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Dealing with Fraud Buyers

How to manage risk as a seller Unfortunately, as an eBay seller there is no way for you to avoid buyer fraud entirely. It happens on eBay, and depending on the type of goods you sell, it may happen a lot. Buyer fraud, however, is not a phenomenon unique to eBay. It is also rampant in the "offline" world in similar measures by product type. Buyer fraud can include: ? Unwarranted returns.

Often these occur when a buyer purchases, then either uses an item or exchanges component(s) in it for broken components from a similar item, then attempts to make a return for a refund. ? 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. Often this takes the form of feedback or credit card (including PayPal) chargeback threats?the buyer promises that something bad will happen to the seller or the seller's ability to do business if 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 of which can leave the seller holding the bag. Also common are bad checks or bad money orders. ? Auction tampering. This less common but no less damaging type of "buyer" fraud doesn't include a real buyer at all, but rather someone who wins every one of a seller's auctions (whether using the Buy It Now button or by 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, sometimes acting through sham accounts so as not to be caught.

With the exception of auction tampering, each of these types of buyer fraud are age-old problems for retail stores as well, and eBay sellers certainly aren't immune to them. Can you defend yourself? You can, to some extent. Read on to find out how.

Steps you can take to combat bad buyers There are a few simple steps that you can take to try to counter the most common types of buyer fraud. Though they aren't by any means a panacea, they can at least offer you some cover in dispute resolution and some hope of a positive outcome: ? Cover yourself in your item descriptions. Always state both the condition of your item and the entirety of your return policy very clearly and adamantly in your item listing. If you will accept returns or exchanges on the item, state also the limits of your return or exchange policy, including time limits, restocking fees, and shipment responsibilities/refunds. For AS-IS items, clearly state "This item is sold AS-IS, with no warranty expressed or implied, no refunds or exchanges will be granted for any reason whatsoever; BUYER BEWARE!" ? Don't be afraid to leave negative feedback.

Negative feedback is the only way other sellers have to know about your horrible experience with a bad buyer. As a seller, it may help you to think of feedback as a kind of seller's union?if all sellers leave clear feedback about all buyers, every seller will have that much more potential information about trading partners at his or her fingertips. Furthermore, eBay members whose feedback descends far enough into negative territory are automatically suspended?meaning that negative feedback is also a great way to eventually get bad buyers off of the site. ? Block difficult or problem buyers from your auctions. Use the tools on the eBay website to cancel bids from or block buyers with whom you've had problems in the past so that they are not able to bid on your auctions any longer.

If you have blocked a bidder and suspect that they have come back under a new user ID to bid again, contact eBay and report it. They will likely be suspended as a result. ? Keep proof of shipment and delivery on hand. When a buyer opens a dispute with eBay or a credit card company, your best defense as a seller is to keep a copy of all shipping information on hand, including delivery date as certified by the shipper. Often such documentation alone is enough to decide a case in the seller's favor. As an aside, if as a seller you aren't using trackable shipping methods for your auctions, consider starting now.

? Report bad buyers immediately. In the cases of auction tampering and payment fraud, notify eBay immediately. Not only does eBay take the threat of fraud and site tampering very seriously, they will also take steps to ensure that such members are banned from the site and (whenever eBay is aware of them) kept out.

? Take payment fraud prevention measures. Both PayPal and most financial institutions hosting merchant accounts have clearly stated policies about the relationships between accepted payments and account information for those payments (including names, shipping addresses, and other information). Read the seller account information provided by your payment processor for details on accepting payments and making shipments in ways that ensure minimal risk to you. ? Protect yourself from bad payments. Avoid accepting personal checks, money orders, and other forms of "paper" payment unless you are willing to accept the risk that they inevitably present.

If you accept PayPal payments, connect your PayPal account to a bank account dedicated specifically to your eBay activity, and empty it of funds regularly to ensure that no buyer can initiate a large chargeback or fraudulent claim and freeze an unduly large portion of your assets. There's No Perfect Protection Even after taking steps to combat buyer fraud, there is nothing you can do to avoid it entirely, nor will you ever be able to prevent angry emails from buyers who are unhappy, whether you feel that their reasons are sound or not. There also little that you can do to avoid negative feedback that you feel is unwarranted from angry buyers. eBay considers feedback to be an open forum in which members are free to speak their minds about one another, including about any disputes or disagreements that they've had. Ultimately, if you are a busy seller dedicated to good service, your positive feedback and positive sales revenue will always far outweigh any unwarranted negative feedback or the occasional (and inevitable) problem or fraudulent buyer.

At the same time, problem buyers often quickly accumulate negatives from unhappy sellers and are quickly removed from eBay as a result.

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