EcommerceBytes-NewsFlash, Number 3159 - September 24, 2013     1 of 4

eBay Buyers Exploit Loophole in Returns Process

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eBay is increasingly encroaching on sellers' ability to offer their own returns policies despite being a "venue only." The company is changing its User Agreement to give it more flexibility in dictating seller terms, and it appears it already has a loophole buyers are exploiting.

Changes to the User Agreement
Some sellers have reported that eBay has been opting them in to its Global Shipping Program without their permission, and it looks like eBay may be poised to do the same for its Returns process.

In a notice sent to sellers about its new User Agreement, eBay wrote, "We added a provision describing the eBay returns process, which simplifies returns for our buyers and sellers. We may automatically apply the eBay returns process to listings where returns are accepted. Sellers may remove the eBay returns process from their listings by adjusting their account settings within My eBay. Initially this change will only apply when a new seller account is opened."

Further, eBay states on its FAQs page:

"We've simplified the policy language for resolution of item not as described cases to clarify that we carefully weigh all the information provided in cases where a buyer claims that an item that is delivered is not as described in the listing. If we can't determine from the information we have that the item matches or doesn't match the listing description, we will ask the buyer to return the item to the seller and will ask the seller to refund the buyer.

"In addition, we have updated the policy to reflect that if you choose not to engage with the eBay Buyer Protection process as a seller to resolve an issue for an item not as described case, we may seek to carry out a reimbursement from you without asking the buyer to return the item to you. This will mainly be for lower value items and for sellers who have chosen not to engage with the eBay Buyer Protection process on multiple occasions."

eBay does not provide details about what "not to engage with" the process really means.

The returns provision was just one of several controversial changes to the User Agreement but one that was probably the most overlooked. Sellers reacted to the new User Agreement in thisEcommerceBytes blog post.

Current Practice Provides Loophole
Even aside from the new User Agreement that goes into affect next month for sellers, it appears eBay gives itself lots of leeway for forcing returns when it comes to Items Not As Described (SNAD) cases.

A seller reported in May that she asked eBay customer service about Item Not as Described claims in a Letter to the Editor entitled eBay Overrides Seller's Return Policy with Open-Case Policy:

"When a customer opens a case for item not as described and wants to keep the item and get a full refund and we tell them to return it for a full refund.....after three days if the buyer escalate the case because they do not want to return the item what will eBay do?

"I was told that eBay may or may not require the buyer to return the item but that even though we offered a full refund once the item was returned, it will still count against us as a case. If we do not give the buyer a full refund and let them keep the item, it will count against us."

The eBay Buyer Protection policy states, "For transactions not covered by eBay Managed Returns, the buyer may open a case and eBay may refund the buyer and receive reimbursement from the seller if at any point after the sale is completed, the seller agrees in writing through eBay Messages to provide a refund upon receiving a return from the buyer;..." That appears to give eBay permission to refund the buyer before the buyer returns the item to the seller.

An eBay seller who was suspended on Monday in what might have been due to the number of open cases filed against them (she says she can't get an answer from eBay as to why her account was suspended), provided EcommerceBytes with documentation that showed eBay refunded a buyer before he'd sent back the item. In that situation, the seller is out the item and the money - eBay and PayPal kept their fees and the buyer got a free item.

Friendly Fraud
Bad buyer behavior is not limited to sites like eBay. One company says friendly fraud is on the rise, including chargeback fraud that occurs when a buyer makes a purchase but later claims the transaction was not authorized, or claims the product or service was never delivered even though it was.

So even off-eBay, merchants must worry about chargebacks and returns thanks to payment processors. But at least they can feel confident about setting their own policies.

If it sounds like it's confusing to determine how eBay will handle returns especially for SNAD claims, it is.

Should eBay dictate seller terms? What has your experience been when it comes to returns? Comment on the EcommerceBytes Blog.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to

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