that they traded for with those scammed items can be confiscated by valve.
- You money trading such a scammer gives them profit over their stolen goods.
- Another one consequence can be that valve sees your account as a fencing or alt account of the stolen goods, and you may get a trade lock/ban or even wipe of your backpack. Trades you did may get reversed, getting you in trouble with other traders, who can subsequently report you again...

The biggest problem for such cases is, is that valve in the support tickets are not going to "accuse" you of something, where you can defense yourself against. Instead, you have to guess what the problem is, and give your case to them. There is one difference vs SR in this as well, they know all about your account, the trades, the reports they got on you, what items involved etc. Its even worse if valve is going to lock your account, for then you cannot check your trade history and such to find the specific deals you did a week or more ago to jog your memory.

TLDR:
just dont trade with marked scammers and their obvious alts. Makes life so much easier.

Normally I wouldn't. However there are rare weapons out there, and it be a shame for them to be deleted because a scammer got a hold of it.
Painted Cow mangler, Clean Wanga prick without any craft number, vintage big kill, and a few others.
At the very least, even if I couldn't trade it directly without getting in some kind of trouble(even if it's just a warning), there should be some way to take these items from a scammer..maybe then hold an auction or something. By take, I don't necessarily mean me, but some higher power.

The only ones that can do such, is Valve, and they won't.
and if you mean trading for them, well... see above. Those kind of items aren't going to be sold to some unknown either, so the in betweens will be seen as alts of either.

Regardless of the rarity or how badly you want the item, if you are buying (even for full market value) an item from a marked scammer essentially you are letting them get away with fraud by giving them full value back for their committed fraud. You are "laundering" the item for the person. ESPECIALLY if you have prior knowledge of this before hitting the trade button. You deserve a caution tag. I know it sucks that some A-HOLE scammer has a sparkling key and a vintage buds but if you buy them off the guy, you just helped them "cash out". You helped them complete the crime. Ultimately if someone is caught for scamming someone from a very rare and expensive item and then NOBODY will trade them, all they are left with are digital pixels that can not be converted to hard currency (this is if EVERYONE knew about steamrep and checked there before trading).

Truly a shame.

I liked your post and at the same time I have a sad face on. I completely agree. But that is the best we can do to stop all the scammers. Think of it this way. If we can create an IDEAL scenario where a scammer NEVER gets to sell their scammed items, there wont be duped unusuals, hijacking accounts or frauding of items (except paypal fraud because that is just money fraud, period).