All that makes quest rewards look pitiful. For the sequel they should seriously curtail traders' cash or make selling expensive items very difficult until late game (after all if a no-name dirty peasant walked around a medieval town trying to sell an expensive armor that could only belong to a lord or some such they would probably whip him out of the town gate or hang him.
The issue here is that player effectively cheats with saves. Irl no one sane risks a hand trying to steal something from town. Nor someone would go and take multiple people on his own just to sell armor.
But those things also can be balanced by just introducing stuff that makes sense. Like wear. If you kill guy in armor then his armor is damaged, moreover in christian society wearing clothes of the dead should give you mental problems. Weapons themselves.
Finally, selling to shopkeepers in general is idiotic idea only made for games. Sure there are some specialized shops that take in loot but those usually don't take everything and they pay you shit. Shops are made to sell you shit not for you to sell them shit. Why would blacksmith buy some damaged used sworf from you when he can make his own.
This would effectively solve the issue. You would be able to sell stuff but you would need to find buyer and that buyer would buy single item from you and at massively reduced price.