eBay’s greatest scam – duping sellers out of fees caused by fake eBay buyers

Let’s say you want to sell an item on eBay… such as that old iPhone 3G that you just replaced by another phone.  You list it on eBay, maybe pick a reserve price (just to be sure it doesn’t sell for pennies on the dollar), and a few days later, viola!  The phone sells.  Great!

But then you realize that the buyer who just bought your item has zero feedback, and created the account less than a month ago.  Red flag.  But let’s be optimistic… surely they created an account because they wanted your old iPhone so badly…  Surely they will pay!

Nope.  They don’t pay.  So you want to re-list your item as quickly as possible to get past all this, yet eBay makes you wait about 4 days before they consider the item ‘unpaid’.  Fine, we wait.

A week rolls around, and finally the item falls into an ‘unpaid’ status, where you can use the ‘unpaid item assistant’ to file a claim on your behalf.  Why do you need to file a claim?  You need to because you now owe eBay the commission on your item that ‘sold’, even though it is now unpaid.

Makes sense?  No, it doesn’t make sense to me either.  This is eBay’s scam #1.  Now, on to scam #2:  This claim won’t be filed until the next month, so you are stuck ‘owing’ eBay money until the next billing cycle.  I can live with that part, but guess what?  They will only refund you the commission and the listing fee… They WILL NOT refund you the reserve auction fee!

That’s right, eBay’s scam #2 is that they do not issue a full refund on unpaid items, because they consider certain options (such as reserve price) a ‘service’ to be used at the time of auction, to help your item get sold in a manner that you want.

The only problem with this logic is that your item never actually sells because the auction was rigged by a fake and scummy buyer who never had the intention of paying in the first place.  However, eBay doesn’t care what the end result is… they just want their fees.  So in the end, the breakdown is something like this:

Insertion fee: $2.40 (this will be refunded, in a month)
Reserve auction fee: $2.40 (fuck you, pay me)
Final Value Fee: $30.00  (this will be refunded, in a month)

The best part?  I get to pay another $2.40 to re-list my item as I wait for this claim to go through.

What a fucking scam.  And just in case you were wondering, I’ve been an eBay seller for over a decade, with many sold items under my belt.  I’m a veteran eBayer, and as such, I have every single seller protection tool enabled that I can possibly enable, including blocking all buyers that:

  • Don’t have a PayPal account
  • Have received 2 Unpaid Item strike(s) within 1 Month(s)
  • Have a primary shipping address in a location I don’t ship to
  • Have 4 Policy Violation report(s) within 1 Month(s)
  • Have a feedback score of -1 or lower
  • Are currently winning or have bought 1 of my items in the last 10 days and have a feedback score of 1 or lower

These are the most aggressive settings that eBay allows, yet they are missing one critical setting:  The ability to block bids from ‘new’ or zero feedback accounts.  You can only block bids from shoppers with a known sketchy history.

I understand why they don’t allow this setting… after all, how could any new eBay shopper be able to shop if all sellers enabled this setting?  Fair enough.  Maybe it wouldn’t be a good idea to have this kind of restriction available to sellers.  But as it stands now, sellers on eBay can be effectively bled dry of money simply by being scammed over and over by these fake eBay shoppers, all while eBay collects the juice.

Fuck that.  If this happens to you, call eBay and scream bloody murder until they give you a FULL REFUND on your original auction, including all ‘service’ fees.  That’s what I did, and I’ll do it every single time this happens to me until eBay addresses this issue properly.

How should they address it?  Howabout automatic refunds on unpaid items for ALL FEES, and a discount on re-listing your auction (as a nice gesture for your lost time and hassle)?

That would be a great start.

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7 thoughts on “eBay’s greatest scam – duping sellers out of fees caused by fake eBay buyers

  1. You are so right. eBay used to be a great company…it’s gotten worse and worse. I buy mostly and sell about a third of the time. There are sneaky fees everywhere you look these days. I just paid 100$ this month, unknowingly, to list a jacket which never sold. As a buyer, I was told that my negative feedback was being removed because I complained too often! This is when I was-in several instances-sent something that was grossly misrepresented and to be fair, tried to communicate w the seller. I’ve decided to shop on amazon more frequently and sell on Craigslist and I’m encouraging everyone I know to do the same. Don’t even get me started on PayPal!

  2. I have been selling on Ebay for over 12 years, when I deal with Ebay…I get the feeling I am be cheated but I can not see how. I would like to believe Ebay was honest & fair but their actions prove othewise. Ebay is so large and any concerns are can be easily thwarted by misinformation & time (eg. Customer Service 1-866).

  3. Good post, very informative. Scam #3: if the Seller fails to open an Unpaid Item case AND close it within the specified window, then ebay keeps the fees in that situation too. I’d love to know why the Seller needs to manually close the case since the ebay system (with its link to PayPal) is fully aware of whether payment has been submitted or not.

    1. That’s right. And even then, when you call back to confirm that you’ve been credited, generally they have not and they don’t ever have a reason why. So you have to go over everything again, sometimes spending hours on the phone, only to MAYBE be refunded. They know exactly what’s going on. Any class actions happening? I’m going to look into it.

  4. You’re absolutely correct. They also do not refund your “seller fees” when someone cancels or makes a mistake. So it’s our job to call and go through every item that’s been canceled, item by item. The best part is that once you agree on an amount that should be refunded, they still don’t refund it and you have to keep calling to get them to do their part. They’re a terrible company. If someone started another ebay but was fair about things, that would create good competition and ebay would have to respond. Right now, they’re like the government- a giant monopoly!

  5. A couple of other items that may interest ebayers if you sell something and the buyer receives it damaged they send it back lets say fedex you put a claim in, fedex drags their ass and ebay decides against the seller (because of fedex dragging their ass) you get the money taken out of your credit card for the full amount paypal keeps their fee and ebay doesnt refund any final value fees because they had to get involved so for sake of argument on a $150 dollar item and maybe $20 shipping ebay takes $170 from your credit card gives it to the buyer they keep the final value fees $17.00 and paypal keeps another $5.00 lets not forget the two 30 cent print fees. You are out the benefit of the item you get a damaged item back and fedex tells you your claim is denied so all you get is an ass kicking

  6. What ebay is a scam. They side with buyers no matter what. Buyer use your product claim it wasn’t what hey ordered and the sellers loose. The ebay rep says they care. You to think they are working for you. Why not? That’s what you paid ebay for. Next you loose. We are now turning in ebay buyer to law enforcement. Ebay extorts money from the sellers if you don’t agree with their policies. I will never buy or sell on ebay again.

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