Fraudsters posing as buyers have long been exploiting the system, but it looks like eBay is trialling a new way for sellers to fight back.
You don’t have to look very hard to find horror stories about sellers using eBay falling victim to fraudsters posing as buyers exploiting loopholes in the eBay Money Back Guarantee to steal goods.
The scams can happen to anyone - and typically all start the same way.
A seller will use the online marketplace to list an item and after the auction is over will request payment from the winning bidder. After receiving the money, sellers will dutifully package their item and send it off to the buyer’s listed address.
However, problems arise when fraudsters claim they never received the item or report the item they received wasn’t as described. This is when the system to protect buyers dubbed the eBay Money Back Guarantee comes into play.
How the Gurantee works
It means a buyer can ask eBay to intervene if their purchase doesn’t turn up or is not as described and the seller doesn’t offer a resolution within eight days.
If the buyer doesn’t get a response from the seller or isn’t happy with it, they can ask eBay to step in and help. eBay’s policy states it will review evidence like proof of signature to confirm delivery or photos of the item listed and if it determines the item wasn’t delivered or wasn’t as described, will reimburse the buyer at the seller’s expense.
But the scheme put in place to protect buyers is far from fool-proof and has left many sellers vulnerable to fraudsters who are manipulating the system to steal goods.
Check your credit report - free 30 day trial
Why the scheme can fall short
One reader contacted loveMONEY after selling her iPhone on eBay for £500. She got the money from the buyer paid into her PayPal account and posted the item. However, a week later she received a return from the buyer, which instead of the phone contained pieces of wood. After she signed for the box – providing a record that the return was accepted, the fraudster was able to contact eBay and get a refund, leaving the seller without a phone and £500 out of pocket. Read: Watch out for these eBay scams for more.
Fraudsters posing as buyers are often able to use tricks like this to trigger a refund. The system is open to fraud since the tracking number doesn’t show what was in the parcel and eBay apparently doesn’t mind, taking the tracking number for the recorded delivery as proof enough to issue the refund.
eBay buyer bias
When it comes to protection in the eBay marketplace, a lot of emphasis is on the safety of the buyers and keeping them spending.
Years ago, buyers and sellers could leave both positive and negative feedback, but now only buyers can leave negative feedback while sellers are just allowed to leave positive feedback after a transaction.
eBay says it changed the rules because, “when buyers did receive unfair negative Feedback, they usually decreased their shopping on eBay.”
In addition, any case opened by a buyer against a seller will show as a defect on a seller’s record even if the dispute has been resolved.
eBay’s website states: “As part of our new seller standards, we’re counting any activities we’ve found decrease a buyer’s likelihood to come back and shop with us again as defects”.
So when problems arise, sellers are finding they are not equally protected or given the same space to prove they have done no wrong.
Check your credit report - free 30 day trial
The eBay pilot programme
In January, eBay launched a pilot programme that shows the first signs of it addressing the imbalance and giving more rights to sellers.
A spokesperson admitted to the Observer: “There is something wrong. There is a small group of people who abuse the system which was built on the premise that most people are honest. It does need to become more intuitive.”
The Observer reveals the pilot programme is looking at a system where, if a buyer sends back a damaged or substituted item, the seller is not required to send an instant refund and can ask eBay to step in.
So rather than the buyer and seller having a week to work things out the pilot scheme means, if a seller requests, eBay can get involved immediately.
eBay says it's also testing a simpler system for the person who makes the decision, with photographic evidence playing a bigger part.
When we contacted eBay for more details a spokesperson said the pilot was still at a very early stage and that it will provide an update later in the year.
The official line was: ‘Of the millions of transactions on eBay each year, the vast majority are completed smoothly. But we want to make absolutely sure in the small number of cases where things don’t go so smoothly that our sellers are protected.
‘We hold a record of all Money Back Guarantee requests made on the site so that we can spot any irregularities. And we’re now going further, looking at measures which will offer even more protection to our sellers.’
How to avoid fraud on eBay
As eBay had nothing official to say about the changes, it looks like sellers we will have to wait for a wider rollout to feel the benefits.
But there are things you can do in the meantime to protect yourself when selling on eBay.
One way to guard against dodgy buyers is to specify what type of buyers are allowed to bid on and purchase your items.
You can do this by adding buyer requirements to your listings. These can block buyers that don’t have a PayPal account, have unpaid items recorded on their account or even those who just have a low feedback score.
It’s also worth paying extra for things like recorded delivery and even insurance when sending your item to a buyer.
You should also use PayPal to take payment and never post an item without first receiving the money. Also make sure you only use the address listed in PayPal.
Visit the eBay Safety Centre for more tips.
Destroy your credit card debt with a 0% balance transfer deal
More on eBay
26 eBay buying tips, tricks and tools
How to sell successfully on eBay