I'm assuming this is from a GM's perspective.
Punish players that take too much
Put loot in that is only useful to certain players
Split the party up just before gaining loot
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Far and away, the most fair system is "Buy From Loot". Everything gets sold and split evenly except if a player wants a loot item, then they pay the party half price (selling price) to take that item.
This way, it's completely neutral to the party whether or not you keep the Necklace of Fireballs or sell it, because they're making the same amount of money either way (either they sell it to you or sell it to the merchant, for the same amount either way.) And it's fair to the players, because if you wouldn't even pay half price for an item, then it's honestly not really worth keeping, now is it? (And if two+ characters want to buy the same item from loot, I suppose you could have them bid for it.)
I've played with this system and there are essentially zero arguments about loot, because it's just so fair and clear-cut.
I usually end up being the Loot person in groups I join.
How I do it.
Example:
Loot-
+2 Weapon- sells for 4k
+1 Cloak of resistance- Sells for 500gp
+1 Ring of Protection- sells for 1000gp
The fighter wants the Upgrade weapon so he takes the +2 weapon. Everyone else already has those other items.
Fighter- 4,000gp
Wizard- 500gp
Cleric- 500gp
Rogue- 500gp
The fighter is 3,500gp above everyone else and will not receive gold till everyone gets 3,500gp to make up the wealth difference. Sort of like a running tab.
But I will not deprive a player of something they really want or need. So the fighter could stay ahead of the party but it is not a terrible thing cause he needs magic gear more than full casters. But there will also be loot he has no interest in and another class may want so it balances very quickly the more loot the group gathers.
In the end, it is better the gear be used than sold for half and you will end up catching up in gold. Every now and then 1 or 2 players may be ahead but they receive a lot less gold on the next transaction to balance it.
Far and away, the most fair system is "Buy From Loot". Everything gets sold and split evenly except if a player wants a loot item, then they pay the party half price (selling price) to take that item.
This way, it's completely neutral to the party whether or not you keep the Necklace of Fireballs or sell it, because they're making the same amount of money either way (either they sell it to you or sell it to the merchant, for the same amount either way.) And it's fair to the players, because if you wouldn't even pay half price for an item, then it's honestly not really worth keeping, now is it? (And if two+ characters want to buy the same item from loot, I suppose you could have them bid for it.)
I've played with this system and there are essentially zero arguments about loot, because it's just so fair and clear-cut.
That's how we have always done it. Sometimes if a really cool piece of loot is available that screams one player we will exclude it...
Typically we call out items off the loot and see who wants what. If multiple people want the same item it goes to whoever is getting less of everything else. Then we sell everything unwanted and split the pool of gp evenly. Those who received much more in items than everyone else typically forfeit their gold share. Also if you didn't want any/many items we typically give a double share of gold. Minor discrepancies happen but it usually ends up balancing out within a few sessions. Also if anyone is simply replacing a weapon for a better version the replaced item is typically sold as party loot(mostly to buy goodwill for receiving a share of the gp)
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Option 1. Remove the loot altogether. Apart from plot-related items, at each level give each player the amount of gold reported in the WBL table. If not in one chunk, distribute it during time. Bye bye boring corpse scavenging and selling.
Option 2. Everything the party finds is sold. If anyone wants to keep something, he buys it from the party at half the price, minus its share of the sale. So, let's say a party of 5 finds a +2 Headband of something (4000gp). The spellcaster wants it, so he buys it from the group at half the price (2000gp), minus its share of the sale (1/5 of the selling price, that is 2000/5 = 400) = 1600gp.
I have tried both, and while 1 is better than 2, they are both MUCH better than the usual credit-debt system, that while relying on the idea that, at the END, wealth will be equally distributed, it only causes disparities within the group.
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We essentially goes with whoever has best use of it gets it, if no one has use of it then we put it in the fighter's hole (portable) and sell it later and divide up the riches. At only one point has a player forgoing the profits from selling things because they'd taken quite a few items from the latest pile of shinies but it hasn't been a common thing.
None of us really wants to keep track of purchasing things from the pile, it seems a bit odd to me that a person might have to give up an item they would benefit from just because they can't buy it off.
If it looks like one person is getting a bit left behind in terms of loot there's nothing wrong with dropping an item that would almost be tailored to their needs.
Work out the total wealth of each character. Share out the loot so as to balance this amount. If it's still unclear who should get what, highest roll on a d20 gets it.
^-^
Let the biggest greedhead player have sole control over the loot lists.
Don't worry about anything, it will all work out in the end, besides, you know all of his decisions will be in the party's best interests.
From a GMs perspective, I let the players decide.
That said, in the games I run and play we use the Buy from Loot method with a double share for the party for consumables and emergencies like resurections and generally are willing to extend credit (either from other individuals or the party fund) for particularly desirable items that are outside a players budget.
I don't think we have had any serious disagreements or issues with this.
I think the Dark Souls Boardgame gave me good faith in my group. It's pretty difficult to evenly distribute so we had to keep buying items to try and dig for the guy who didn't have stuff. Eventually we were all in pretty good shape.
I haven't seen issues with people in my games; but we're all good friends. It's part "Who needs it", part "Who can use it", part "Let's divide it evenly."
That said, the "everything evenly" thing is more weighted by people not rolling for stats, not rolling for other stuff, etc..; where as if you got screwed before, you'll probably get more items because you need them more.
Either way, it's been a mixed bag but always pretty positive in my group. It's understood that it's a group task.
We split cash evenly, let people take items they like, sell left over items and split the cash.
Our parties are usually pretty diverse and well balanced, so there is rarely any conflict over any items. If anything, we encourage others to take items so they can both improve their specialties and diversify what they can do.
But we started playing 5E, so there's really nothing to do with cash except buy expensive spell components and more arrows and rations.