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Sellers: Protect yourselves from online scams

As a primer for newbies and a review for experienced sellers, here’s a list of the most common buyer scams and defenses for each.

“I am forever a shill bidder and an art forger and a felon. I tricked people out of sizeable sums of money in exchange for worthless works of art...there will always be people who judge me or shun me for what I did on eBay.” Fake: Forgery, Lies, and eBay by Kenneth Walton.

The tale of Kenneth Walton’s fall and redemption – from respected attorney to convicted eBay scammer to successful software developer – should be required reading for all online buyers and sellers; not because it’s a great story (it is) but because it’s a cautionary tale for buyers and a wake-up-call for sellers. The story takes place in the early days of eBay, before online buyers and sellers had acquired top-of-the-mind awareness regarding scams.

Online scammers hard at work

Over the past twenty years, the major online marketplaces have worked diligently to impede fraudulent transactions. But, as selling platforms became more sophisticated, so did online scammers. For every new rule instituted by a selling platform, a scammer developed a work-around. Despite well publicized incidents of fraud and what would seem solid safeguards, sellers and buyers still get scammed.

After a time, online market users may develop a “sixth sense” about the validity of an offer (example: buyer inquiries about your return policies may be a red flag). But even experienced users are sometimes defrauded. Prospective sellers are often discouraged from entering the online selling fray, and some consumers refuse to buy online out of fear of being scammed.

Do online marketplaces have a serious scamming problem? No, they don’t. Most transactions complete without a hitch. Like everything else in the antique business, the more you know about a subject, the less likely you are to be scammed.

So, as a primer for newbies and a review for experienced sellers, here’s a list of the most common buyer scams and defenses for each. These scams may be found on any of the major marketplaces, and the defenses are generally the same regardless of the platform. For simplicity’s sake, I will use eBay as the focus of my examples.

Online scam #1

Spurious payment methods: Buyers have used fake PayPal accounts, bad checks, and counterfeit money orders to complete transactions. It’s not until an item has been shipped that a seller learns that payment failed.

Defense number one: Only accept payment methods that are approved by your marketplace. eBay, for example, doesn’t allow payments by check or money order, or transactions to be completed outside of eBay.

Defense number two: check your payment processing account to ensure that money has been received before you ship. Don’t assume that email notifications are correct; they may be fake.

Defense number three: Learn what your marketplace’s and payment processor’s emails and notifications look like; know what URLs and email addresses will be used. 

Online scam #2

Delivery to an alternate address: A buyer may request that an item be shipped to an address other than the one he has registered with eBay. A myriad of excuses may be offered: perhaps he is moving, the item is a gift for a relative, he lives in a secure building and packages cannot be left outside. Then, when you have received payment and shipped the package, the buyer claims not to have received the goods. You’re out-of-luck, because you can’t prove that correct delivery was made. You’re stuck refunding the money and have lost your item.

Defense: Never ship to an alternate address.

Online Scam #3

Item not received: Item is paid for and shipped, but buyer claims the package never arrived (although it did).

Defense: Always track your shipments so you can confirm delivery. For high-dollar items (thresholds will vary by marketplace) get a signature at delivery.

Online Scam #4

Bait and switch: This scam takes several forms. In each of them, a buyer purchased and paid for your item. Upon delivery, the buyer may claim that the item has been damaged in shipment, or the box you sent was empty. They return an empty box or return an item that is like the one you sold but is not your item.

Defense: Insist on photos of damage, or photos of the item including unique identifiers (serial numbers, etc.) before a refund is issued (be sure the photos they send back are not the ones featured in your listing). Of course, if they claim “empty box” there won’t be anything to photograph. The only defense in this instance (and it isn’t a very strong one) is to video record of the entire process of packing and shipping an item; the item’s value would have to justify the extra time and expense.

Online Scam #5

Item not as described: Upon delivery, a buyer may claim that the item you shipped isn’t the one you described, or that there is damage that you didn’t mention. They request a partial refund on the item and may threaten to leave negative feedback if you don’t comply with their demand. Making a partial refund is a tough decision. You could insist that the buyer return the item for a full refund, but the expense of doing so may cost you more than the discount they are demanding.

Defense: Only accept bids or payments from buyers that meet your requirements. As buyers make offers, check their feedback scores. eBay has a feature that allows you to filter your bidders according to your preferences. []

Safe online operating policies

Having strict operating policies within the parameters set by your marketplace provides built-in defenses against fraud and scams. Experienced online sellers suggest the following points be considered in developing your operating policies: 

  1. Know the platform rules; they pre-empt your return and payment policies.
  2. Don’t sell anything online that you can’t afford to lose.
  3. Know each marketplace’s buyer and seller protections. If they offer a money back guarantee, know the limitations.
  4. Keep the checking account that you have connected to PayPal (or other card processor) separate from your operating account.
  5. Don’t sell internationally; tracking is problematic.
  6. Accurately describe and photograph your listed items.

Fraud and scams are (unfortunately) a part of our culture, and not confined to selling online. Brick-and-mortar stores must contend with shoplifting and bad checks; email scammers abound; and con-artists prey on senior citizens and vulnerable populations.

All businesses suffer non-recoverable losses. Merchandise you are cheated out of increases your cost-of-goods sold. It also lowers your profit and drives up prices on the rest of your merchandise. Fraud is disheartening, but don’t let it deter you from selling online; learn the lesson and move on. is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to and affiliated websites. 

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