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Consumer Scam Warnings About Selling on eBay

By Brett Goldfarb in Consumer Advocacy, Special Reports
December 1st, 2011

Thinking about selling that awful sweater you got as a gift from your great aunt on eBay? Before you do, you might want to read this article and think twice before you sell anything on eBay.

ebay scamHoliday times are here and it’s a given everyone is going to get a gift or two you simply don’t want or can’t use. In the past, it was common to stuff that unwanted gift in a closet, re-gift it to someone else or return it for a refund.

These days, more and more people turn to eBay as an alternative to get rid of that dust collector and put a little cash in the pocket, but best be warned : selling on eBay can be VERY treacherous.

eBay can be a great place to find a potential buyer interested in your unwanted gift but there are numerous pitfalls novice sellers can easily fall into when selling on eBay. Most of these potential problems are due to eBay policies that provide loopholes for crooks to use the eBay Buyer Protection system to their advantage.

eBay also takes up to 15% of your sale price in fees and force sellers to use Paypal for an additional 4% transaction fees. When all is said and done, eBay will pocket nearly 20% of your item’s price for selling in their marketplace that is littered with crooks, scammers and fraudsters. All with zero customer support for sellers.

We spoke to several veteran eBay sellers and they were quick to offer these 7 warnings for casual or novice eBay sellers to avoid potential buyer fraud.

Never Sell Anything on eBay You Can’t Afford to Lose

The eBay sellers we spoke to all were very clear about the fact that you should never sell anything you can’t afford to lose on eBay. In the last year, there have been hundreds of reports of eBay buyers using eBay’s Buyer Protection to scam sellers out of high priced designer items such as Chanel and Louis Vuitton purses by simply claiming the item was not authentic or by pulling a switch and returning a fake item.

Always Ship With Delivery Confirmation

If you’re going to ship anything to an eBay buyer, always, always, always purchase some form of online viewable delivery comfirmation. Without DC, a malicious buyer can simply file an Item Not Received claim and eBay/Paypal will grant them an automatic refund from your bank account or credit card. It is important to note that delivery confirmation is not available for international shipping unless you ship using USPS Express Mail International which is very expensive.

Purchase Signature Confirmation on Orders Over $250

This is another loophole eBay does not inform sellers about but can really come back to bite you in the arse. Any order over $250 (this includes shipping costs) MUST be shipped with signature confirmation in order to qualify for seller protection. There are far too many horror stories from novice sellers who shipped expensive items only to have them stolen by buyers who claimed they didn’t receive it. Again, eBay/Paypal will refund the buyer from your bank account or credit card on file.

Be Prepared for Paypal to Hold Your Funds for 21 Days

Here’s another gotcha that eBay isn’t up front about. All new sellers or sellers not meeting eBay’s secret criteria will be subject to having the funds from their buyers payment held for 21 days by Paypal. This means if you sell a $2000 stereo system on eBay that costs $50 to ship, you will have to pay for the shipping out of pocket and wait for Paypal to release your funds when they see fit.

Beware of Scam Artists Seeking Partial Refunds

Newer sellers with a low feedback score can be assured they will encounter the buyer who complains about the item they were sold but doesn’t want to return it and wants a partial refund. Don’t fall for this scam. This scam is perpetuated by eBay sellers using multiple eBay ID’s (yes, believe it or not, eBay allows people to have more than one ID) who buy on one and sell on another. Never give a partial refund to a buyer for any reason. If they don’t like what you sold them, have them return it for a full refund.

Always Ship to Address on File With Paypal

Another common eBay scam is when a buyer targets a new seller and asks them to ship the item they purchased or won to an address other than the address on file with eBay. If you ship to an address other than the one Ebay/Paypal provides for the transaction, it completely voids your seller protection.

Be Prepared to Accept Returns for 45 Days

No matter what you’re selling on eBay and no matter what you state as a return policy in your listing, eBay will FORCE you to accept returns and issue refunds for 45 days after purchase. This policy is widely abused considering the possibilities for buyers to buy and use an item, then return it at the seller’s expense. Considering Walmart, Best Buy and other retailers no longer accept returns of unsealed CD’s, DVD’s, video games ~ eBay has become the perfect place for people to buy, copy and return.

As you can see from the information provided above, selling on eBay is like tap dancing in a minefield. In most cases, especially where larger, higher priced items are concerned, it’s always best to use an alternative like Craigslist or the newspaper.


15 Responses to 'Consumer Scam Warnings About Selling on eBay'

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  1. Michelle Fawkes
    posted on December 1st, 2011

    I was the victim of a Ebay scammer who purchased a $1500 Coach handbag and claimed it was a fake. Without any proof, Ebay took the $1500 from my bank account and let the scammer to keep the handbag and the money. I have the original receipts from Coach but Ebay didn’t care until I filed a police report and contacted a lawyer.

    The real kicker is that the same buyer scammed a bunch of other sellers for purses and Ebay did nothing about it.

    I will never buy or sell on Ebay ever again after this terrible experience.

  2. Terry W.
    posted on December 1st, 2011

    I think I’m getting scammed by a buyer who reverse the payment after I shipped. I got this notice from paypal today ….

    We were recently notified that a payment you received was reversed by the buyer’s bank. A bank reversal can be requested by the bank itself or the bank account holder.
    Transaction Id: xxxxxxxxxxxxxxxxxxx
    Transaction Amount: $788.99 USD
    Email: xxxxxxxx@xxxxxx.com
    We have placed a temporary hold on the funds until our inquiry is complete.
    We are reviewing the bank reversal and will contact you again via email with information on what to do next. You may be asked to provide additional information about this transaction.

  3. simple99
    posted on December 2nd, 2011

    eBay and Paypal are the biggest scam companies on the internet.

  4. Edward Hutchinson
    posted on December 2nd, 2011

    Another common buyer scam is when international buyers edit their invoice to not pay for shipping.

    You need to set your eBay account prefrences so that buyers can not edit invoices. I have no idea why eBay even allows this option where a buyer can edit the invoice??? It makes even less sense why this setting is the default!!!

    Go to your My eBay -> Account -> Site Prefernces. There you can block buyers from being able to edit invoices.

  5. Danny
    posted on December 4th, 2011

    I have been selling on eBay since 2005. I have over 2500 transactions during that period of time and I have worked my fingers off to maintain my reputation. My 100% perfect feedback score has been a source of pride for me.

    Forget that, now some PITA buyer just destroyed 5 years of perfect feedback by not paying for an item and leaving false negative feedback for me! Ebay has refused to remove the negative feedback and now my perfect reputation is ruined!

    After all the money I pay them in fees, for eBay to allow this to happen and from a buyer who didn’t even complete the transaction is insane.

    I’m quitting eBay. What a waste.

  6. Martine Droubay
    posted on December 7th, 2011

    I was reading the good advice here and had a sudden horrible feeling because I had not been using any confirmation for delivery of my Ebay sales. I’ve only done 20 or small sales so far but my husband and I were going to try and sell an antique watch we inherited recently. I guess I’m too trusting but after reading this I think we’ll try an ad in Craigslist first.

  7. eekhorn
    posted on December 8th, 2011

    Edward Hutchinson - you truly suck even a monkey knows that international buyers are not out to scam like you make them out to be. Get a life and learn to do a good job as a seller or get the hell off eBay.

  8. Vaughn Thate
    posted on December 8th, 2011

    I am pretty sure simple99 doesn’t know what he’s talking about, lol. Every business has risks but you can limit them by following simple procedures like outlined here. Anyways, pretty good post and I hope to read more like it soon. Have a great holiday season.

  9. Kathryn MacMillan
    posted on December 14th, 2011

    So sad for the commenter Danny, an all too familiar tale. Years of excellent feedback and customer service apparently don’t mean a thing to eBay. I guess the commenter who told him to get the hell off the site hasn’t had the experience yet. I haven’t, which I consider a case of sheer luck but I am familiar with many reputable, professional sellers who have. I don’t need to worry anymore, I sell elsewhere.

  10. florida33549
    posted on December 14th, 2011

    Left the bay a long time ago because of fees. Not surprised to hear things aren’t any better over there now.

  11. florida33549
    posted on December 14th, 2011

    Left the bay a long time ago. Not surprised to see this article. It’s all over the web regarding the buyers on the bay these days and how there is no protection for sellers.

  12. Roger Reckling
    posted on December 14th, 2011

    eBay is the only place I know of where someone can buy a product and not pay for it… it’s done all the time. Bidders win an auction, then simply not pay. In the mean time your inventory is tied up for a bare minimum of one week and sometimes much longer

  13. Katherine
    posted on December 14th, 2011

    USPS International has no Online signature delivery option. For items in excess of $250.00 NO USPS INTERNATIONAL product meets the minimum requirements set by both Paypal and Credit cards.
    Further FED EX does not collect customs fees and they can be back charged to the shipper for up to a year. UPS does collect customs fees and is thus the less appreciated as the shipping method for many international customers.
    Yes many international buyers do attempt to change shipping amounts if the invoice allows them to do so.

  14. Jen
    posted on December 14th, 2011

    Danny, If you filed and won the UPI (unpaid item dispute) on that sale, then ebay will remove the negative feedback. Here is the policy. http://pages.ebay.com/help/policies/feedback-removal.html

    Terry W, quickly contact your local post office and tell them the delivery confirmation number on the package and have them reroute it back to you.

    Martine D, if it sells for $250 or more, add signature confirmation and buy insurance from a company other than USPS for any items you worry about like that. That covers non-delivery and or damage.

  15. Gravino
    posted on December 14th, 2011

    It’s a shame you don’t have a donate button! I’d without a doubt donate to this brilliant blog! I suppose for now i’ll settle for bookmarking and adding your RSS feed to my Google account. I look forward to fresh updates and will share this site with my Facebook group. Talk soon!

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