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eBay Sellers: How To Protect Yourself From Fraud From Buyers

July 29th, 2007 by Skip McGrath

Most fraud on eBay is perpretated by sellers, but there are some buyer scams out there too your should be aware of

Here are some of the most common ways a buyer will try and defraud a seller and how you can protect yourself:

1. Counterfeit Certified Checks and Money Orders

This is a larger problem when receiving payments from overseas. American criminals rarely use this method because it is a federal crime and carries very serious penalties. Whenever I receive a money order, I cash it instead of depositing it into my bank account. That way the responsibility for determining the money order’s authenticity falls with the post office or whoever cashed it. I never ship the buyer’s goods until I have the cash in my hand.

Certified checks are slightly more problematic. If I receive a certified check (also know as a bank check), I take it to my bank and ask a representative to contact the issuing bank to determine if the check is good before I deposit it. This usually takes about twenty-four hours. If the bank says the check is good and it turns out to be counterfeit, then it becomes the bank’s problem—not yours. But if you deposit a bank check that turns out to be fake, the bank will come back and debit your account.

2. Always Ship Expensive Items With a Service That Provides Tracking

Just as some sellers will claim they shipped your unreceived item, there are some buyers who will claim they never received their item and demand a refund or a replacement. That’s why I usually ship expensive items (or fragile items) with a service such as UPS or FedEx that provides positive tracking for all packages.

If the item I am shipping is expensive, I check the box on the shipping form to require a signature upon delivery. Whenever I ship via USPS, I always opt for delivery confirmation, which is the USPS tracking service. But Delivery Confirmation is not positive tracking.

If you insure the package with the US Postal Service, then it is signed for at each step of the way. You don’t get a signature from the customer, but the postal carrier who delivers it signs a form certifying the delivery. This is much better.

3. Carefully Select the Locations to Which You Will Sell

I have been selling internationally for several years now, but there are some countries I simply will not sell to because fraud is so rampant. Chief among those are Russia, Thailand, and Nigeria. When you launch an auction on eBay, there is a form that comes up where you can select the countries or parts of the world where you will do business. Until you gain some experience, I would limit your sales to the United States and Canada. Later you may want to add European nations, Japan and Australia. But I would be very wary of shipping to other Asian countries or South America.  Even if there is no fraud, customs services in these countries can delay your shipments for weeks earning you an un-deserved negative feedback.

4. Use a P.O. Box or Postal Service Company as Your Registered Address oneBay

Once you conduct a transaction with someone, they can find your address within the eBay system.  I once had someone who purchased an item from me show up at my front door. It’s generally not a good idea to have your home address available anywhere on the Internet if you can help it. Also if you use a potal service business, they you have someone to receive packages and sign for them if you are not around.

5. Take Detailed Photographs of and Insure Expensive Items

There are some unscrupulous buyers who receive something and then decide they didn’t really want it. So they may break it or put a scratch on it and then demand a refund.

If the item is insured and the buyer breaks it, you can simply file an insurance claim and the insurance company will take over from there. The company will almost always investigate the claim, especially if the item was expensive. If the buyer put a scratch on the item or otherwise damaged it, you will have a photograph to prove it was fine when you shipped it.

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