The Hidden Dangers Behind Selling on E-Bay

The hidden dangers behind selling on E-Bay

Are you selling on E-Bay? Chances are that at one time or another, you’ve either bought something or sold something on this popular online platform. As a Senior Downsizing Specialist, I’ve had plenty of opportunities to use E-Bay as a valuation resource or help clients sell unwanted items.

I’ve also used it to personally buy and sell items over many, many years. But, did you know there are hidden dangers to selling on E-Bay, or for that matter, any other online selling forum?

Until recently, I hadn’t had many issues with purchasing or selling. But my experience changed dramatically about a month ago when I experienced my first scam.

Given that so many of us in the downsizing and organizing industries use this resource almost daily, I thought it was important to share what I now know about using this forum.

Buyers Aren’t the Only Ones Being Scammed

The problem isn’t just scammers abusing the E-Bay system. I found out the hard way how E-Bay treats legitimate sellers who are being scammed by their buyers. Turns out that E-Bay is, in fact, hard-wired to only support a buyers claim regardless of the facts a seller presents.

Now I’m sure that there are unscrupulous sellers on E-Bay that scam buyers. It’s an unfortunate part of our e-commerce trade that there are rotten apples in every corner of the world taking advantage of people.

But you can be scammed by buyers as well. Luckily for me, the scam I experienced was a small loss, but that’s not always the case.

Common E-Bay Scams by Buyers

Here are 5 common buyer scams to watch out for if you use E-Bay or any other online selling source in your business.

1. Private Payment Outside of E-Bay’s System

A buyer contacts you through the E-Bay portal and gives some reason why they can’t pay via E-Bay’s purchasing system.

They negotiate with you to make the payment through another source. In cases of payment by check, it often turns out to be fraudulent and bounces after you’ve sent the item.

The buyer then disputes the transaction through E-Bay and claims that the item was broken. You have no recourse through E-Bay if they did not process the payment. Frankly, based on my personal experience, there’s little to no recourse even if you did.

2. Empty Box Claim

In this scam, the person purchases your item through E-Bay’s system. They then claim there was no item in the box and file a refund claim via E-Bay. In essence they accuse you of fraud. E-Bay will demand a return of their funds and the buyer retains the item and their money.

3. Buyer Claims They Never Received the Item

E-Bay has a PayPal “Seller Protection” Program that is supposed to protect sellers from scams like this. For a seller to be protected, they must be able to provide clear proof that an item was received by the buyer, including proof of delivery. A tracking number by a carrier may not be sufficient.

However, even for items under $750, without a signature by the buyer at delivery, there’s no way to prove they personally received it (think porch bandit excuse). The problem is few sellers are aware of these requirements. Scammers know this and put in a claim for a refund while keeping the expensive item.

4. Broken Replica Scam

A buyer purchases your item.  Upon receipt, they say it’s damaged or missing parts. They submit for a claim showing a picture of what looks like your item in its damaged state. In reality, they have simply used a damaged replica to get a refund and keep the pristine version you sent.

5. Unwarranted Chargeback

Most transaction protection policies are built around protecting the buyer. So, it’s easier for scammers to take advantage of legitimate businesses. Credit card protections are meant to protect legitimate buyers. But, scammers will use them to their benefit to cancel their transactions after you’ve shipped the item. The bank, or in this case E-Bay, will insist on a refund from you.

Watch for Additional Fees

Ready for a shocker? E-Bay will not only charge you a charge-back fee, but even a fee for having to facilitate the “claim” on behalf of the buyer instead of being a function of customer service. This happened to me in my personal scam case.

E-Bay customer service will tell you that, as a seller, you have an ‘opportunity’ to state your case and counter these scammer claims. However, in the end it is simply window dressing. It’s your word against the scammer and the scammer (aka protected buyer) will always prevail.

It made no difference that I had an unblemished seller rating. I have no complaints on file, bought and sold on their site for decades, and the ad posting clearly stated the item had a “no returns” policy.

How do you protect yourself and your business?

So, what do you need to know if you plan to continue to sell (or buy) on E-Bay?

  1. Know that E-Bay will not honor a seller’s “No Returns” policy, even though its clearly disclosed on the ad and a condition of sale.  
  2. Never go outside the E-Bay purchasing system if a buyer asks you to.
  3. Don’t accept checks as payment for a transaction.
  4. Always arrange to send an item with a tracking number and if it’s expensive, require a signature at delivery from the recipient.
  5. Sell jewelry at your own risk. Scammers have been known to buy expensive jewelry online, like diamond rings or necklaces, then replace the stones with fake replica’s, put in a claim of dissatisfaction that the item wasn’t real and request a return of their money, shipping a piece back to you that now is virtually worthless.
  6. Document, document, document! Take photos of items you’re sending, with all parts or attachments present. If it’s expensive jewelry, have it appraised so you can prove the item was genuine prior to sale. Keep a clear document trail of every transaction and be prepared to present it in a written report if a buyer tries to submit a fraudulent claim. However, even with documentation, this will not protect you given E-Bay’s Buyer-Preferred policies.  

If it sounds too good to be true, it probably is. If a buyer is making unique requests, like wanting you to send the item out of the country, request making unique forms of payments, or other red flag items, walk away to sell another day.

Know Your Risks

Understanding the security issues that you face when using a platform like E-Bay is important. Your personal and business reputation can be put at risk, let alone the time, money and stress of a transaction gone bad. You’ve worked hard to create a business with integrity, so proceed with caution.

For other ways to protect your business, check out my Business Start-Up Essentials Course for downsizing businesses.


P.S. Interested in learning more about downsizing to add to your current skillset? Check out the new Downsizing Made Simpler Series courses here!