How to Avoid Buyer Fraud as an eBay Seller

Manage Your Risk as an eBay Seller

There's no way eBay sellers can avoid buyer fraud entirely. In fact, depending on what you're selling, it can happen a lot. But it's possible to take action against the buyers in some cases. You can at least report the buyer on eBay and send up an alert when these types of actions threaten your income. 

Buyer Fraud on eBay 

Buyer fraud isn't unique to eBay. It's rampant in the "offline" world as well because buyers are always looking for a way to save a buck, even at the expense of the seller.

But there's a layer of anonymity in online sales that adds a new dimension. 

Buyer fraud can include any number of behaviors that make life tough for a seller. Some are actually illegal, but more often than not they're simply unethical. 

Unwarranted Returns 

These often occur when a buyer purchases then exchanges parts of the item for broken components from a similar item. Then he'll attempt to make a return for a refund.

But the most classic example of an unwarranted return is when the buyer actually uses the item then sends it back for a refund. Think prom time. The buyer purchases a dress, enjoys the night of her life, then returns it to you. In the worst case, she'll claim she's doing so because the dress is damaged in some way—damage she might be responsible for herself. 

Service Blackmail  

This occurs when a buyer uses some kind of leverage to obtain better pricing, additional goods or accessories, or enhanced service from a seller.

It often takes the form of feedback or credit card chargeback threats, including PayPal. The buyer promises that something bad will happen to the seller or the seller's ability to do business if his demands are not met.

Payment Fraud 

The most common types of payment fraud are credit card fraud and PayPal payments made with stolen accounts.

Both can leave the seller holding the bag. Paying with checks or bad money orders are also common methods. 

Auction Tampering 

Auction tampering is less common but no less damaging. This type of fraud doesn't involve a real buyer at all, but rather someone who wins every one of a seller's auctions whether he's using the "Buy It Now" button or bidding very high amounts with no intention of ever paying for any of them.

The perpetrators of such acts are generally either former buyers who are—fairly or unfairly—disgruntled or competing sellers. They sometimes act through sham accounts so as not to be caught.

How to Report eBay Buyers

With the exception of auction tampering, each of these types of fraud are age-old problems for brick-and-mortar retail stores as well. eBay sellers certainly aren't immune to them. Can you defend yourself? Yes, you can. 

eBay makes it particularly easy to report any issues you might have with buyers, particularly with regard to auction tampering. All you have to do is alert them and they'll look into the situation for you. They also have special policies in place for nonpayment, refund issues, and feedback problems.  

  • Open an unpaid item case if a buyer fails to pay you. eBay will assist in canceling the transaction so you can relist the item.
  • In the event of a refund/return problem, eBay will work with both you and the buyer, if possible, to work things out to everyone's satisfaction. And, of course, if the buyer has a history of such issues, eBay will take the appropriate measures. 
  • If you feel that responding to negative feedback is beneath you or won't do any good, you can dispute it and ask eBay to review the comment or comments.