Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Sun Oct 7 2018 11:06:53

Amazon Fraud Case Underscores Problem with New eBay Policy

By: Ina Steiner

Sponsored Link

An Amazon buyer has been indicted after Feds accused him of committing fraud using 501 allegedly false Amazon accounts to place approximately 1227 orders. The government alleges he obtained over $200,000 in merchandise, replacements, and refunds by falsely claiming the merchandise had not been delivered or was damaged.  

While an indictment is an allegation and is not evidence of guilt, the very idea that it might be possible for a single buyer to commit $200,000 in false claims is breathtaking to small sellers who sell on Amazon, eBay, Etsy, and elsewhere. 

It's especially problematic given that marketplaces mandate sellers offer generous returns policies.

It also calls into question eBay's new Service Metrics policy that went into effect on October 1, 2018, in which eBay charges 40% higher fees to sellers who have too many SNAD claims ("How often you receive return requests for "items not as described.") Rather than using only cases where the seller has actually lost the claim, eBay uses the rate of *all* Item Not as Described requests (even those where the buyer has lost the case) and compares it with the seller's peers to determine if the rate is too high.

eBay suggests that it all ends up fair because all sellers are equally impacted by bad buyers and fraudsters. But that's small comfort to sellers who have the bad luck of being victimized by more bad buyers or fraudsters than their colleagues. In such cases, first they get defrauded, then they incur penalty fees from eBay.

Will sellers be protected from fraudulent buyers and false "item not as described" claims?
When buyers get flagged as fraudulent and/or abusive and we believe all of the claims were filed in bad faith, we will remove the transactions from seller calculations. For false "item not as described" we will NOT remove potentially mis-filed returns where we don't see a history of likely intentional mis-filing. All sellers experience these randomly, and peer benchmarks reflect that they happen at a certain rate on average. We want sellers to focus on reducing the preventable returns and not worry about disputing every claim.

What's sorely lacking from the equation is the incentive for eBay to curb returns abuse.

While the above allegation against the Amazon buyer is disturbing, it doesn't come close to a case we wrote about in October in which a husband and wife were charged with defrauding Amazon of over $1.2 million through returns fraud.

Comments (55) | Leave Comment | Permalink
Readers Comments

Perminate Link for Amazon Fraud Case Underscores Problem with New eBay Policy   Amazon Fraud Case Underscores Problem with New eBay Policy

by: ebayout This user has validated their user name.

Sun Oct 7 11:40:13 2018

ebay can't/won't hire enough warm bodies to arbitrate all the claims, false or not, that come through it's site. Hence, they employ the Clump Approach.
"You're ALL guilty, REGARDLESS".
Sort of echoes current events.

Perminate Link for Amazon Fraud Case Underscores Problem with New eBay Policy   Amazon Fraud Case Underscores Problem with New eBay Policy

by: Dburn This user has validated their user name.

Sun Oct 7 11:49:33 2018

It's far more profitable in the short term for eBay to encourage return abuse and they have proven it by drawing a large, easy to hit target on it's sellers. The idea that  false returns will be counted as returns  with the BS excuse of it being factored into the peer group comparison shows how far they are willing to go to get the extra fees.

Right now, I'm planning for the extra fees to go into effect by taking appealing, low profit products off eBay and putting them on Reverb while delegating eBay to third tier site status for selling goods that have no history of returns with profit margins that can absorb the extra fees. I anticipate the overall bills from eBay to be 1/3 of what it is now despite the inevitable increase in the rate. If other sellers gravitate towards doing the same the site appeal will diminish. Even the thieves will go ''meh, eBay, can't get nothing for that crap on the street''

eBay doesn't seem to realize they have competition . They also don't seem to realize that reaching farther into sellers pockets is not a viable revenue enhancement that will substitute for their inability to increase organic traffic /sales on eBay's site.

Equally amazing is that Wenig gets paid a significantly higher salary than his peers who run  companies with real revenue and profit growth without stealing from their customers.

Perminate Link for Amazon Fraud Case Underscores Problem with New eBay Policy   Amazon Fraud Case Underscores Problem with New eBay Policy

by: Whatever This user has validated their user name.

Sun Oct 7 11:56:22 2018

WOW - and how many more? sure there are thousands.  Last week a buyer opened a case against me - reason? "I just don't like it"  Ebay refunded her her money - didn't dun me and the buyer kept the item.  Nothing wrong with it - she just didn't like it. How long can they keep that up? I know they have alot of money and I was grateful they didn't take the money from me.  Upon further investigation - banning her from my account I realized that the last 3 feedbacks she had left were for 3 different sellers - all negatives.

Perminate Link for Amazon Fraud Case Underscores Problem with New eBay Policy   Amazon Fraud Case Underscores Problem with New eBay Policy

by: ebayout This user has validated their user name.

Sun Oct 7 12:28:30 2018

This is statistical BS. It's not even statistics to begin with.
ebay is PRESUMING future events based on nothing more than convenience for them.
Real stats are open to moderation. Not ebay's. How adult of them.

Perminate Link for Amazon Fraud Case Underscores Problem with New eBay Policy   Amazon Fraud Case Underscores Problem with New eBay Policy

This user has validated their user name. by: toolguy

Sun Oct 7 13:17:19 2018

A few weeks back I got my 1st item not as described as a buyer.

I filed a SNAD report to eBay and told the seller I would be returning the item.

The seller sent me a message saying they would refund me after they received the item back and gave me their address.

I waited for a return label that never came, eBay ruled in my favor and refunded my money without me returning the item.

I had to ask the seller what their address was again because ebay had erased it from my messages.

I called eBay and asked them why they deleted the message.

They said the seller didn't respond to the SNAD case in the alotted time so they deleted the message and I could keep the item.

I spend $3.75 out of my own pocket to return the seller his item that only cost me $15 to buy

It was the right thing to do. . .

Perminate Link for Amazon Fraud Case Underscores Problem with New eBay Policy   Amazon Fraud Case Underscores Problem with New eBay Policy

This user has validated their user name. by: iheartjacksparrow

Sun Oct 7 15:18:17 2018

"When buyers get flagged as fraudulent and/or abusive and we believe all of the claims were filed in bad faith, we will remove the transactions from seller calculations."

I've got an idea: Why not suspend the abusive buyers and block them from registering with another ID? Could it be that eBay makes a substantial amount of money thanks to the same abusive buyers?

"We want sellers to focus on reducing the preventable returns and not worry about disputing every claim."

Excuse me? Do eBay executives even know what's going on on the site? Do they not know that buyers specifically buy items to "rent" and return? Do they not know that buyers will purchase something, and when it arrives, realize they can't afford it so claim SNAD? Do they not know that buyers purchase multiples of the same item in different sizes, and claim SNAD on the ones they want to return?

eBay is going to continue on its downward spiral until serious action is taken to protect its sellers and substantially curtail the liar buyers.

Perminate Link for Amazon Fraud Case Underscores Problem with New eBay Policy   Amazon Fraud Case Underscores Problem with New eBay Policy

This user has validated their user name. by: Rexford

Sun Oct 7 15:51:36 2018

iheartjacksparrow, I agree.  If a buyer uses a key to come into a home to rob it, you don't give them another key after they are busted for the first robbery.

My guess is that it will cost them too much to actually do something about fraud therefore nothing will be done.

As we know they are desperate for money right now to please Wall Street because I do believe that Wall Street is finally catching on.

Perminate Link for Amazon Fraud Case Underscores Problem with New eBay Policy   Amazon Fraud Case Underscores Problem with New eBay Policy

by: pace306 This user has validated their user name.

Sun Oct 7 17:13:57 2018

eBay THRIVES off fraud - its just another income stream.

eBay CS has said to me and others and on their forums that eBay expects a certain amount to happen, does nothing when it does occur, and expects sellers to just "eat it" as a cost of doing business on their platform.

Amazon is JUST as bad if not worse.

Where eBays fault lies (as apposed to Amazon) is that sellers on eBay "labor under the illusions" that all eBay does is provide a platform and lets sellers be in charge of what happens after, as apposed to Amazon who tells you UPFRONT "our way or the highway". BOTH companies provide the same outcome.

That of course comes from the eBay lies (just like its Paypal/payments issue where it told people its Paypal or nothing (for various reasons) that its "just a venue". And why not, they told that to the French courts in the Vuitton case.

Selective amnesia from the jet setting man at the top of eBay to be sure.

If in the TOS it said right up front about what professionals would call "risk management when selling on eBay" ..... then sellers would at least know before hand and NOT get a surprise (surprises are for children's bday parties not for selling online).

And the other half of course - if they told people the TRUTH .... no one would sell on eBay ... they would just go to Craigs list or other venue - since the level of protection for sellers ...on eBay ... is generally ZERO.

Perminate Link for Amazon Fraud Case Underscores Problem with New eBay Policy   Amazon Fraud Case Underscores Problem with New eBay Policy

by: ebayout This user has validated their user name.

Sun Oct 7 17:25:11 2018

Reminds me back in 7th grade...myself and a couple classmates were sent on some mission. While away, the rest of the class was punished for getting out of hand.
Upon returning, we were told that we were punished as well, because HAD WE BEEN THERE, we would've been punished anyway.
SO...if my "peers" get deserved dings, and I get the same number, albeit none deserved, I get to keep 'em.
Aristotle has met his evil twin.

Perminate Link for Amazon Fraud Case Underscores Problem with New eBay Policy   Amazon Fraud Case Underscores Problem with New eBay Policy

This user has validated their user name. by: CanBrit

Sun Oct 7 18:21:21 2018

Just today (we were away for two days) I find we have a return for a $100 item. No big deal, we accept all returns. What is really troubling, is this jerk is saying they paid $170, not $100. Now, I have the PayPal receipt showing I received $100, so I don't think there's any issue with that.

Here's my problem. If I accept the return before he confirms that he paid $100 and not $170, I could get burned right? I trust PayPal, I just don't trust eBay.

Perminate Link for Amazon Fraud Case Underscores Problem with New eBay Policy   Amazon Fraud Case Underscores Problem with New eBay Policy

by: sasikat9 This user has validated their user name.

Sun Oct 7 18:36:35 2018

Ebay doesn't care about the sellers losing money or being abused. When the bottom line is affect Ebay turns their heads.

If as a seller you can't afford to lose your item and money then you are a fool if you still list on Ebay. We have no sympathy for someone who gets taken for 100's of dollars knowing full well that Ebay doesn't care.

You list, you lose......

Perminate Link for Amazon Fraud Case Underscores Problem with New eBay Policy   Amazon Fraud Case Underscores Problem with New eBay Policy

by: ebayout This user has validated their user name.

Sun Oct 7 19:24:48 2018

Somebody please define "venue", and the associated limitations.

With no basis for justice, there is no justice.

Perminate Link for Amazon Fraud Case Underscores Problem with New eBay Policy   Amazon Fraud Case Underscores Problem with New eBay Policy

by: Grady This user has validated their user name.

Sun Oct 7 19:29:45 2018

Well stated sasikat

It's not like "the venue's" behaviour is hidden or some new phenomenon. The whole world knows that you will get shafted by these thugs so if you're still listing there you really deserve what you get.

Perminate Link for Amazon Fraud Case Underscores Problem with New eBay Policy   Amazon Fraud Case Underscores Problem with New eBay Policy

by: pace306 This user has validated their user name.

Sun Oct 7 19:43:10 2018

@ebayout

its funny ...

https://www.dictionary.com/browse/venue

a. the place of a crime or cause of action.

Usually it means " place or system where financial transactions can occur" - which is/was the correct definition for eBay to give at the time, it was s simple website where financial transactions occurred.  Its the lies AFTERWARD that concern or should concern sellers.

Perminate Link for Amazon Fraud Case Underscores Problem with New eBay Policy   Amazon Fraud Case Underscores Problem with New eBay Policy

This user has validated their user name. by: The End

Sun Oct 7 21:48:56 2018

No defense against Abusive Buyers on Etsy.
LABEL THEM AS SPAM. Then they can't get through.
CANCEL their transaction immediately, if they got through.
Etsy refuses to create a way to block morons outright.
Etsy IS the problem.

Perminate Link for Amazon Fraud Case Underscores Problem with New eBay Policy   Amazon Fraud Case Underscores Problem with New eBay Policy

by: Snapped This user has validated their user name.

Sun Oct 7 21:59:58 2018

''All sellers experience these randomly, and peer benchmarks reflect that they happen at a certain rate on average.''

Warped logic.  A typically eBay approach to anything they try to 'justify' as Basis for their theft by penalty when their manipulation by 'policy' isn't effective.

For example, does a 'peer' seller who has been coerced into offering 'free' reurns for any reason experience this claimed 'same random rate' of SNAD claims as one who exercises their entreprenural right of establishing a no returns policy?  No.  THAT seller, by not kowtowing to eBay's demands is going to be punished by eBay's due process lacking, guilty as ALLLEGED 'judgement'.  And even on the rare occasions they are not, (how many 'false' SNAD claims constitute an 'action worthy trend' btw?) that SNAD - which is ENCOURAGED and SUGGESTED on almost every page - is still going to be a black mark in the ledger.  

A mark eBay doesn't have the resources to 'fight', therefore the seller 'shouldn't' either?  Bet those hypocrites don't roll over for any seller claims against them - especially the legitimate ones.

They want to focus on the ''preventable''?  How, pray tell, is that even possible now?  On eBay anyway - this somehow doesn't seem an issue on other sites that don't encourage free returns under penalty of sanction for lack of compliance.

It's just...disgusting.



Perminate Link for Amazon Fraud Case Underscores Problem with New eBay Policy   Amazon Fraud Case Underscores Problem with New eBay Policy

by: Tiffee Jasso This user has validated their user name.

Mon Oct 8 02:00:29 2018

@CanBrit  I would contact the buyer and ask him why he is asking $170.00 when he paid $100.00. I have had buyers contact me complaining only to find out it was someone else they order the item they were unhappy with.  

Perminate Link for Amazon Fraud Case Underscores Problem with New eBay Policy   Amazon Fraud Case Underscores Problem with New eBay Policy

This user has validated their user name. by: Marie

Mon Oct 8 02:34:20 2018

@CanBrit

I get it that you don't like or trust Ebay.  Can you come up with a single example of ANY refund that Ebay or PP has forced that was above and beyond what the buyer actually paid?  I don't think so.  But I'm willing to look at whatever information you may have that shows otherwise.

It is possible that your buyer has your transaction confused with another one they had with a different seller.

*******************************************************
*******

This
Service Metrics that EBay has dreamed up is the single most ridiculous thing I think Ebay has EVER come up with.  There are so many things that concern me with this program.  I think it will only be a matter of time before we hear about this policy being tested in the court system somewhere as it is so self serving and hard to defend that it isn't a financial conflict of interest on Ebay's part.  They are the sole judge, jury and executioner on this program with NO accountability to its members due to the secret metrics.

I look forward to reading about those that challenge Ebay on this, but unfortunately I think too many good hard working sellers will be damaged in the process of what may come out of the challenges.

Perminate Link for Amazon Fraud Case Underscores Problem with New eBay Policy   Amazon Fraud Case Underscores Problem with New eBay Policy

by: rover This user has validated their user name.

Mon Oct 8 05:16:43 2018

The crazy consumer laws we have in Europe encourage buyer returns fraud because buyers can return an item for any or no reason.  The seller is supposed to return their original shipping as well - despite the fact that it was already spent at the post office. Need a ball gown for a big dance? Need a camera for a holiday? Just buy it and notify the seller within 14 days that you want to return it. The seller will pay. Thats ok!

Perminate Link for Amazon Fraud Case Underscores Problem with New eBay Policy   Amazon Fraud Case Underscores Problem with New eBay Policy

by: xcelr This user has validated their user name.

Mon Oct 8 05:32:01 2018

I haven't had a snad claim, or return request in 8 or 10 years. That's when ebay  stopped showing my store items in search returns and I closed my store, haven't listed even 1 item on ebay since. The other "venues" do work for me, I also weeded out Etsy when they started down the ebay path.

Click to view more comments
1 2 3  [Next Page]


Login is required to post comments.
To sign in to leave a comment using your AB Verify User Name, fill in the form below. If you have not yet signed up for AB Verify, or if you'd like more information, go to the Registration Page
.

Login for AB Verify
Be sure and use your email address and password to log in.

 
Email:
Password:
 
 Forgot Your Password?
 Even though you are signed in with the AuctionBytes Blog, you will have to sign in to the EcommerceBytes blog. But you can sign in with your existing AB Verify info.