Thinking of Selling on eBay using Paypal? Think Again(codenerdz.com)
codenerdz.com
Thinking of Selling on eBay using Paypal? Think Again
http://codenerdz.com/blog/2012/12/03/think-of-selling-on-ebay-using-paypal-think-again/
388 comments
I stopped selling things like this on eBay a long time ago because I do not sell things frequently enough to keep up with the scams du jour.
My local craigslist is where my for-sale items now go. Sure, I may get a little less than top-dollar for an item, or it might take a little longer to sell, but I'm never left with some after-the-fact dispute where I have no control (note: I'll only accept cash).
eBay was fun while it lasted, but then it became a giant flea market with basically semi-pro retailers looking to sell things, and a whole bunch of random scammers. Intermixed in all that was the occasional legitimate "amateur" seller.
For the very few times I've purchased something on Ebay in the last few years, it's always been from "pro" sellers with storefront type setups. The hassles of dealing with amateurs selling poorly described items, taking too long to ship, etc. was also not worth the "deal" I was getting.
A true "amateur to amateur" auction type sales website is an area begging for competition...
My local craigslist is where my for-sale items now go. Sure, I may get a little less than top-dollar for an item, or it might take a little longer to sell, but I'm never left with some after-the-fact dispute where I have no control (note: I'll only accept cash).
eBay was fun while it lasted, but then it became a giant flea market with basically semi-pro retailers looking to sell things, and a whole bunch of random scammers. Intermixed in all that was the occasional legitimate "amateur" seller.
For the very few times I've purchased something on Ebay in the last few years, it's always been from "pro" sellers with storefront type setups. The hassles of dealing with amateurs selling poorly described items, taking too long to ship, etc. was also not worth the "deal" I was getting.
A true "amateur to amateur" auction type sales website is an area begging for competition...
OP here.
Interestingly enough, my conversations with Paypal became more and more surreal and I felt more and more powerless with every one in the end.
I had a trail of information and there was evidence of multiple fraud, but I never felt as powerless as I did after my phone calls with Paypal.
I am in contact with the police captain in the small town where the item was shipped, but I have very little faith in their ability to recover it.
I will file a local police report as well and try to appeal with paypal.
Meanwhile i want everyone to be aware that the so-called Seller Protection is totally worthless, since thats how Paypal chooses to pursue a legit fraud case.
I am in contact with the police captain in the small town where the item was shipped, but I have very little faith in their ability to recover it.
I will file a local police report as well and try to appeal with paypal.
Meanwhile i want everyone to be aware that the so-called Seller Protection is totally worthless, since thats how Paypal chooses to pursue a legit fraud case.
That's a variant of one of the oldest scams in the book on EBay. Removing seller feedback actually fixed the issue, at least for buyers.
Back in the day, the formula for an EBay sell-side scammer was to:
1 - Setup a phony account, or network of accounts.
2 - start selling small value things to each other. (Postcards, keychains, digital pictures, etc) Leave positive feedback, including nonsensical feedback (ie. My laptop works great, A++++ for a $0.99 recipie).
3 - Wait a few months for the active links to the auctions to be de-activated by EBay
4 - Start selling a dozen high-value items like laptops. Ship nothing or empty boxes.
5 - Withdraw funds asap.
Now the same scheme works, but only in reverse for high-value items that have immediate cash value.
Solution: Never use EBay for anything.
Back in the day, the formula for an EBay sell-side scammer was to:
1 - Setup a phony account, or network of accounts.
2 - start selling small value things to each other. (Postcards, keychains, digital pictures, etc) Leave positive feedback, including nonsensical feedback (ie. My laptop works great, A++++ for a $0.99 recipie).
3 - Wait a few months for the active links to the auctions to be de-activated by EBay
4 - Start selling a dozen high-value items like laptops. Ship nothing or empty boxes.
5 - Withdraw funds asap.
Now the same scheme works, but only in reverse for high-value items that have immediate cash value.
Solution: Never use EBay for anything.
Since you shipped via USPS, the buyer has committed mail fraud. Call the US Postal Inspection Service, they are federal agents with no jurisdiction issues as the local police will have.
http://en.wikipedia.org/wiki/United_States_Postal_Inspection...
Edit: USPIS Wikipedia link
http://en.wikipedia.org/wiki/United_States_Postal_Inspection...
Edit: USPIS Wikipedia link
A few years ago I sold an Android phone on eBay. A scammer bought it, claimed it was broken, and filed a claim with PayPal. The guy sent me back a different phone of the same model that was indeed quite broken. I appealed to PayPal and lost. I got screwed in this case, but frankly I'm not sure what PayPal/eBay is supposed to do about this sort of scam. Dude even swapped the sticker with the serial number from inside the case.
The Paypal dispute system is a joke. I had a simliar experience with a $300 laptop. The condition it came in was NOT as described. I tried to get the seller to refund, but he just ignored my messages. Unable to contact the seller, I opened a dispute case and I took photos, documented the entire thing, and even did the dispute message system (and the seller didn't respond once to my complaints within the dispute system).
After 3? weeks of no response, I clicked escalate button to firm up the dispute and push it to Paypal so they could decide. I thought I had a clear cut case -- photos, documentation, 21 days of seller not even trying to defend himself.
Seller, upon getting the final warning, finally replied with a message along the lines of "I offered a refund but buyer never contacted me" with no proof... and Paypal voted in his favor.
Fuck Paypal.
After 3? weeks of no response, I clicked escalate button to firm up the dispute and push it to Paypal so they could decide. I thought I had a clear cut case -- photos, documentation, 21 days of seller not even trying to defend himself.
Seller, upon getting the final warning, finally replied with a message along the lines of "I offered a refund but buyer never contacted me" with no proof... and Paypal voted in his favor.
Fuck Paypal.
> " If youre thinking of selling an expensive item on eBay, think again. "
I would say, this type of fraud is exclusively targeted at cellphones, ipods, netbooks etc. If you're selling something like an antique grandfather clock, you should be fine. Of course anything that requires collection, or couriering is going to be more traceable and secure.
I have sold hundreds or maybe thousands of items on eBay. The only one I ever had a problem with was trying to sell an old iPod. As soon as it was listed the scamming started by fraudsters.
I would say, this type of fraud is exclusively targeted at cellphones, ipods, netbooks etc. If you're selling something like an antique grandfather clock, you should be fine. Of course anything that requires collection, or couriering is going to be more traceable and secure.
I have sold hundreds or maybe thousands of items on eBay. The only one I ever had a problem with was trying to sell an old iPod. As soon as it was listed the scamming started by fraudsters.
Unfortunately, buyer protection is just as bad!
I recently bought an item on Ebay from an Ebay shop in China and paid extra for EMS shipping because I needed it fairly quickly (less than 2 weeks). The seller sent using a non-EMS method that barely got to my door in time, and it was the wrong item completely! When escalated to Ebay, they would only refund the item and original shipping fee and only if I sent back the item and paid for my own shipping to send it back.
I later learned that the seller was out of stock for the item, and figure that they must have sent the wrong item purposefully (since you're not supposed to be selling something you don't actually have).
But there's no way to actually contact Ebay support, so there was nothing I could do. Really going to avoid Ebay from now on because of that poor experience. No protection on any side.
I recently bought an item on Ebay from an Ebay shop in China and paid extra for EMS shipping because I needed it fairly quickly (less than 2 weeks). The seller sent using a non-EMS method that barely got to my door in time, and it was the wrong item completely! When escalated to Ebay, they would only refund the item and original shipping fee and only if I sent back the item and paid for my own shipping to send it back.
I later learned that the seller was out of stock for the item, and figure that they must have sent the wrong item purposefully (since you're not supposed to be selling something you don't actually have).
But there's no way to actually contact Ebay support, so there was nothing I could do. Really going to avoid Ebay from now on because of that poor experience. No protection on any side.
This would only work in major cities, but I always thought there was a business in having a physical escrow service aimed specifically at selling small, high-value items. You sell an item online, deposit it with the company (who takes a small cut; you could even mail it to them), who then pass it on to the buyer when payment is confirmed. The company can confirm it's in working order, and take some photographs for proof.
Much more pleasant for both buyer and seller. No more news stories of people getting mugged after an online ad, no more scammy eBay purchasers, the lot.
Much more pleasant for both buyer and seller. No more news stories of people getting mugged after an online ad, no more scammy eBay purchasers, the lot.
I'd recommend contacting all the carriers that this phone is compatible with, and tell them that the phone has been stolen. Give them the IMEI number, serial number and whatever else.
If you can get law enforcement interested in the case (highly unlikely, but who knows), they should be able to issue a search warrant, and get the location of the phone from the carrier. If they can track it down to a residential address, then they may be able to find the actual person.
It would be helpful if the other sellers also had remotely trackable items. Regardless, you'll want to be coordinating with them on the item descriptions.
If you can get law enforcement interested in the case (highly unlikely, but who knows), they should be able to issue a search warrant, and get the location of the phone from the carrier. If they can track it down to a residential address, then they may be able to find the actual person.
It would be helpful if the other sellers also had remotely trackable items. Regardless, you'll want to be coordinating with them on the item descriptions.
Meanwhile, as a purchaser on Paypal, you only get 45 days after the day of the transaction - which caught us out last week.
We ordered some stuff from (at least theoretically) a reputable company. We had to pay about 2 months ago, but kept getting emails telling us that the stock hadn't arrived yet and to just be patient. Then a couple of weeks ago, they told us that they actualy didn't have the stock and that we'd have to get a refund. But they were refusing to respond to any of our requests for the refund, so we contacted Paypal and they told us that we'd missed out on the 45 day window and they couldn't help us.
The company we ordered from eventually (after over a week of chasing) paid up, but if they hadn't we would have been left high and dry by Paypal.
We ordered some stuff from (at least theoretically) a reputable company. We had to pay about 2 months ago, but kept getting emails telling us that the stock hadn't arrived yet and to just be patient. Then a couple of weeks ago, they told us that they actualy didn't have the stock and that we'd have to get a refund. But they were refusing to respond to any of our requests for the refund, so we contacted Paypal and they told us that we'd missed out on the 45 day window and they couldn't help us.
The company we ordered from eventually (after over a week of chasing) paid up, but if they hadn't we would have been left high and dry by Paypal.
I don't have much sympathy for this seller.
- General Delivery is a big red flag, paypal confirmed or no.
- You should check buyer feedback in advance, not afterwards.
- don't leave feedback until you have the cash in your own bank account.
- For expensive items, don't just get signature confirmation, pay the extra few $ for insurance. I insure anything over $50, for two reasons: you can claim against the insurance if the buyer alleges the goods are damaged/missing, and if the buyer is scamming then the insurance means they're trying to commit fraud against the carrier, who are more likely to prosecute it aggressively. This is also why I prefer to ship via the post office. Sorry, but if you shipped an $850 item without insuring the shipment, you're foolish.
- General Delivery is a big red flag, paypal confirmed or no.
- You should check buyer feedback in advance, not afterwards.
- don't leave feedback until you have the cash in your own bank account.
- For expensive items, don't just get signature confirmation, pay the extra few $ for insurance. I insure anything over $50, for two reasons: you can claim against the insurance if the buyer alleges the goods are damaged/missing, and if the buyer is scamming then the insurance means they're trying to commit fraud against the carrier, who are more likely to prosecute it aggressively. This is also why I prefer to ship via the post office. Sorry, but if you shipped an $850 item without insuring the shipment, you're foolish.
Note, I think PayPal are in many cases some sly devils doing some nasty things, in this case it sounds like they went to bat, had the credit companies say 'nope' and that's that. Credit card companies will usually go in the favour of the buyer, because technically the buyer is them. This is an odd, and bizarre situation, but its why you always should buy fancy items on credit cards, as the credit companies don't like their money being mucked about with. The situation is heavily broken though, scammers on every side, the only option becomes taking legal action and that's very much a minefield.
Stop using eBay and Paypal.
If you look, you can find stories like this every week since about 1999. This sort of behavior isn't new yet eBay continues to grow.
If you look, you can find stories like this every week since about 1999. This sort of behavior isn't new yet eBay continues to grow.
I've been scammed selling on eBay and will probably never sell there again, but if I did I'd want a cheat sheet of scam countermeasures. Here's a start based on the OP's safety checklist (points 3 through 5), comments in this thread, and my own experience.
1) Try not to sell on eBay. Perhaps Craigslist or another marketplace will work instead. Unfortunately, people in low population density areas are kind of screwed without an online marketplace.
2) Block all buyers from countries other than your own. In massive markets like the US, gaining a few more potential buyers is not worth the increased risk of fraud or loss during shipment. Perhaps in smaller countries this rule won't work as well.
3) Only sell to people with significant positive feedback.
4) Only ship to CONFIRMED Paypal addresses.
5) Require Signature Confirmation for items over $250.
6) Don't accept PayPal; require money orders for payment. This might scare off potential buyers. However, it has the benefit of taking PayPal and credit card chargeback schemes completely off the table.
7) Don't ship General Delivery.
1) Try not to sell on eBay. Perhaps Craigslist or another marketplace will work instead. Unfortunately, people in low population density areas are kind of screwed without an online marketplace.
2) Block all buyers from countries other than your own. In massive markets like the US, gaining a few more potential buyers is not worth the increased risk of fraud or loss during shipment. Perhaps in smaller countries this rule won't work as well.
3) Only sell to people with significant positive feedback.
4) Only ship to CONFIRMED Paypal addresses.
5) Require Signature Confirmation for items over $250.
6) Don't accept PayPal; require money orders for payment. This might scare off potential buyers. However, it has the benefit of taking PayPal and credit card chargeback schemes completely off the table.
7) Don't ship General Delivery.
Have you called an attorney? If you have one that you're on any kind of friendly basis, I've generally found that you can get a quick read on your case (30 minutes' worth of time) without any cost.
IANAL -- first and foremost -- but I would think the best tactic may be to go after PayPal to get them to discharge your supposed debt to them, given that you've already swept the money out. Their seller's assurance contract terms would seem to be vague around what is required for the item to be determined "not as received" -- also, as you mention, there is a a pattern on behalf of the seller -- is EBay/Paypal acting dilligently to protect your interest in return for your seller's fees and auction fees?
IANAL -- first and foremost -- but I would think the best tactic may be to go after PayPal to get them to discharge your supposed debt to them, given that you've already swept the money out. Their seller's assurance contract terms would seem to be vague around what is required for the item to be determined "not as received" -- also, as you mention, there is a a pattern on behalf of the seller -- is EBay/Paypal acting dilligently to protect your interest in return for your seller's fees and auction fees?
I tried to sell an expensive camera through eBay and after a month I gave up. Twice the auction completed and the person that won tried to scam me. I decided to go the Craigslist route and sold it in a few days to someone that I met at a local bank and we were both happy.
eBay were not very good, in my case, either. I spent hours on the phone. It was clear that the person that won the auction bid up to insure they won it. I'm pretty certain I had legit buyers at lower bids, and I would have been happy to sell at those bids. The reason I even tried a second time was that I didn't know about the ability to exclude certain buyers. For the second auction I tweaked all the knobs that massively restricted the auction to only the safest buyers. I don't know what happened, but someone with an account that was a few hours old won the auction. I think it was the same person that won it the first time. I called eBay again and they voided the auction after a few days.
It was a really horrible experience and I'll never use eBay to sell anything ever again.
eBay were not very good, in my case, either. I spent hours on the phone. It was clear that the person that won the auction bid up to insure they won it. I'm pretty certain I had legit buyers at lower bids, and I would have been happy to sell at those bids. The reason I even tried a second time was that I didn't know about the ability to exclude certain buyers. For the second auction I tweaked all the knobs that massively restricted the auction to only the safest buyers. I don't know what happened, but someone with an account that was a few hours old won the auction. I think it was the same person that won it the first time. I called eBay again and they voided the auction after a few days.
It was a really horrible experience and I'll never use eBay to sell anything ever again.
just an FYI, guys. Due to virality of this post and the waves of support on twitter, I got phone calls from both paypal executive offices and ebay's fraud teams that not only did resolve my issues, but also hinted at a serious effort at apprehending this fraudulent individual.
Its very unfortunate that it took this community outcry to get this far. Im currently working on a "post-mortem" overview of my what happened in the past few days resolution-wise and ill post it on my blog.
Tech-wise, its pretty amazing how much load a static octopress-based blog hosted for free on github pages would handle.
Also im pretty glad I chose to host the pictures on picasaweb. Hosting them on S3 would turn out pretty pricey :)
Its very unfortunate that it took this community outcry to get this far. Im currently working on a "post-mortem" overview of my what happened in the past few days resolution-wise and ill post it on my blog.
Tech-wise, its pretty amazing how much load a static octopress-based blog hosted for free on github pages would handle.
Also im pretty glad I chose to host the pictures on picasaweb. Hosting them on S3 would turn out pretty pricey :)
Paypal is the most fraudulent company that I've done business with. There for I never sell anything anymore using it, purchase is ok but also risky. A friend of mine purchased an engine part on ebay but received a brick insted. Paypal then refused to give the money back because he had signed it out.
In total I've lost 1000's of dollars due to Paypal just handing it back to the fraudster. It doesn't matter what you say or what evidence you got. Me personally have never won a paypal dispute as a mercher.
My recommendation to other people, I know its a loss of customers but LibertyReserve, bitcoins or old fashion bankwire is as safe as it gets.
In total I've lost 1000's of dollars due to Paypal just handing it back to the fraudster. It doesn't matter what you say or what evidence you got. Me personally have never won a paypal dispute as a mercher.
My recommendation to other people, I know its a loss of customers but LibertyReserve, bitcoins or old fashion bankwire is as safe as it gets.
I actually wrote about this 6 years ago when eBay first started leaning their policy towards protecting buyers at the expense of the sellers. I went from selling things on eBay regularly to never using them for anything. Especially an iPhone or any new "hot" item you will be inundated with scam bids. And as an additional slap in the face you can't even give a buyer negative feedback anymore so what's even the point of feedback? It reminds me of when the post office, in response to long lines, resolved the problem by removing all clocks.
I know this was in reaction to scammers placing fake auctions but eBay basically threw out the baby with the bathwater with their buyer protection policies. The scammers just moved to the buyer side where they enjoy lopsided protection.
This is my post from 2006 - a variation of the scam, but the seller protection is equally non-existant: http://verysimple.com/2006/08/13/ebay-laptop-scammers-part-i...
I know this was in reaction to scammers placing fake auctions but eBay basically threw out the baby with the bathwater with their buyer protection policies. The scammers just moved to the buyer side where they enjoy lopsided protection.
This is my post from 2006 - a variation of the scam, but the seller protection is equally non-existant: http://verysimple.com/2006/08/13/ebay-laptop-scammers-part-i...
Don't know if they're any good but the Economist just wrote up EcoATM (http://www.ecoatm.com/) which lets you sell used phones at kiosks. You show up with your used phone and put it into the machine, which can apparently verify its make/model and condition, and lets a network of buyers instantly bid on it. If you choose to sell, the kiosk keeps your phone and you leave with cash.
Social Engineering adapted for Paypal scamming. This is yet another proof of that Paypal Seller Protection is basically worthless.
I sell things very rarely on eBay - recently I got an old Laptop at a garage sale that I realized I had no use for and went ahead and sold it.
Thankfully everything went well (I think the period for chargebacks has expired), but I had this awful feeling for a long time after the auction that something dodgy would happen. Every time I sell, I feel like I'm playing Russian Roulette.
Like a lot of the other commenters, I'm not sure why more hasn't been done to help the sellers out. Shouldn't it be clear that it's a scam if a buyer does a CC chargeback, given that it's easy enough to file with Paypal? Also, wouldn't giving sellers the option to only accept payment via a bank account help?
Thankfully everything went well (I think the period for chargebacks has expired), but I had this awful feeling for a long time after the auction that something dodgy would happen. Every time I sell, I feel like I'm playing Russian Roulette.
Like a lot of the other commenters, I'm not sure why more hasn't been done to help the sellers out. Shouldn't it be clear that it's a scam if a buyer does a CC chargeback, given that it's easy enough to file with Paypal? Also, wouldn't giving sellers the option to only accept payment via a bank account help?
It sucks to be among the most gullible 1% of buyers or sellers in a marketplace, weighted by sales volume.
In first-world markets, overall fraud is around 1%. But since experienced buyers and sellers learn to avoid it, the least experienced ones absorb most of the losses.
Whether you're in the most gullible 1% depends on who else you're competing with. For example, if you're selling a used car, you have to be fairly dumb to be in the most gullible 1% since lots of regular people do the same.
But the vast majority of iPhones on eBay are sold by sophisticated, professional, full-time merchants. So unless you have inside knowledge, you probably are in the most gullible 1% of iPhone sellers on eBay.
In first-world markets, overall fraud is around 1%. But since experienced buyers and sellers learn to avoid it, the least experienced ones absorb most of the losses.
Whether you're in the most gullible 1% depends on who else you're competing with. For example, if you're selling a used car, you have to be fairly dumb to be in the most gullible 1% since lots of regular people do the same.
But the vast majority of iPhones on eBay are sold by sophisticated, professional, full-time merchants. So unless you have inside knowledge, you probably are in the most gullible 1% of iPhone sellers on eBay.
I'm stuck with $680 in chargebacks on paypal.
One gamer used a bank account to deposit funds into his account. 2-3 months later, he uses that same bank account, then files a chargeback for $680.
Even though he'd used that same bank account months earlier, on the same site without filing a chargeback somehow this time around he won the chargeback dispute.
I have no idea how that is common sense possible
One gamer used a bank account to deposit funds into his account. 2-3 months later, he uses that same bank account, then files a chargeback for $680.
Even though he'd used that same bank account months earlier, on the same site without filing a chargeback somehow this time around he won the chargeback dispute.
I have no idea how that is common sense possible
I would have expected David Marcus (PayPal CEO) to chime in by now but apparently not.
Counterparty risk is definitely a hard problem to solve but this situation seems easy to solve: if the buyer is complaining "not as described", there should need to be some sort of attempt to return the item (at seller's expense or split).
Counterparty risk is definitely a hard problem to solve but this situation seems easy to solve: if the buyer is complaining "not as described", there should need to be some sort of attempt to return the item (at seller's expense or split).
The absolute, 100% way to solve this is to let sellers decide who can bid/buy on their items. If I can say "Only users who have been on ebay X months/years with Y feedback" that is such a major awesomeness. It also puts the control back in my hands. Maybe I dont get as much money when I sell a item, but I have way less risk of getting fucked.
Also, it would not stop new ebayers from being able to buy things. eBay could 'eat the risk' or make them guarantee if a seller set up his auction that way.
Also, it would not stop new ebayers from being able to buy things. eBay could 'eat the risk' or make them guarantee if a seller set up his auction that way.
While I'm sure that there are probably thousands, if not tens-of- and hundres-of, perfectly happy and valid sales of high-value electronics on eBay every day using Paypal, I would rather give something like that away as a Christmas present than try to sell it on eBay.
This seems like a credit card/bank problem, it's not unique to paypal.
I was thinking about upgrading my phone and ebaying the old one. After reading this, I'm thinking maybe I'll go the craigslist route, or one of the online trade-in deals.
Does gazelle have this same issue? I'm not sure if Gazelle the company buys the product and sells it, or if they just connect me with a buyer like ebay does.
I was thinking about upgrading my phone and ebaying the old one. After reading this, I'm thinking maybe I'll go the craigslist route, or one of the online trade-in deals.
Does gazelle have this same issue? I'm not sure if Gazelle the company buys the product and sells it, or if they just connect me with a buyer like ebay does.
There is no other explanation for getting rid of buyer reputation and providing no protection to sellers. They only want people who don't care about buyer reputation, and have deep enough pockets and the expectation that chargebacks and fraud will occur. If they deal with these larger customers, this increases their selling volume (and fees) and decreases their support costs.