|Tue Mar 28 2017 16:11:52|
Amazon Infected with Scam Sellers
By: Ina Steiner
Amazon is experiencing a problem that one more typically associates with marketplaces like eBay: scam sellers, who are racking up high negative feedback ratings. One Amazon seller we reviewed last night showed an astoundingly low 1% positive feedback out of 498 ratings.
A reader reported the problem on the EcommerceBytes Letters blog
last week - they noticed it thanks to their repricing tool: "We use a price-matching algorithm and noticed items way below cost when our system flagged it to look to see if we wanted to price match, and that's how we stumbled upon it."
We were initially puzzled - with Amazon processing payments between buyers and sellers, how could sellers defraud customers?
by a Forbes contributor explains one method: the seller tells the customer they'll receive their item in 3 - 4 weeks, and then they "wait for Amazon's two-week payment cycle to run its course, whereupon they collect their cash." The author says such sellers can scam hundreds or thousands of customers in three to four weeks before Amazon catches them and shuts them down. In the meantime, they open up fresh selling accounts and keep going.
Since the scammers don't intend to fulfill the order, they price items very low. That's just one way the issue is having an impact on reputable sellers - look for more about this problem in the next issue of EB 411.
UPDATE 4/3/17: We wrote more on this issue in today's EcommerceBytes 411, and we wanted to share the following update.
An Amazon spokesperson told EcommerceBytes, "Amazon has zero tolerance for fraud. We withhold payment to Sellers until we are confident that our customers have received the products and services they ordered. In the event that Sellers do not comply with the terms and conditions they've agreed to, we work quickly to take action on behalf of customers."
As of July 2016, new sellers no longer get paid every 2 weeks - instead they get paid 7 days after confirmed delivery or estimated delivery, depending on whether they provide a tracking number.
subscribers can read much more about the impact of the fraud attack on sellers in today's issue, and also check see more information in this evening's blog post