eBay Seller Life Hacks: How to Protect Yourself From Fraud

When eBay, the world’s biggest online auction site, first rolled out the company had a very hands-off approach to the way it did handled relations between buyers and sellers. Back when I first became a user in 1999, eBay’s general attitude was that they facilitated the transaction between buyers and sellers and did not take any responsibility for what happened after the bidding closed out. At that point, it was up to the buyer and seller to work out any problems. What this meant for site users was buyer beware. Once the money was out the door, there was no way to recoup your losses if an item became lost in the mail, arrived damaged or defective or you were swindled outright. The system operated on trust and feedback, a system where buyers and sellers could rate each other as positive, neutral or negative and provide a brief statement about the transaction so users could make an informed decision before they entered their bids.

Somewhere down the road, eBay changed their policies, going from a site that favored the seller, by providing no consumer protection at all, to a site that is so consumer friendly that seems to give carte blanche to fraudsters to pose as buyers and swindle sellers out of their goods and their money. All it takes it a complaint, no matter how erroneous or ridiculous, about the transaction and a fraudster can walk away with a high dollar item and full refund to boot. Worse, the feedback system has been tilted so sellers no longer have the ability to leave negative feedback to potentially warn others that a user is trouble.

I think eBay, with all its flaws that make it such a minefield, provides strong evidence in the fundamental goodness of the human soul. In its current environment all transactions could leave the seller holding the bag. From my own experience, it has only been a small percentage of my overall activity. When it happens it tends to be memorable. You are taking a hit to the wallet after all.

The biggest boon to the fraudster is the eBay automated resolution system. Most of the time, all a buyer has to do is mark “Product Not as Described” as the reason for the dispute, and it can amount to an instant refund for them. Their complaint can be something completely ridiculous that they don’t have to back up with evidence. There are horror stories on the eBay forums of eBay sellers forced to issue refunds after they receive empty boxes that were supposed to have supposedly defective iPads in them.

Solely based on my experiences over the last eighteen years, I have compiled this list of tips to help you avoid swindlers.

Don’t be afraid to use the targeted bidder blocking list– Ebay has some very generic blocking parameters to filter out the low hanging fruit. The handful of criteria you can block outright are people with unpaid bidder strikes and people with negative feedback, basically a person who came in the market as a seller, had some bad transactions right out the gate and then tries to place bids to buy items. While non-paying bidders are a nuisance that can tie up an item for weeks as you file for the right to break your agreement with this person, fraudsters are much worse. Non-payers only cost you time and headaches. You will eventually recoup your right to sell the item and get your auction related fees refunded. Swindlers steal from you.

There is another tool hidden in your account that lets you prevent specific bidders from buying from you by entering their user ID into a blocked bidder list. It’s an imperfect tool as it is reactive. You need to have some inkling that a person is up to no good, and in most circumstances, you won’t have much direct contact with a person before your auction closes. In the event you do get messages for prospective bidders, my recommendation is that if anything about them feels like a red flag, anything feels not quite right, put them on block list immediately.

Here are a few examples of what I consider problem customers who instantly throw up red flags to me:

The perfectionist– This is a person that messages you and wants to know every flaw, wrinkle, scratch or chip on your item. Sometimes they won’t settle for a description of any flaws or lack thereof. They want pictures from multiple angles. Sweet Lord above help you, if you miss something… The perfectionist is a risk to do business with because he or she is never satisfied. I could understand the obsessive stream of questions as to item condition if you were dealing with a custom, rare or expensive item but I rarely deal in the those sorts of items. It’s all mass market items with me that rarely exceed fifty dollars.

The reason I am including the perfectionist in an article about fraud is because I suspect that half the time, the extensive questioning is a set up so that if there is some undisclosed minor flaw on the product, they have ammunition to open a Not as Described Case against you. Or they are fishing for a person who is very responsive to all their demands on the assumption that someone who provides good customer service will release funds without much fuss when they inevitably try to claim the item is damaged. I have noticed that all the perfectionists I have ever dealt with the same mysterious coincidence repeat over and over again. No matter how well you package something it always arrives bent, broken or busted up. Save yourself the time and money. You never win when dealing with a perfectionist.

The cheapskate– The cheapskate doesn’t want to pay you what your item is likely to fetch. The cheapskate really hopes you are both ignorant of your item’s going rate and eBay’s policy. The cheapskate will usually email you early in the item’s auction run time before it’s seen much activity. Most people don’t bid until the final two days and will put something on their watchlist. The cheapskate asks you to end the auction immediately and accept some low ball figure that is not much higher than your opening bid price. Often the request will be badly worded with misspellings and grammatical errors to the point of being barely comprehensible. Don’t refuse immediately. Block them from bidding and then refuse. First, it is against eBay policy to close an item listing and make the transaction outside of the system. Second, with the system so easy to manipulate the cheapskate may try to go for the five fingered discount once they have to pay fair market price as they have already shown themselves to be a cheapskate.

The badmouther– This one is very self-explanatory. If at any point in an interaction you feel insulted or threatened, even if it’s veiled, block the bidder and end all communications. You may also want to forward to eBay customer service as a TOS violation. It may take multiple messages to figure out that you have a badmouther as they may first appear as a perfectionist who turns irate if you don’t comply with their many special handling requests.

Don’t be afraid to use bid cancellation. If you run across any of the three types in my rogue’s gallery or discover a new species and they have already bid, know that you can remove bids at your own discretion. Don’t forget to block afterwards. I have heard it recommended that for expensive items (expensive measuring how devastated you’d be to lose both the product and your eBay earnings), you may want to cancel and block any buyers with zero or few feedback. They are true unknown quantities, may be raw newbies that don’t understand how the system works and are difficult to deal with according to some sellers. I have found it’s usually the opposite. Most people are quick to catch on. Newbies are usually low maintenance and most importantly, they are willing to spend money. Most eBayers are very cheap in my experience. When you have a newbie, you stand a good chance of your auction bid price going way up.

If they still make you uncomfortable, here is one way you can get a feel for them. Click on their user profile. There is not a lot of data here but you see when they joined eBay. I’d say if they joined last week or last month, they are good. If they joined three years ago, block them. That is way too long to be a legitimate user and generate no activity. Chances are that they are a shill or ghost account, meaning they try to drive up the price of auctions to take them off the market. Say for example, you have a limited edition object that is not very common and can get fetch higher than its original list price.

These false accounts will enter the bidding war with the hopes of driving the item price until it out of the reach of most people. The shill will have a second account that has the same item up for the sale. The idea is to drive the people that would have bid on your auction over to theirs which is now cheaper than yours. If the shill is feeling nice, they will cancel their bid themselves before the auction goes into its last twenty four hours and all bids are locked in. That will collapse the price of the item but you stand the chance of recouping it if you haven’t lost all your watchers. If they are not, they will bid until they are the auction winner and never pay. This effectively takes your items off the market for at least a week as you go through the non-paying bidder reporting process.

Be careful with selling internationally. In my opinion, international sells are not worth it. Depending on what you are selling you may want to consider it, but I recommend really knowing what you are doing. Shipping international is very expensive, often more expensive than you would realize, so you have to make sure you don’t lose your shirt when you set your ship and handling rates. I’m even leery of selling to people who are international buyers but will ask you to send their item to either a friend or relative that lives in the US who will then take care of sending it out of the country. One thing to watch out for is a buyer who asks you to falsify the price of the item so it can get through customs without them having to pay duties. Do not do this as this is fraud.

Those are my tips for how to defend yourself from being defrauded on eBay. Unfortunately, there is not a lot you can do once the item is out of your hands so the trick is be proactive, be careful and to make sure that if you choose to take a risk, it’s one you can afford to take a hit on if you bet wrong.


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