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Seller Hazards on eBay & PayPal

By Richard

Both eBay and PayPal attempt to provide greater transaction protections to Buyers, than to Sellers. So does the Federal Trade Commission, and other government agencies. A casual perusal of the online world will yield dozens of cases where Buyers were assisted in addressing claims against dishonest Sellers. While the process in some cases was lengthy, most cases appear to be settled in the Buyers favor.

However, what protections are available for Sellers against dishonest Buyers? Huh? you ask. Surely Sellers are protected against fraudulent and dishonest online transactions. As in the TV ad for Hertz, it’s more “not exactly”. Also, when the transaction includes both eBay and PayPal, a Seller ends up with less protection than if just one entity were involved.

Some of the ways Sellers are taken advantage include:

Buyer claims product was not received from the Seller

Buyer claims product was not as described in the auction listing

Buyer overpays for an item with a check, and requests difference be refunded to them

Buyer threatens to leave negative feedback against Seller if certain conditions not met

Buyer claims product was damaged in transit

Buyer removes, substitutes, briefly uses, or damages product on purpose, then demands a refund

Buyer seeks chargeback from their credit card issuer for a variety of reasons

Buyer is underage using false pretenses to obtain product

Buyer has a new account and doesn’t care about their feedback, rating, or standing with eBay or PayPal

Buyer bids on an item, then does not follow through with purchase, or attempts to impose conditions on how they will complete the transaction

Buyer requests delivery to a site that does not offer delivery verification, especially for international shipments

In most cases, both eBay and PayPal take steps to protect themselves first, Buyers second, and Sellers last. If there is a problem transaction, the first thing these services do is seize retributive funds from the Seller, and not just the winning auction amount; but actually including shipping costs, regardless of Seller’s clearly stated terms that shipping costs are non-refundable. They do not, however, release the monies they obtained from the transaction in listing and closing fees. They can get away with doing this based on the Conditions of Use agreement approved by Buyers and Sellers as a condition of using their service.

It is thus, extremely easy for a Seller to be out the selling fees, out the money received for the product, minus the product, receive negative feedback, and have to spend several hours dealing with replies, paperwork and email messages about the transaction for a month or more, and in the end coming out with a product damaged beyond salvage condition due to actions by the Shipper and Receiver, with absolutely nothing positive to show for the transaction.

And the really atrocious element in this is the almost utter lack of effective protections a Seller can put in place to prevent or ameliorate these transaction. However, there are a few thing Sellers can do to lessen the likelihood of being subject to the down side of selling on eBay, and receiving payment via PayPal.

Do not add a bank account to your PayPal account. Take funds out by having PayPal send you a check instead of direct bank transfers

Do not keep a balance in your account larger than you would feel comfortable with if it were seized in its entirety

Pay for eBay fees directly from your PayPal account rather than giving eBay access to another credit card or your bank balance

Always ship by FedEx, DHL, or UPS, and require recipient signature by an adult

Never ship anything that does not have a tracking number assigned to it, with full value insurance on the item

Be extra cautious about drop shipping product, or shipping to a PayPal unconfirmed Buyer

Try to include product and serial numbers of the item in the listing, and put the onus on the Buyer to confirm the products suitability to task

Never include objective evaluative comments about the product if it is not new in the factory sealed box

Use different processes, or accounts, for potential claims based on perceived vulnerabilities

Never offer a refund, exchange, or adjustment without an explicit release from the Buyer in hand

Do not waste your money, and time agreeing to Square Trade representation unless your items are new in the box, or are high dollar

Plan on receiving severely damaged goods back from the Shipper if they pick it up to process a claim

Understand up front that a product shipped internationally will take at least two months to be returned to you, and it will almost never be in the same condition as it was when you shipped it.

Forget about receiving effective, timely, or judicious replies from eBay or PayPal to any phone or fax messages you feel tempted to send

Do not threaten legal actions, or state what you will do. Either do it, and await responses, or don’t waste time/money/effort in what will most likely be a lost cause.

Post your negatives about eBay and PayPal to any and all appropriate venues

Present your rebuttals with only factual statements

Don’t be in a hurry to do anything in response. Time is on your side once eBay/PayPal have seized your assets.

Understand that 90+% of your transactions will be flawless, pleasant, and beneficial

Immediately add problem transaction buyers to your eBay prevented bidder list

Forget escrow accounts unless you like living dangerously

Always allow sufficient time for checks, wire transfers, and credit payments to clear before shipping product

Beware of any Buyer who is “in a hurry” or requests special treatment

Understand that the more correspondence you have with a Buyer before a sale indicates it will take that much time to respond to them after the sale

If you have a “Nervous Nellie” bidder, you are fairly likely to have a Buyer with “Buyers Remorse”

A Buyer who pays with PayPal expects shipment to occur almost immediately, and may get “ticked off” if it is not shipped promptly

For maximum protection against possible chargebacks, use Western Union BidPay, or Certified Checks

Never give out your personal information if you can possibly avoid doing so; especially your SSN# or your Banking Account information

Do not allow any company direct withdrawal access to your primary checking account, especially if you have overdraft protection

Come up with a value on your time/effort per episode for a standard chargeback or transaction challenge, and settle immediately if the time/effort value indicates it would be cheaper to settle rather than get involved in defending the claim.

Act with the knowledge that any oversize shipping carton, or item weighing more than 50 pounds will be handled very roughly by carriers

And remember, negative feedback is much worse for you than it is for a Buyer

And finally, keep abreast of changes to the online marketplace. Be pro-active in response to edicts from eBay or PayPal that you discern may adversely affect you or others. Have fun, and don’t let the bastards grind you down!

Posted: April 20, 2012 at 6:57 am

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