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AuctionBytes Blog
Covering auctions, collectibles and marketplace selling.

AuctionBytes Blog The AuctionBytes Blog has been giving a voice to online merchants since its launch in 2005. Named one of the world's top 30 blogs in 2008 by "Blogging Heroes." Weigh in with your thoughts on the joys and pitfalls of selling online.
Tue Jan 22 2013 12:13:23

Successful eBay Seller Shares Anti-Buyer-Fraud Tactics

 By: Julia Wilkinson
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An eBay seller who has total sales of approximately $46,000,000.00 with a high ASP (average sales price) recently dug up some statistics that show how she has thwarted a number of buyers with mail-related claims who were likely scammers.

Sending an insurance affidavit (from her third-party insurer, U-PIC) to fill out, along with the "insurance fraud statement," to buyers who have "it's damaged" claims has led to 54% of these claims being dropped, she reports.

Another ploy the dishonest buyers sometimes use is to say they did not get tracking info from eBay, "so I want a refund." This sellers says 100% of these issues have been solved "with USPS actual tracking, and two had proper signature of delivery which led to some interesting emails after proof was shown." In other words, in the odd instance that USPS and eBay don't talk to each other vis-a-vis tracking, the buyer tries to take advantage of that to get a refund.

Some other stats she found:

- 100% of actual damaged items have had affidavits sent and items returned without incident.

- 70% of customers with items damaged that filled out affidavits and returned items, came back to purchase other items.

- Customs falsification requests have increased 25%.

In general, she said, "the insurance affidavit has been the best thing we have found to combat the guys who want off-eBay refunds."

This seller wants to emphasize that most of her buyers are great, but the cautionary measures need to be in place for that small number who are dishonest or scammers. "The bad buyers account for about 5% of our buyer base, and 95% of our buyers are great. I wish I could serve the 95% more fully, but because of the 5% (which when you do $4,000,000.00 in sales a year adds up fast), we have to put some pretty strong anti- fraud stuff in place."

Sure, legitimate claims will occur and occasionally things go wrong and customers need refunds: If a legitimate buyer has a item that gets damaged or has a problem, "we want to serve them fully, and I find they have no problem signing the affidavit so we can collect the insurance we purchase, and providing images and returning the item," she says. It's just the scammers who have a problem with this. "I want any customer who is harmed by damage to be made whole; that's why I purchase insurance," the seller said.

While I usually insure my high-priced items, I have not used third-party insurance yet. This seller's practice makes me rethink that, and I think I will look into it now. One thing I have noticed in my own selling business and anecdotally from other sellers is that customs fraud requests do happen frequently. The buyer usually is bemoaning the high customs tax, but in each case I simply politely explain that I cannot mark items as a "gift" and this could ruin my business, and so far no one has complained after that. But I know a seller who felt compelled to do so, until I made her aware of how serious that could be for her.

What kinds of buyer claims have you gotten that are fraudulent, or you think are fraudulent, most often? Have you tried the insurance affidavit, and if so have the results been good? Do you get a lot of customs falsification requests? Post a comment here!
Comments (19) | Permalink
Readers Comments

Successful eBay Seller Shares Anti-Buyer-Fraud Tactics   Successful eBay Seller Shares Anti-Buyer-Fraud Tactics
by: abprules This user has validated their user name.
       Web Site
Tue Jan 22 14:37:51 2013
Over the past holidays we have had an unusual amount of INR claims. Most of these were shipped via USPS flat rate priority and were insured with ebay's shipcover insurance. Because the claims were followed through and awarded to the buyer by ebay we felt compelled to file insurance claims.  Personally we believe most of the claims were filed because of customs issues since most had asked us to declare as a gift and most were over $100 USD. We were then told by the insurance company would no longer insure our packages.  Last year we had one Incident where we received receipt confirmation via email From the Swedish post master; eBay and PayPal said that because the tracking confirmation wasn't online they would not honor that. I do believe this is an issue that needs to be discussed. I believe there are good buyers and honorable people and there are those that have learned to abuse.  
Successful eBay Seller Shares Anti-Buyer-Fraud Tactics   Successful eBay Seller Shares Anti-Buyer-Fraud Tactics
This user has validated their user name. by: Philip Cohen
       Web Site
Tue Jan 22 18:32:20 2013
Now hear this!

The only reason eBay/PreyPal will not recognise any proof of deliver that is not “online” is because if it is online the matter can then be processed by even by a clumsy eBay computer algorithm; if it is not online, then human resources are required; anyone that thinks that the desperate eBay or PreyPal are going to detract from their bottom lines by providing sufficient human resources to do that extra work, truly is in a most delusional state … probably somewhat similar to that which the Ho spends most of his time …

eBay / PayPal / Donahoe: Dead Men Walking
Successful eBay Seller Shares Anti-Buyer-Fraud Tactics   Successful eBay Seller Shares Anti-Buyer-Fraud Tactics
This user has validated their user name. by: Rexford
       
Tue Jan 22 18:56:25 2013
I agree with the eBay seller who stated that the insurance affidavit gets results.  Items mysteriously appear once the insurance affidavit is sent. It has happened to us many times.

Ebay/PayPal could do all sellers a favor by not allowing any refund if a buyer refuses to complete an insurance affidavit. In my opinion, this will only be implemented if eBay/PayPal cut some kind of fee from it. It is normally the scammers who want no part of completing the affidavit.  An honest buyer will have no problem completing it and is happy to help.

The way it is set up now, the scamming will continue and it will likely get worse.

In my experience, the first red flag is when a buyer files an INR before even bothering to contact the seller.  When that same buyer will not respond to your email once you email them about the issue, then that is red flag #2.   And when they will not complete the insurance affidavit you likely have a scammer on your hands.  Even someone who does not speak English can state "I don't speak English" in their language if language is the issue.

Also, if VAT is paid, there should be a record of it and the postal systems in other countries should make this available and link it to the customs number on an online site so that sellers have access to it.  And that should count for something because it would be a record that the seller picked up the item.  And if eBay PayPal will not acknowledge that they are just being obtuse.
Successful eBay Seller Shares Anti-Buyer-Fraud Tactics   Successful eBay Seller Shares Anti-Buyer-Fraud Tactics
This user has validated their user name. by: Rexford
       
Tue Jan 22 18:58:03 2013
I meant that "it is a record that the buyer picked up the item" in the last paragraph.  (not the seller)
Successful eBay Seller Shares Anti-Buyer-Fraud Tactics   Successful eBay Seller Shares Anti-Buyer-Fraud Tactics
by: bitbybit This user has validated their user name.
       
Wed Jan 23 02:43:01 2013
Shipsurance thru inkfrog has been great with the very few claims I have had over the years. The affidavit can be translated to most languages. I do insure most items and send out with each sale a letter that their item is covered with insurance. I believe this has cut down on fraud and most buyers have cooperated if there is a claim.

Ebay should NOT pay on any claims until insurance reports have gone through the whole claims process. Once a buyer is paid there is no incentive to help the seller collect on damages.  
Successful eBay Seller Shares Anti-Buyer-Fraud Tactics   Successful eBay Seller Shares Anti-Buyer-Fraud Tactics
by: pace306 This user has validated their user name.
       
Wed Jan 23 07:50:28 2013
... we get customs ''requests'' all the time - since we ship alot of smaller items that are $100+ out of the country. I guess the Obama clones who love high taxes are creating havok everywhere!

BTW - Flat Rate Priority Envelopes are treated as FCM in alot of countries. I asked why - since it effects me in a huge way  (most of my items can fit in the PADDED Flat Rate ones) and I got a gibberish answer from the PO. Regular Priority mail packages are considered parcels, FR Envelopes are considered standard mail.

I had ALOT of ''missing iems'' when I used to it ship things, so I had to stop using them except to Canada and Australia.

FR Express envelopes however are treated as parcels and are a great way to save money and get the magic ''delivered'' online notification.

Oh yeh .... manual reciepts etc ... Paypal has honored scanned postal documents for me - as has shipsurance.
Successful eBay Seller Shares Anti-Buyer-Fraud Tactics   Successful eBay Seller Shares Anti-Buyer-Fraud Tactics
This user has validated their user name. by: Rexford
       
Wed Jan 23 09:06:11 2013
Another thought......these insurance companies need to update their policies.  PayPal will close out a claim on an international transaction on day 45.  The insurance companies make you wait until day 46 to file a claim.  A buyer who has won a claim for non-receipt will have no incentive to help you with the claims process once PayPal closes the case in their favor.  Would love to see the  insurance companies reach out to PayPal so that they can get on the same page.

eBay and PayPal could avoid a lot of fraud of they would not allow a claim if the buyer refuses to participate with the insurance process.
Successful eBay Seller Shares Anti-Buyer-Fraud Tactics   Successful eBay Seller Shares Anti-Buyer-Fraud Tactics
by: Carol This user has validated their user name.
       
Wed Jan 23 10:30:45 2013
I have said this so many times that I feel like a broken record, but international selling is a crapshoot for the seller.

You can avoid some of the pitfalls, but some losses are going to happen.

A wise seller spends the time necessary to learn the details of seller protection and insurance and doesn't take unnecessary chances.  This is an extremely UN-glamorous part of business but very important if you value your bottom line.
Successful eBay Seller Shares Anti-Buyer-Fraud Tactics   Successful eBay Seller Shares Anti-Buyer-Fraud Tactics
by: Moonwishes This user has validated their user name.
       Web Site
Wed Jan 23 11:41:25 2013
I rarely get a request for a refund or a lost item claim. Of the ones I had of 'lost' the items showed up months later, both claims I suspect had more to do with a wrong address or duty than actual lost in the mail. I too make the buyer sign the insurance claim, assuming I had insurance on it and for foreign orders UPIC requires a 45 day waiting period for foreign deliveries which I am happy about, since too many think that all items should be recieved with the speed of a fax machine or magic. Waiting the 45 days, gives the item a chance to get where it is going. Even for here in the states I think it is a 15 day waiting period.
Successful eBay Seller Shares Anti-Buyer-Fraud Tactics   Successful eBay Seller Shares Anti-Buyer-Fraud Tactics
by: baghera This user has validated their user name.
       
Wed Jan 23 12:25:52 2013
I used to get the occasional customs fraud request until I put a blurb in my listings stating that I will not under-value merchandise or mark it as a gift and that doing so is a violation of US & International law. I haven't received any more requests, since then.  
Successful eBay Seller Shares Anti-Buyer-Fraud Tactics   Successful eBay Seller Shares Anti-Buyer-Fraud Tactics
This user has validated their user name. by: TheUglySweaterShop
       
Wed Jan 23 13:22:27 2013
Did you just lift this information from a "secret" Facebook seller's group where it was recently posted by the seller in question?

I'll keep in mind that group it isn't that "secret" after all.
Successful eBay Seller Shares Anti-Buyer-Fraud Tactics   Successful eBay Seller Shares Anti-Buyer-Fraud Tactics
by: BackInBlack This user has validated their user name.
       
Wed Jan 23 16:55:25 2013
I think these are great tips, and make me want to look more into third-party insurance for sales, esp. International sales, which I've shied away from on many of my items, even knowing I'm losing about half my potential market.

I've mentioned here before that I'm primarily a buyer and only recently got back into casual selling (wasn't intended to be merely casual, but so far that's how it's gone). After 15 years of very few problems ever in thousands of purchases, I've had six or seven in just the last four to six weeks, with a couple of very difficult and uncooperative, even hostile sellers (maybe jaded by difficult buyers?) The time required to deal with these has almost sent me fleeing to Amazon instead, but I even had one recent problem there (albeit quickly & heroically resolved by Amazon CS).

@Rexford- I agree about time-frames. I'm not sure it'd be a good thing for sellers to extend the 45-day 'case window,' but I will say that several times over the years, I've had a seller 'drag' me with excuses beyond that limit with an issue, and then I lost out entirely because I was past being able to file a case.  This recently cost me $20 for which there was absolutely no recourse, even with my credit card company (which I use for all purchases). This scam seller makes a market in 'future-dated' coupons for a major restaurant chain, and by the time it embarrassingly came to light with the manager at my table refusing the coupon, it was too late for me to do anything but report it to eBay and the restaurant chain. Interestingly (Phil, Ming, et al will love this), even after all that, the seller has the item listed to this very day, and has sold dozens of them over several years.
Successful eBay Seller Shares Anti-Buyer-Fraud Tactics   Successful eBay Seller Shares Anti-Buyer-Fraud Tactics
This user has validated their user name. by: juliawww
       
Thu Jan 24 13:19:00 2013
Hi TheUglySweaterShop, I asked the person who posted this information if it was OK to use, and asked her questions to obtain futher information. In my opinion, her experience and this information is helpful to a lot of sellers, and I don't think it's compromising the secrecy of the group to post this topic (with her added info) with her permission. Thanks for your feedback and the chance to clarify that! - Julia
Successful eBay Seller Shares Anti-Buyer-Fraud Tactics   Successful eBay Seller Shares Anti-Buyer-Fraud Tactics
by: Abernathy This user has validated their user name.
       
Fri Jan 25 01:39:55 2013
I've had the same experience with UPic's affidavit as far as weeding out the genuine from the fraudulent shipping damage claims. In the case of damage claims, I tell buyers I will process their refund as soon as I have the info needed from them to process the claim, tell them what to expect, and work with them to make that happen as quickly as possible. I try to stay friendly and helpful even if the buyer is difficult or I suspect the claim is bogus. Most buyers cooperate immediately when they realize that their refund doesn't wait for the outcome of the claim. A high percentage of buyers with suspicious claims will try anything to get out of that affidavit--threatening, excuses, delays, offering to accept a partial refund if I'll process it ASAP without waiting for their paperwork, etc. Ironically, my most memorable shipping insurance issue involved a claim that was *probably* genuine. A buyer sent photos of a stainless steel appliance that was so badly crushed that it no longer fit within the original package dimensions. After discussing it with the buyer I opened the claim, sent him the affidavit form, and asked him to keep the item and packaging available for inspection or pickup if the insurer required it. At this point, the buyer flatly refused to cooperate with an insurance claim, saying first that my packaging was inadequate (not true) so it was my responsibility, not the insurer's. Then he said that the damage was strictly cosmetic, and that since the appliance no longer worked, I must have shipped a non-working appliance--and therefore it was my responsibility to pay the cost of repair and restoration. He demanded that I pay estimator and restoration fees well beyond the value of the item, in addition to refunding his payment. When I wouldn't agree, The buyer filed an NOD and said he would be shipping the item back for a refund, which would have destroyed any basis for recouping the item's value thru the shipping insurance. I made sure all conversation took place where it could be reviewed by eBay, and called eBay to clarify policy (yeah, I know :) before deciding how to handle it. By cooperating with the insurance claim, the buyer could have gotten a full refund without the time, cost and hassle of shipping it back. The item never did arrive, I never refunded the payment, and eBay closed the case in my favor. I still don't know whether the buyer was avoiding the affidavit, he was just angry beyond reason, or he was committed to restoring the item and wanted me to pay as much of  the cost as possible.
Successful eBay Seller Shares Anti-Buyer-Fraud Tactics   Successful eBay Seller Shares Anti-Buyer-Fraud Tactics
by: Cassie This user has validated their user name.
       
Sat Jan 26 11:55:57 2013
I do more than utilize my own insurance with a claim form inside. I also have a video camera linked to a separate low cost netbook. I digitally record condition, packaging, (invoice, ads, warranty, insurance form, return shipping label) and show the product label and sealing - why as an international shipper you also have to contend with corrupt customs officials in foreign countries. I can take the video and post via email to show my customers or in disputes via a cloud server. I learned this years ago as corporate shipper for high end commercial business to business goods.  
Successful eBay Seller Shares Anti-Buyer-Fraud Tactics   Successful eBay Seller Shares Anti-Buyer-Fraud Tactics
This user has validated their user name. by: Philip Cohen
       Web Site
Sat Jan 26 16:46:12 2013
@Cassie, As a matter of interest, have you actually had success with your video system with PreyPal? I get the impression that PreyPal is not interested in offering such extended mediation as it involves human resources, the additional cost of which detract from their bottom line; they appear to prefer "the customer (the buyer) is always right (regardless)" as being the simpler and less expensive mechanism ...

eBay / PayPal / Donahoe: Dead Men Walking
Successful eBay Seller Shares Anti-Buyer-Fraud Tactics   Successful eBay Seller Shares Anti-Buyer-Fraud Tactics
This user has validated their user name. by: permacrisis
       
Sun Jan 27 07:22:17 2013
Julia- LOVE the ransom-letter 'ebay extortion' graphic!

(Keep it handy- you might need it again for when ebay, itself, begins extorting people.)
Successful eBay Seller Shares Anti-Buyer-Fraud Tactics   Successful eBay Seller Shares Anti-Buyer-Fraud Tactics
This user has validated their user name. by: juliawww
       
Wed Jan 30 13:13:40 2013
Hey perma, lol...thanks! I can't take credit for the graphic..you can thank someone at EcommerceBytes for it. ;)
Successful eBay Seller Shares Anti-Buyer-Fraud Tactics   Successful eBay Seller Shares Anti-Buyer-Fraud Tactics
by: ChristinaC This user has validated their user name.
       
Thu Jan 22 04:44:55 2015
Thanks for sharing! You may also use the website eBuyersReviewed to protect yourself from bad buyers!


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