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- Buyer Disputes and Claims (eBay and PayPal's Resolution Center)
eBay and PayPal have revised their resolution center to inadvertantly encourage buyers to defraud sellers. If a buyer determines the item you sold does not meet his or her satisfaction, the buyer can make up any claim, whether true or false, and get a full refund without your consent. In fact, the buyer can request a full refund from PayPal and return a box with anything (rocks, newspaper, etc.) to you, while meanwhile PayPal issues a full refund to the buyer without your consent or approval. The "significantly not as described" (SNAD) cases are on the rise as buyers are quickly learning that PayPal does not authenticate or verify buyers' claims on eBay items. When a buyer files a SNAD case, you not only lose the money you originally received without warning, you also risk losing the item you sold as the buyer may never return it to you. - Chargebacks
If you accept payment via Credit Cards or PayPal, buyers can easily get their money back sometimes with little hassle simply by opening a dispute with their credit card company or PayPal. In most credit card or PayPal disputes, the company rules in favor of the buyer 9 out of 10 times regardless of the circumstances. When chargebacks are processed, the money is automatically withdrawn from your account. PayPal advertises "seller protection" for eBay sellers, but the reality is you have to follow certain procedures verbatim to qualify, and even if you follow PayPal policies verbatim, the fine print allows PayPal to use their own discretion in choosing whether or not to actually protect sellers.
- Non-Paying Bidders
Unfortunately eBay sellers are faced with non-paying bidders, folks who bid on and win an auction, but never follow through and send payment. Non-paying bidders not only force you to list the item again to find a qualified winning bidder, but you also lose time and money in the process. For technology related items, non-paying bidders can result as often as 1 in 5 transactions. eBay no longer allows sellers to leave negative or neutral feedback on buyers' accounts, so buyers have absolutely no incentive to follow through and pay for eBay items. In addition eBay's unpaid item process is easily manipulated by buyers who provide fabricated payment details to eBay. - Invalid/Fraudulent Payments
Buyers can send you an unqualified payment from an invalid or fraudulent source (especially through PayPal), and then you ship the item only to discover days later the payment is reversed and taken out of your account automatically, without warning. PayPal advertises "seller protection," but in reality PayPal's "seller protection" is limited and only applies in a small number of situations. - Lost/Stolen Packages
If the package you ship to the buyer is lost or stolen in transit, you (as the seller) are actually held responsible for the package and liable to refund the money of the lost or stolen goods to the buyer (UPS, FedEx, etc. are NOT held liable to refund your buyer, even if the package is insured). The buyer can also claim he or she never received the package. Even if you require a signature, the buyer can still claim he or she never actually signed for the package (i.e. someone else signed for it). - Bid Shilling
A vast portion of transactions on eBay involve some form of fraudulent bid activity that is often disadvantageous to sellers. Bid shilling occurs when fraudulent bidders bid up the price of your auction only to cancel out at the last minute or fail to follow through and pay for the auction. - Bid Sniping
It is very easy to get ripped off on eBay. The closing or selling price on eBay is NOT guaranteed. Due to the nature of auctions, it is very common for auctions to close below fair market value when bidders "snipe" the auction by placing last minute bids, reducing competition among fellow bidders. With the economy constantly flucuating and the ongoing recession, closing prices on eBay are becoming less predictable and more susceptible to low closing prices. - Selling/Merchant Fees
Selling on eBay or accepting payment through PayPal involves numerous fees and commission rates that are deducted automatically from the closing price or through your seller account. For the average transaction, most sellers pay between $50-$200 in eBay and PayPal fees. If the buyer does not follow through and pay, you are forced to pay the additional fees in an attempt to resell the item. - Time is Money
eBay transactions involve numerous activities (testing, photographs, listing, questions, etc.) that require on average between 2-4 hours minimum per transaction. - Phishing Scams
Phishing scams are becoming more and more widespread among the eBay and PayPal communities. Phishing scams involve fraudulent e-mails or solicitations of personal information, aimed at gaining financial benefits.
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