
Thinking of Selling on eBay using Paypal? Think Again - codenerdz
http://codenerdz.com/blog/2012/12/03/think-of-selling-on-ebay-using-paypal-think-again/
======
steve8918
The only logical conclusion that can be made from eBay's and Paypal's policies
is that they no longer want small sellers to use them. They want professional
sellers to sell from their site, people who are used to dealing with
chargebacks, etc, and can foot the bill when it comes to chargebacks/fraud.
They want to facilitate BUYING from regular people, but make SELLING by
regular people very difficult.

There is no other explanation for getting rid of buyer reputation and
providing no protection to sellers. They only want people who don't care about
buyer reputation, and have deep enough pockets and the expectation that
chargebacks and fraud will occur. If they deal with these larger customers,
this increases their selling volume (and fees) and decreases their support
costs.

~~~
NickM
_There is no other explanation for getting rid of buyer reputation and
providing no protection to sellers._

I disagree. Back in the old days when I used to use eBay before they removed
buyer feedback, it was considered unwise to ever leave a seller negative
feedback because they might turn around and leave _you_ negative feedback in
retaliation. By removing buyer feedback, it allows buyers to leave unbiased
seller feedback without fear of retribution.

One could argue that seller feedback is much more important than buyer
feedback because the buyer has to pay first and then trust that the seller
will ship them the item as described in a timely fashion. Ideally, the worst
thing a buyer should be able to do is not pay, in which case the seller just
has to start over and re-list the item in a new auction. It seems like the
problem here isn't a lack of buyer feedback so much as a lack of due process
for chargebacks, which ends up enabling fraud.

~~~
repiret
I always thought the right solution to this problem was to wait for both
parties to submit feedback before revealing the feedback.

~~~
sp332
A bad seller (or buyer) could avoid negative feedback just by never leaving
feedback, meaning the buyer (or seller) would never be able to publish theirs.

~~~
gacba
oDesk gets around this by having a time limit on when feedback can be left. If
one party fails to enter feedback, then it posts the other's feedback anyway.

Parties can lobby to have the other person change the feedback, but only if
they lobbied party wants to. Seems like a workable system to me and allows
each to be honest without consequences like eBay's original system.

~~~
STRML
That's genius. eBay could really learn from that. Removing buyer feedback
entirely is a really big hammer.

------
brk
I stopped selling things like this on eBay a long time ago because I do not
sell things frequently enough to keep up with the scams du jour.

My local craigslist is where my for-sale items now go. Sure, I may get a
little less than top-dollar for an item, or it might take a little longer to
sell, but I'm never left with some after-the-fact dispute where I have no
control (note: I'll only accept cash).

eBay was fun while it lasted, but then it became a giant flea market with
basically semi-pro retailers looking to sell things, and a whole bunch of
random scammers. Intermixed in all that was the occasional legitimate
"amateur" seller.

For the very few times I've purchased something on Ebay in the last few years,
it's always been from "pro" sellers with storefront type setups. The hassles
of dealing with amateurs selling poorly described items, taking too long to
ship, etc. was also not worth the "deal" I was getting.

A true "amateur to amateur" auction type sales website is an area begging for
competition...

~~~
kerryfalk
Shameless plug; we've built one for automotive enthusiasts:
<https://www.styckyd.com>

Our target is to serve the C2C market and make shipping less painless as well
as eliminate some of the risk on the buyer's side. With the current climate
for buying goods online companies serving the space are at risk for opening
themselves up to scams like this one by buyers. The reality for anyone
accepting credit cards is that you're at the mercy of the buyer.

~~~
sukuriant
How do you pronounce that?

~~~
adrianm
My mind read it as "stickied".

~~~
kerryfalk
Correct.

We built it to integrate with vBulletin forums: <https://partners.styckyd.com>

Our brand name is taken from "stickying" a post on a forum.

~~~
unreal37
You need to get a proper domain name if you are serious about this as a
business. Go get $10,000 and buy stickypost.com if you still like the name.
Look at the comments in this thread discussing what it means.

~~~
kerryfalk
Maybe. The domain name isn't perfect, I'll admit, but it's far from the key
thing standing in the way of the success of the product.

------
codenerdz
OP here. Interestingly enough, my conversations with Paypal became more and
more surreal and I felt more and more powerless with every one in the end. I
had a trail of information and there was evidence of multiple fraud, but I
never felt as powerless as I did after my phone calls with Paypal.

I am in contact with the police captain in the small town where the item was
shipped, but I have very little faith in their ability to recover it.

I will file a local police report as well and try to appeal with paypal.

Meanwhile i want everyone to be aware that the so-called Seller Protection is
totally worthless, since thats how Paypal chooses to pursue a legit fraud
case.

~~~
DannyBee
If you really want the money back, sue the guy. File a miscellaneous action in
Ohio and then use subpoenas to acquire his real address/billing info.

Contact the state AG and local federal AG's as well, just for kicks.

Note that if you go to file a small claims action, you will actually have to
be present in Ohio. They require in-personam jurisdiction.

(You do have the option of filing in local federal district court against the
person, but this is _very_ expensive)

~~~
tb303
You can't sue a fake identity

~~~
incomethax
Presumably the OP has an address where he sent his iPhone. Not sure as IANAL,
but he theoretically could sue a Doe at a given address and subpoena for an
identity.

~~~
URSpider94
The scammer had it sent General Delivery. For those not familiar with the term
(it's not used commonly these days), it's possible to have something shipped
General Delivery to any post office, then walk in and pick it up. See
<https://www.usps.com/manage/forward-mail.htm> for more info. This seems like
one of those arcane system hacks that's ripe for abuse.

He/she presumably had to show some ID and sign something to get the package,
but I'm betting that the ID was fake.

~~~
DannyBee
You think general delivery is also his credit card billing address?

Do you think he walks in with different fake ids every time he does this?

Do you think he also uses different credit cards with paypal?

Or do you picture him as a nomad, like the old guy from Kung Fu: The Legend
Continues, traveling the country collecting fake ids, credit cards, and
iphones?

If he is super-master-ninja and all else failed, do you think it would be more
or less expensive than court to honey pot him, ship him a box of rocks (or
something that takes continual pictures and uploads it instantly) in a very
bright pink package, fly super-economy to the place he is supposed to pick it
up, and then sit in the post office a few days waiting to see your package
picked up, and take pictures of the guy and his car plates?

Unless of course, he only uses public transportation to cover his tracks (or
steals random cars every time he needs to travel to the post office!), and
wears facial disguises, sunglasses, and a hat to make sure no camera gets a
good look at him. Never the same motel room twice, always paying cash, blah
blah blah.

Reality: It's actually very hard to hide when your fraud requires picking up
physical items at a known location.

It's easier to hide _remotely_ , but not so much otherwise. Even remotely, i'd
put 20 bucks down that given _only_ the info the seller has about the guy,
4chan or reddit could find in 2 days or less.

~~~
URSpider94
Dude, funny reply, but I never said that he was un-findable. The parent
suggested sending a subpoena to the shipping address, which isn't likely to
work in this case. Also keep in mind that the OP doesn't have the guy's credit
card number, PayPal does -- and I bet they are not handing it over.

~~~
DannyBee
Sorry, I was in a snarky mood :) It seems every 2 months there is another
popular blog post about how impossible it is to be a seller and how there is
just no way to deal with the fraud. They act like once it involves more than
email or phone, it's all impossible.

But, yes, sending to shipping address is unlikely to work.

Paypal will turn over the info if you subpoena them (you will have to open a
miscellaneous matter in california and subpoena them there, but this is not a
big deal).

If you are law enforcement, they will turn it over much faster, but unlike
Google/et al, they generally do _not_ object.

In fact, here's a great example of this:
[http://docs.justia.com/cases/federal/district-
courts/califor...](http://docs.justia.com/cases/federal/district-
courts/california/candce/5:2011mc80019/236584/16/0.pdf)

"Google has not produced documents, paypal has" :)

They are in a pretty different position, so i can't blame them. Your bank
would turn over records in response to a simple subpoena as well.

Unlike your bank, Paypal will give notice and time to object to the guy, but
if he objects, he will _have_ to do so in court (and then you'd know who it is
or otherwise be able to sue them directly as a doe, and so it won't matter),
or paypal will turn over the records.

~~~
codenerdz
Thanks for your comments Danny.

You make this process seem so simple that im eager to learn it.

Can you outline steps necessary to subpoena paypal without having access to an
expensive legal letterhead(that comes with an hourly legal bill attached) and
to actually follow through this subpoena into getting requested documents.

I was able to get a phone number for supposedly a legal department, but I was
told in so many terms to only have a lawyer call them. Im sure if pressed,
paypal would give out their legal teams address.

~~~
DannyBee
Being a lawyer, I can't really give you actual legal advice on how to do this
stuff without you being my client, but i can explain a very very generalized
process.

Note that if you are not a lawyer, you will end up spending some time reading
rulebooks and filling out forms that lawyers know how to fill out. There are
usually legal aid folks/etc in most state courts that can help.

So let me give you an example process (Again, this is not legal advice, just
an example process):

1\. Open a small claims case against the pseudonym of the paypal person (to be
filled in later), or what they claim their name to be if you have it, in the
state you believe them to be in (assuming that state allows subpoenas in small
claims. If not, you may have to open a real case in their district court,
which is more expensive and requires more paperwork). This will require
service of process, which will be initially hard, but there are fallbacks in
case the person is deliberately making themselves unreachable, like publishing
service in newspapers, etc.

2a. Start by getting a subpoena from the small claims/etc court, see if that's
enough to get what you want. They may want a subpoena from _their_ local
court. In that case

2b. Contact the relevant court for paypal (northern district of california, I
believe), and get them to issue an out-of-district subpoena. For the central
district, you can see the exact process here:
[http://www.cacd.uscourts.gov/court-procedures/filing-
procedu...](http://www.cacd.uscourts.gov/court-procedures/filing-
procedures/how-obtain-and-issue-out-district-subpoena)

It should be roughly the same process for northern district (the form numbers
are the same, though the form content will say northern district instead).

Note that the envelope should be addressed to _you_.

They will assign a miscellaneous action number, and mail _you_ an endorsed
subpoena.

3\. Send a copy of the endorsed subpoena (keep the original since you are
likely to end up playing mail tag a few times) to the address paypal provides.
Again, i don't have this address handy, but as a registered corporation, you
should be able to lookup where they receive service of process. They are
_required_ to have a registered agent that accepts service of process.

If they fail to respond, file a motion to enforce the subpoena (this is
covered in the URL linked above in the case of northern district, if it's
another local court subpoena, they will have a similar way).

They do have a fraud investigation team which you could contact with the
subpoena first, and see if they will respond. They may work only with law
enforcement.

Again none of this is legal advice, there may be intermediate or more steps,
i'm not responsible if the steps are not right or in the right order, or if
following these steps causes you to lose all your legal rights, etc.

------
Spooky23
That's a variant of one of the oldest scams in the book on EBay. Removing
seller feedback actually fixed the issue, at least for buyers.

Back in the day, the formula for an EBay sell-side scammer was to:

1 - Setup a phony account, or network of accounts.

2 - start selling small value things to each other. (Postcards, keychains,
digital pictures, etc) Leave positive feedback, including nonsensical feedback
(ie. My laptop works great, A++++ for a $0.99 recipie).

3 - Wait a few months for the active links to the auctions to be de-activated
by EBay

4 - Start selling a dozen high-value items like laptops. Ship nothing or empty
boxes.

5 - Withdraw funds asap.

Now the same scheme works, but only in reverse for high-value items that have
immediate cash value.

Solution: Never use EBay for anything.

~~~
georgiecasey
Regarding #3, it's shocking that Ebay feel the need to remove all auction
information after a few months. Is hard drive space that expensive?! The Ebay
site is a remnant of the 90s, it's crazy they're still a viable company.

~~~
VMG
They've overhauled it recently, but due to the amateurish look and text of the
offers they probably can't shake that 90s feeling

------
lsllc
Since you shipped via USPS, the buyer has committed mail fraud. Call the US
Postal Inspection Service, they are federal agents with no jurisdiction issues
as the local police will have.

[http://en.wikipedia.org/wiki/United_States_Postal_Inspection...](http://en.wikipedia.org/wiki/United_States_Postal_Inspection_Service)

Edit: USPIS Wikipedia link

~~~
Vivtek
This is an excellent idea. The USPS really doesn't look kindly on mail fraud.

------
eli
A few years ago I sold an Android phone on eBay. A scammer bought it, claimed
it was broken, and filed a claim with PayPal. The guy sent me back a
_different phone_ of the same model that was indeed quite broken. I appealed
to PayPal and lost. I got screwed in this case, but frankly I'm not sure what
PayPal/eBay is supposed to do about this sort of scam. Dude even swapped the
sticker with the serial number from inside the case.

~~~
agumonkey
It's hard, as a paranoid person I try to document things as much as I can,
filmed tests, clean pictures, filmed packaging process. It's not perfect but
for what it's worth, I had an issue on priceminister (european website)
involving an old motherboard being flagged as failing by the buyer, they were
thorough and rejected his claims after all. Nothing major it was 20$, but it's
good to see that some websites go the other way too.

~~~
kamjam
I'm the same. I sold a few things on eBay a few months ago, nothing of great
value, some old Nokia 8850's I had lying around and 2 Raspberry Pi's I had
purchased but not used. I photographed everything, against a verifiable
backdrop (in this the BBC website on my monitor) and filmed the product in use
and put it up on Photobucket so that the upload was also time stamped. No
problems whatsoever with the sales, but you know, just in case!

------
mrchess
The Paypal dispute system is a joke. I had a simliar experience with a $300
laptop. The condition it came in was NOT as described. I tried to get the
seller to refund, but he just ignored my messages. Unable to contact the
seller, I opened a dispute case and I took photos, documented the entire
thing, and even did the dispute message system (and the seller didn't respond
once to my complaints within the dispute system).

After 3? weeks of no response, I clicked escalate button to firm up the
dispute and push it to Paypal so they could decide. I thought I had a clear
cut case -- photos, documentation, 21 days of seller not even trying to defend
himself.

Seller, upon getting the final warning, finally replied with a message along
the lines of "I offered a refund but buyer never contacted me" with no
proof... and Paypal voted in his favor.

Fuck Paypal.

~~~
danielweber
Does Paypal have a messaging system like eBay? Whenever I've had an eBay
dispute (rare), I always communicate using their messaging system so they can
see exactly what we are saying to each other.

~~~
mrchess
Yeah. When I referred "Dispute Center" above, all the messages took place
inside Paypal's internal dipsute center messaging system.

------
mibbitier
> " If youre thinking of selling an expensive item on eBay, think again. "

I would say, this type of fraud is exclusively targeted at cellphones, ipods,
netbooks etc. If you're selling something like an antique grandfather clock,
you should be fine. Of course anything that requires collection, or couriering
is going to be more traceable and secure.

I have sold hundreds or maybe thousands of items on eBay. The only one I ever
had a problem with was trying to sell an old iPod. As soon as it was listed
the scamming started by fraudsters.

~~~
AjithAntony
>If you're selling something like an antique grandfather clock, you should be
fine.

Paypal orders buyer to destroy antique violin:

<http://www.regretsy.com/2012/01/03/from-the-mailbag-27/>

~~~
mibbitier
One bad incident out of millions doesn't set a precedent.

~~~
chiph
One could say the same thing about OP's post. Yet, it isn't unique by a long
shot.

I've also given up on selling via CL because of the scammers. Now I donate to
the local Goodwill or other charity (women's shelters want cellphones, for
example), and take the tax write-off.

~~~
18pfsmt
Could explain how buyers could scam you using Craigslist? Just make it cash
only, no?

~~~
NoPiece
I think it isn't that you end up getting scammed on craigslist, but that 9 out
of ten replies are from scammers. It creates annoying overhead in sorting them
out.

\-- Hi! I am buying this as gift for my Son. Are you firm on the price? Email
me back please,though, you may send me a text on the number below because I am
hearing impaired but I think email is the best for me. \-- Hello, i saw your
listing on craigslist and Am wondering if the item is still for sale. Please
do let me know if I'm still able to purchase as i am willing and ready to make
purchase,get back to me with the condition asap.Thanks

------
ericdykstra
Unfortunately, buyer protection is just as bad!

I recently bought an item on Ebay from an Ebay shop in China and paid extra
for EMS shipping because I needed it fairly quickly (less than 2 weeks). The
seller sent using a non-EMS method that barely got to my door in time, and it
was the wrong item completely! When escalated to Ebay, they would only refund
the item and original shipping fee and only if I sent back the item and paid
for my own shipping to send it back.

I later learned that the seller was out of stock for the item, and figure that
they must have sent the wrong item purposefully (since you're not supposed to
be selling something you don't actually have).

But there's no way to actually contact Ebay support, so there was nothing I
could do. Really going to avoid Ebay from now on because of that poor
experience. No protection on any side.

~~~
Karunamon
This happened to me once as well - there's no eBay dispute resolution process
for shipping scams. If you spring for an extra $20 shipping cost to get it
express, there's nothing, absolutely nothing, stopping the seller from
shipping it media mail and keeping the $19. EB/PP will tell you to get bent as
long as you get the item.

I had someone do this to me a while ago on a laptop. As usual, Paypal and eBay
were utterly useless. I marked the guy all ones on his shipping ratings, but
considering this was a high volume seller, the effect is probably nonexistent.

------
Osmium
This would only work in major cities, but I always thought there was a
business in having a physical escrow service aimed specifically at selling
small, high-value items. You sell an item online, deposit it with the company
(who takes a small cut; you could even mail it to them), who then pass it on
to the buyer when payment is confirmed. The company can confirm it's in
working order, and take some photographs for proof.

Much more pleasant for both buyer and seller. No more news stories of people
getting mugged after an online ad, no more scammy eBay purchasers, the lot.

~~~
Anechoic
This would be a great value-added service option for the Post Office. Deposit
money in an account, have it shipped to a local post office, postal worker
witnesses the acceptance and opening of the package, if everything is kosher,
the buyer signs a release and the money is leased to the seller.

USPS already provide "witness" services for packages that are picked (for
free!), just add an escrow account for 1 to 5%.

~~~
amalag
Still doesn't help you, which postal employee is going to sit for 1/2 hour
while you test your iphone and make sure it connects to your computer etc?
They can only say, "yup it looks like an iphone", not whether or not it works.

~~~
ianferrel
Most things can be tested pretty easily and quickly. This would reduce fraud
considerably, since you'd have to come up with an item that would pass a
cursory inspection, but still fail later. Not at all easy to do.

------
ansible
I'd recommend contacting all the carriers that this phone is compatible with,
and tell them that the phone has been stolen. Give them the IMEI number,
serial number and whatever else.

If you can get law enforcement interested in the case (highly unlikely, but
who knows), they should be able to issue a search warrant, and get the
location of the phone from the carrier. If they can track it down to a
residential address, then they may be able to find the actual person.

It would be helpful if the other sellers also had remotely trackable items.
Regardless, you'll want to be coordinating with them on the item descriptions.

~~~
VMG
The fact that it wasn't _actually_ stolen makes this seem a little risky.

~~~
Karunamon
It would be considered a form of shoplifting wouldn't it? (Honestly curious
here)

~~~
ceol
I'm not a lawyer or a police officer, but doesn't this sound more like fraud?

~~~
Amadou
IANAL either. BUT, I know a guy who had his car stolen through fraud. The
fraudster gave him a bogus cashiers check (and his bank took over a month
after deposit to alert him that the check was bogus).

His car insurance paid out on a theft claim. I'm sure there were more details
to it, but I've never heard of "fraud insurance" as part of an auto insurance
policy.

~~~
wjamesg
FYI (everyone): US Post Office offers a money order verification system to
avoid bogus transactions like these. I've gone so far as to choose a meeting
location around the corner from a post office location and insist on a money
order from that location.

<https://www.usps.com/shop/accepting-money-orders.htm>

------
prof_hobart
Meanwhile, as a purchaser on Paypal, you only get 45 days after the day of the
transaction - which caught us out last week.

We ordered some stuff from (at least theoretically) a reputable company. We
had to pay about 2 months ago, but kept getting emails telling us that the
stock hadn't arrived yet and to just be patient. Then a couple of weeks ago,
they told us that they actualy didn't have the stock and that we'd have to get
a refund. But they were refusing to respond to any of our requests for the
refund, so we contacted Paypal and they told us that we'd missed out on the 45
day window and they couldn't help us.

The company we ordered from eventually (after over a week of chasing) paid up,
but if they hadn't we would have been left high and dry by Paypal.

~~~
cynwoody
I pay for stuff once in a while on PayPal. However, I do not maintain a cash
balance with them, nor do I have a linked bank account. I have only my
American Express card linked to my account.

A few years ago, I ordered some dirt cheap magazine subscriptions on eBay. I
had done the same on eBay once before without a problem, but that was before
the scamsters caught on.

You see, there is an inherent vulnerability with magazine subscriptions: they
are not expected to start serving until approximately eight weeks after you
order them. That's plenty of time for you to give positive feedback and a
crooked seller to make more sales. It's also beyond that 45-day window you
mention.

In the event, a couple of months passed. No magazines. I checked the magazine
subscriber service sites and found that no subscriptions had been entered for
me. I had paid on PayPal, via my American Express card. The action I took was
to dispute the charge on the Amex website. It didn't occur to me take up the
matter with PayPal first, so I didn't run into the problem you had. In any
case, the chargeback was resolved in my favor.

Not long after that, eBay stopped allowing subscription sales on their site.

------
anigbrowl
I don't have much sympathy for this seller.

\- General Delivery is a big red flag, paypal confirmed or no.

\- You should check buyer feedback in advance, not afterwards.

\- don't leave feedback until you have the cash in your own bank account.

\- For expensive items, don't just get signature confirmation, pay the extra
few $ for insurance. I insure anything over $50, for two reasons: you can
claim against the insurance if the buyer alleges the goods are
damaged/missing, and if the buyer is scamming then the insurance means they're
trying to commit fraud against the carrier, who are more likely to prosecute
it aggressively. This is also why I prefer to ship via the post office. Sorry,
but if you shipped an $850 item without insuring the shipment, you're foolish.

~~~
WiseWeasel
The problem with accepting PayPal or CC payments is that you can withdraw the
money from your PayPal account immediately, but they can still issue a charge-
back up to 180 days later and your PayPal account will be deducted that
amount. For remote transactions, money order by mail or Bitcoin are your only
safe, non-reversible options as a seller.

~~~
anigbrowl
Hence the insurance.

~~~
mcherm
I fail to see how is the insurance would have helped in this case. No one
disputes that the package was delivered successfully.

~~~
bloaf
Well if you put the right thing in the box, and the recipient says that he got
the wrong thing, couldn't you therefore argue that the package was tampered
with?

~~~
hackerboos
I don't see why USPS should pay out for what is clearly fraud by the buyer.

------
nicholassmith
Note, I think PayPal are in many cases some sly devils doing some nasty
things, in this case it sounds like they went to bat, had the credit companies
say 'nope' and that's that. Credit card companies will usually go in the
favour of the buyer, because technically the buyer is them. This is an odd,
and bizarre situation, but its why you always should buy fancy items on credit
cards, as the credit companies don't like their money being mucked about with.
The situation is heavily broken though, scammers on every side, the only
option becomes taking legal action and that's very much a minefield.

~~~
lh7777
Seller Protection _should_ protect the seller in the case of obvious fraud
like this regardless of what the credit card company says.

~~~
nicholassmith
Definitely, it seems super obvious to us that fraud has occurred and that's
the long and short, to the credit card companies all they can see is that they
might be severely out of pocket. They will generally fight back against it,
and side with their money. It sucks.

~~~
jeremyjh
I doubt Paypal presented any of the evidence provided by the OP.

------
meritt
Stop using eBay and Paypal.

If you look, you can find stories like this every week since about 1999. This
sort of behavior isn't new yet eBay continues to grow.

~~~
VMG
Because it works for most people most of the time. That is why I continue to
use eBay as a buyer.

~~~
dreoe
Especially for sellers with thousands of sales. They would get no benefit from
scamming you even if they could because bad feedback = lots of lost sales.

------
edj
I've been scammed selling on eBay and will probably never sell there again,
but if I did I'd want a cheat sheet of scam countermeasures. Here's a start
based on the OP's safety checklist (points 3 through 5), comments in this
thread, and my own experience.

 _1) Try not to sell on eBay._ Perhaps Craigslist or another marketplace will
work instead. Unfortunately, people in low population density areas are kind
of screwed without an online marketplace.

 _2) Block all buyers from countries other than your own._ In massive markets
like the US, gaining a few more potential buyers is not worth the increased
risk of fraud or loss during shipment. Perhaps in smaller countries this rule
won't work as well.

 _3) Only sell to people with significant positive feedback._

 _4) Only ship to CONFIRMED Paypal addresses._

 _5) Require Signature Confirmation for items over $250._

 _6) Don't accept PayPal; require money orders for payment._ This might scare
off potential buyers. However, it has the benefit of taking PayPal and credit
card chargeback schemes completely off the table.

 _7) Don't ship General Delivery._

~~~
ars
If you do 6 you'll sell exactly 0 items.

Rule number 1 for buyers: Don't pay with a money order, always use a credit
card.

You're only thinking about protecting yourself - but you also have to actually
attract buyers.

~~~
edj
I agree. A few other commenters suggested this on this thread, but personally
I can't imagine buying anything requiring me to send a money order.

------
URSpider94
Have you called an attorney? If you have one that you're on any kind of
friendly basis, I've generally found that you can get a quick read on your
case (30 minutes' worth of time) without any cost.

IANAL -- first and foremost -- but I would think the best tactic may be to go
after PayPal to get them to discharge your supposed debt to them, given that
you've already swept the money out. Their seller's assurance contract terms
would seem to be vague around what is required for the item to be determined
"not as received" -- also, as you mention, there is a a pattern on behalf of
the seller -- is EBay/Paypal acting dilligently to protect your interest in
return for your seller's fees and auction fees?

~~~
jliptzin
LOL! What attorney would give a crap about a $500 phone? The sad truth is that
in this system of ours, you can screw someone for up to $50-100k and get away
with it because that's the minimum potential damages amount that would pique a
decent attorney's interest.

~~~
URSpider94
Jaded much?

I think that depends a lot on what you mean "a decent attorney". Sure, a
partner at Proskauer isn't going to take your call, but in my experience, the
nice woman with the office down the street might be glad to help you put
together a plan, critique your demand letter, etc. This kind of "decent
attorney" is willing to work with you on the small stuff, in the hopes that
you'll come back to her in the future with bigger business, and refer your
friends and family as well.

A piece of advice -- as you mature and your life becomes more complex, it's
not a bad thing to have a good relationship with an attorney. Here are some
situations that have come up in my life:

Reviewing my ISO and non-compete agreements when I took a start-up job

Getting my security deposit back from a landlord who would not pay up

Reviewing the sale agreement for same start-up 10 years later

Representing me at closing when I bought my first home

Advising me when my bank "misplaced" a $10,000 deposit for over a month (they
cashed the check but didn't credit my account)

Discussing will and estate planning when my first child was born

For all of this, and probably some other things I'm forgetting, I probably
paid him less than $2,000 total -- and half of that was in closing costs on
the house.

More recently, a different attorney (I moved) handled another landlord-tenant
dispute for me with a couple of letters to the landlord's attorney, and never
even sent me a bill.

~~~
gregpilling
I have had similar experiences with attorneys that are single person practices
or a partnership. As the firms get larger, they are less likely to miss any
minutes of billing. In fact I am meeting my lawyer tomorrow for lunch, I am
sure I will pay and I am sure I will not get a bill for his time. I am also
sure that we will spend an hour talking about a small legal issue that I need
advice on. URSpider is correct, it is good to have a friendly lawyer.

------
e40
I tried to sell an expensive camera through eBay and after a month I gave up.
Twice the auction completed and the person that won tried to scam me. I
decided to go the Craigslist route and sold it in a few days to someone that I
met at a local bank and we were both happy.

eBay were not very good, in my case, either. I spent hours on the phone. It
was clear that the person that won the auction bid up to insure they won it.
I'm pretty certain I had legit buyers at lower bids, and I would have been
happy to sell at those bids. The reason I even tried a second time was that I
didn't know about the ability to exclude certain buyers. For the second
auction I tweaked all the knobs that massively restricted the auction to only
the safest buyers. I don't know what happened, but someone with an account
that was a few hours old won the auction. I think it was the same person that
won it the first time. I called eBay again and they voided the auction after a
few days.

It was a really horrible experience and I'll never use eBay to sell anything
ever again.

------
codenerdz
just an FYI, guys. Due to virality of this post and the waves of support on
twitter, I got phone calls from both paypal executive offices and ebay's fraud
teams that not only did resolve my issues, but also hinted at a serious effort
at apprehending this fraudulent individual.

Its very unfortunate that it took this community outcry to get this far. Im
currently working on a "post-mortem" overview of my what happened in the past
few days resolution-wise and ill post it on my blog.

Tech-wise, its pretty amazing how much load a static octopress-based blog
hosted for free on github pages would handle.

Also im pretty glad I chose to host the pictures on picasaweb. Hosting them on
S3 would turn out pretty pricey :)

~~~
djt
care to share with you what the stats are on your hosting arrangement? Im sure
we could get a lot out of a debrief.

~~~
codenerdz
I wrote up a post-mortem here:

<http://news.ycombinator.com/item?id=4883468>

------
Shalle
Paypal is the most fraudulent company that I've done business with. There for
I never sell anything anymore using it, purchase is ok but also risky. A
friend of mine purchased an engine part on ebay but received a brick insted.
Paypal then refused to give the money back because he had signed it out.

In total I've lost 1000's of dollars due to Paypal just handing it back to the
fraudster. It doesn't matter what you say or what evidence you got. Me
personally have never won a paypal dispute as a mercher.

My recommendation to other people, I know its a loss of customers but
LibertyReserve, bitcoins or old fashion bankwire is as safe as it gets.

~~~
kamjam
Apparently all your friend had to do was raise a claim as "item not as
described"...

But yeah, I get your point and try to avoid eBay as much as possible, although
sometimes, very rare now, I have no choice. It eats me up inside when I do
though :-(

------
jakejake
I actually wrote about this 6 years ago when eBay first started leaning their
policy towards protecting buyers at the expense of the sellers. I went from
selling things on eBay regularly to never using them for anything. Especially
an iPhone or any new "hot" item you will be inundated with scam bids. And as
an additional slap in the face you can't even give a buyer negative feedback
anymore so what's even the point of feedback? It reminds me of when the post
office, in response to long lines, resolved the problem by removing all
clocks.

I know this was in reaction to scammers placing fake auctions but eBay
basically threw out the baby with the bathwater with their buyer protection
policies. The scammers just moved to the buyer side where they enjoy lopsided
protection.

This is my post from 2006 - a variation of the scam, but the seller protection
is equally non-existant: [http://verysimple.com/2006/08/13/ebay-laptop-
scammers-part-i...](http://verysimple.com/2006/08/13/ebay-laptop-scammers-
part-ii/)

------
haberman
Don't know if they're any good but the Economist just wrote up EcoATM
(<http://www.ecoatm.com/>) which lets you sell used phones at kiosks. You show
up with your used phone and put it into the machine, which can apparently
verify its make/model and condition, and lets a network of buyers instantly
bid on it. If you choose to sell, the kiosk keeps your phone and you leave
with cash.

~~~
peteretep
In the UK, I'd recommend:

<http://www.moneysavingexpert.com/phones/mobile-recycling>

Which will link you to a whole bunch of reputable bricks and mortar companies
who'll buy your old phone.

------
popsolete
Social Engineering adapted for Paypal scamming. This is yet another proof of
that Paypal Seller Protection is basically worthless.

------
cupcake-unicorn
I sell things very rarely on eBay - recently I got an old Laptop at a garage
sale that I realized I had no use for and went ahead and sold it.

Thankfully everything went well (I think the period for chargebacks has
expired), but I had this awful feeling for a long time after the auction that
something dodgy would happen. Every time I sell, I feel like I'm playing
Russian Roulette.

Like a lot of the other commenters, I'm not sure why more hasn't been done to
help the sellers out. Shouldn't it be clear that it's a scam if a buyer does a
CC chargeback, given that it's easy enough to file with Paypal? Also, wouldn't
giving sellers the option to only accept payment via a bank account help?

------
tlb
It sucks to be among the most gullible 1% of buyers or sellers in a
marketplace, weighted by sales volume.

In first-world markets, overall fraud is around 1%. But since experienced
buyers and sellers learn to avoid it, the least experienced ones absorb most
of the losses.

Whether you're in the most gullible 1% depends on who else you're competing
with. For example, if you're selling a used car, you have to be fairly dumb to
be in the most gullible 1% since lots of regular people do the same.

But the vast majority of iPhones on eBay are sold by sophisticated,
professional, full-time merchants. So unless you have inside knowledge, you
probably are in the most gullible 1% of iPhone sellers on eBay.

------
UnFundedHype
I'm stuck with $680 in chargebacks on paypal.

One gamer used a bank account to deposit funds into his account. 2-3 months
later, he uses that same bank account, then files a chargeback for $680.

Even though he'd used that same bank account months earlier, on the same site
without filing a chargeback somehow this time around he won the chargeback
dispute.

I have no idea how that is common sense possible

------
pbreit
I would have expected David Marcus (PayPal CEO) to chime in by now but
apparently not.

Counterparty risk is definitely a hard problem to solve but this situation
seems easy to solve: if the buyer is complaining "not as described", there
should need to be some sort of attempt to return the item (at seller's expense
or split).

~~~
pdonis
_if the buyer is complaining "not as described", there should need to be some
sort of attempt to return the item_

Exactly. I'm extremely confused as to why this does not appear to have been
brought up by _any_ of the parties in the OP's case.

~~~
finnw
What good would that do? The scammer would just "return" a broken phone, or a
piece of roof tile, claim that was what they received, and the victim has now
paid for shipping twice.

~~~
pbreit
It would help figure out how to resolve the situation at a modest cost (the
cost being an important factor in reducing groundless claims).

------
DanBlake
The absolute, 100% way to solve this is to let sellers decide who can bid/buy
on their items. If I can say "Only users who have been on ebay X months/years
with Y feedback" that is such a major awesomeness. It also puts the control
back in my hands. Maybe I dont get as much money when I sell a item, but I
have way less risk of getting fucked.

Also, it would not stop new ebayers from being able to buy things. eBay could
'eat the risk' or make them guarantee if a seller set up his auction that way.

~~~
kamjam
You can already do this on eBay, the sellers with Y feedback thing

<http://pages.ebay.co.uk/help/sell/buyer-requirements.html>

More specifically: <http://imgur.com/xvAYd>

But it still doesn't get round the way this specific scam works, see post from
Spooky23 above for a great explanation.

~~~
DanBlake
Unfortunately that only lets you block people with bad feedback. You cant say
"you cant buy unless you have 10+ feedback"

Most scammers have no bad feedback, they are just new accounts with 5-10
positive feedback for bogus items.

~~~
kamjam
Yes you can, what do you think "Block users who have a feedback score equal to
or lower than X" means? X can be set to 10 if you want.

That imgurl I linked to was directly from my eBay account.

~~~
DanBlake
The only options on it are -1, -2 and -3

~~~
kamjam
Yes, you're right, I didn't check! This never used to be the case. Now that is
stupid!

I know a lot of people write it in their posting, only users with 10+
feedback.

------
pavel_lishin
While I'm sure that there are probably thousands, if not tens-of- and hundres-
of, perfectly happy and valid sales of high-value electronics on eBay every
day using Paypal, I would rather give something like that away as a Christmas
present than try to sell it on eBay.

------
DigitalJack
This seems like a credit card/bank problem, it's not unique to paypal.

I was thinking about upgrading my phone and ebaying the old one. After reading
this, I'm thinking maybe I'll go the craigslist route, or one of the online
trade-in deals.

Does gazelle have this same issue? I'm not sure if Gazelle the company buys
the product and sells it, or if they just connect me with a buyer like ebay
does.

~~~
mikeevans
You could try Swappa (<http://swappa.com/>) I haven't used them personally,
but a friend did and had positive feedback.

~~~
what_ever
Another vote for Swappa. I bought a phone using the service. As pdubs said, it
still goes through PayPal but the site employees keep an eye on the
transactions and there are reviews and negative feedback.

------
joaorj
Everyone who's been in the internet for a long time know that there are dozens
of sites for people to go tell their "got screwed by paypal" stories. Why
paypal has always been the most used site for online transactions? That i
don't know.. I know i would never use it.

~~~
tjr
Maybe because people who have bad experiences tend to want to publish them
more than people who have good experiences. I sold a damaged iPhone 4 (listed
as such) on eBay+Paypal earlier this year. I got paid, the buyer was happy,
and I did not write a blog post about it.

~~~
codenerdz
Im with you, i sold a number of things without problems, but I did it assuming
that if I follow the rules of Paypals Seller Protection, i would be covered.
This is not the case here. I now know that Seller Protection means nothing to
the fraudster in the know

------
TheCapn
I had an issue with Paypal (outside of eBay) a few years ago and since have
given up on anyone I can't work with my credit card company directly against.

I bought a few car parts from a shop who ended up shipping me only half my
order. I contacted them, they re-sent me the same half a second time (so I had
2 of the same item, but no 2nd part). Contacted them again. Received _the same
item a third time_ and was fed up at this point. I had paid duties on each
item to receive the package to only find I had more worthless parts and
contacted PayPal for a dispute.

Turns out the only proof the seller had to provide was proof that there was _a
package_ shipped. No proof of contents or receipt or anything.

Learned a valuable lesson that day.

------
tb303
Vlad, I had a similar thing happen last year with an iPad. I even went through
a complaint with the Better Business Bureau, and appealed it, but PayPal is
able to hide behind their fine print.

I think the only way to protect ourselves from this is to limit the accounts
to which our PayPal accounts are linked. They automatically-deducted $900 from
my bank account upon the charge reversal, and I was unable to prevent this.

By the time you get Paypal's resolution, the scammer is long gone and local
law enforcement will tell you it's already gone. This whole situation is
monopolistic and I don't understand why the FTC is not doing anything about
it.

(also posted as a comment on your essay)

------
freedom21
Did Paypal steel your money? If you are a California resident you can file a
complaint right now and get a response within 5 days from the Department of
Financial Institutions. In California, Paypal may only hold your funds for up
to 10 days only. Paypal has rules which they must comply with as a licensed
money transmitter and this department enforces those rules. Fill out the
online form today. You could have your money released within days! I did it
and it works.

[https://dfi.secureprtportal.com/dficase/programs/eComplaint/...](https://dfi.secureprtportal.com/dficase/programs/eComplaint/dfi_ecomplaint.aspx)

------
dendory
People abusing Buyer Protection on eBay is nothing new, and has been getting
out of control. But saying you should sell on eBay using something other than
PayPal is just not realistic. People expect to pay with PayPal.

------
discountgenius
This article goes into my "arguments for Bitcoin" pile. More sellers need to
recognize the risks involved in doing transactions through PayPal/any other
credit card processor and protect themselves.

~~~
debacle
And what about if the OP here was the buyer, and received a broken phone?

Then what?

~~~
pbhjpbhj
Shouldn't the item be shipped to dispute resolution (or their agents). On
confirmation of the ID of the item (eg IMEI match or serial number or
whatever) they can asses the item against the description.

If the item matches then return to the complainant (buyer) at the buyer's cost
+ add a service charge. Seller keeps all their money. Buyer's account marked
for fraud watch.

If the item doesn't match then refund the buyer with a chargeback, return item
to seller at the seller's cost + add a service charge. Seller loses their
money. Seller's account marked for fraud watch; selling fees increased.

Items not paid to be returned can be sold on to help cover admin costs for
items that buyer's or sellers do not want returning.

Note that in the OP ebay claim to have assessed that the items didn't match
the description and so buyer protection is invalidated. But they haven't
checked and so are defrauding the seller in respect to this claim.

------
smadam9
I thought my case with a virtual product, and a clear fraudulent act was bad.
After hearing about this, with a physical product, it makes a local
electronics dealer seem much more appealing.

~~~
pavel_lishin
The only way I would sell an expensive piece of electronics would be via local
Craigslist, in person, probably for cash that I'd prefer to witness the buyer
withdraw out of an ATM.

~~~
lh7777
Just like anything else, selling in person to a stranger is not without risk
either. I wonder how the frequency of robberies associated with Craigslist
sales compares against eBay fraud like this one. Personally, I'd rather get
hit with a chargeback than a baseball bat.

~~~
pavel_lishin
Sure, but I wouldn't ask the buyer to come to my house at 2 in the morning,
nor would I agree to meet him in that alley behind the biker bar, either.

------
ChuckMcM
Fascinating, back in the way back time when Ebay was first starting, the only
way I would sell something was payment in advance, but check. Further the
check needed to clear my bank before I would ship the merchandise. This was a
pain but it was the only way to do business if you wanted to avoid fraud.
Paypal made this so much easier, they would carry the risk if it was a
'certified' account.

The whole "not as described" is an impossibly giant and stupid loophole.

Back to asking for checks I guess.

~~~
chockablock
Funds from bad checks can be pulled from your account even after the check has
'cleared'.

cf. 419 scams.

~~~
ChuckMcM
To be explicitly precise, Wells Fargo will not honor a 'stop payment' on a
check which has _settled_. The settlement date is not the same as the 'hold'
date, they may release funds prior to the settlement date if you are a good
customer, with the understanding that if the check is subsequently refused by
the originating bank, or is shown to be invalid, the deposit will be reversed.

The most common scam that trips people up is the 'over amount' check where a
"cashiers check" for more than the amount purchased is sent with the
instructions to deposit the whole thing and just send back another check with
the overage. When the check finally 'bounces' the check sent has already
settled and you're out the amount of the overage (and possibly the item).

In this way writing a check is exactly the same as handing the person cash,
once both banks agree the funds from one is in the other and the accounts are
all updated, assuming it wasn't in error, and the other party doesn't have
special privileges (there is an exemption that governments can pull back
funds) the only way to reverse that transaction is a lawsuit. Well at least
according the commercial banker who handles my business account at Wells
Fargo.

------
jamesjguthrie
I have no faith in PayPal as a payment processor any more. There's these
problems, problems with PayPal placing random account holds etc.

They really don't want business from the little sellers any more.

------
DanBlake
Heres the issue (and a opportunity for a startup?) - eBay remains the main
place to sell second hand goods.

There are other options (craigslist, amazon) but the fact is it takes longer
to sell and still flush with scammers.

What does the solution look like? A costco style paid membership with more
information given back to the user? Ability to 'vouch' for yourself via
facebook/twitter/etc. ?

With all of this, its still chicken and the egg. Hard problem to solve.

~~~
coopdog
Bitcoins (no chargebacks) and a preference for buying through friends of
friends on social networks (almost like a darknet) could be worth looking
into.

~~~
Karunamon
Bitcoins tip the pendulum too far in the other direction; there needs to be a
way for a buyer scammed to reclaim their money in the case of a seller scam.
(And that's not even getting into the instability of the currency.. I'm a fan
of bitcoin and I can't imagine using it in a serious enterprise)

A third party escrow service that examines all goods for compliance with their
description and then sends them on could be a useful tool..

------
larsberg
To jump on a point totally unrelated to the post's complaint but related to
selling smartphones, I've found that if I'm selling electronics (especially
generation-behind iPhones for the family) I can do much better than eBay, even
before you discount both their listing fee and paypal use fees. And there's
comparatively no risk.

For cash: gazelle

For slightly more cash (usually just a few percent), in the form of a gift
card: amazon trade-ins

~~~
DanBlake
Gazelle is worthless and preys on the poor and uneducated. You get less than
50% what you would from selling on ebay.

[http://www.gazelle.com/iphone/iphone-4s/at-t/iphone-4s-64gb-...](http://www.gazelle.com/iphone/iphone-4s/at-t/iphone-4s-64gb-
at-t-or-unlocked/480695-gpid)

vs

[http://www.ebay.com/sch/Cell-Phones-
Smartphones-/9355/i.html...](http://www.ebay.com/sch/Cell-Phones-
Smartphones-/9355/i.html?Storage%2520Capacity=64%2520GB&Color=White&Carrier=AT%2526T&_from=R40&Model=iPhone%25204S&LH_Complete=1&_dmpt=Cell_Phones&_nkw=iPhone%204S&_sop=13)

~~~
MBCook
I sold my iPhone 4 on Gazelle. I know I could have got more through Craigslist
or eBay, but it wasn't worth my time.

With eBay I have to photograph it, write it up, list it, answer ridiculous
questions about shipping it to the 3rd world and take payment in the form of
casino chips mailed to me in a few months. Then I have to deal with the buyer,
ship it, and the whole time I have to be worried about scammers. All the time
I'm competing against companies that are listing 50 iPhones a day because
that's their fulltime job and my account hasn't been used in 4 years. I
wouldn't buy from me in that circumstance.

With Craigslist, things are a bit worse. Not only do you get occasional
scammer emails, but I have to meet the person to physically sell the item.
I've had people stand me up numerous times, be continually able to schedule,
etc. And when I do meet up with someone, they could give me fake money, or
just steal the item, or refuse to buy it meaning I have to go through the
whole thing again.

With Gazelle I got a perfectly fair bid. I hit accept and in a day or two a
box showed up on my door. Put the phone in it, dropped it off at a UPS store,
and in a few days I got my Amazon gift card. No weird fraudsters, and I spent
a total of about 10 minutes of my time. In return I got a price I was quite
happy with, an easy experience, and I was able to use the money to help
support my Amazon habit.

Worst case scenario, Gazelle could have said no and shipped the phone back to
me. I wouldn't be out any money (unlike if I paid for eBay shipping), and I
could have sold it on Craigslist.

~~~
DanBlake
If you were willing to take $250 less for saving 5 minutes time, by all means.
Most of your complaints are made up though (casino chips, third world, etc.. )

I dont use craigslist, so I cant answer to that. I find the eBay process
mostly fine, with the exception of not being able to specify who can bid/buy.
If they did that it would be a way more reliable experience.

~~~
MBCook
It was two years old and it wasn't in great condition. I priced it out and I
think it cost me about $50 or so, which was worth it for the total lack of
hassle.

The complaints for eBay etc. are exaggerated, but they are a problem. The last
few times I listed things on eBay it didn't matter that I set the item to only
be sold in the US, only paid through PayPal, etc. I got messages from people
offering to buy it if I would just ship it out of the country and accept a
money order. Then there are the messages offering to buy it if I contact them
directly and cancel the auction so they can save the fee. You see that kind of
stuff now and then on Craigslist too.

The amount of time and hassle I saved was worth far more than $50. If it had
been $250, I would have certainly gone with Craigslist.

------
amalag
The limiting factor is the buyer's reputation with his credit card company. If
he is repeatedly doing chargebacks people hopefully a credit card company will
notice and not take his side or better yet, not issue him credit. The idea is
that credit card companies also do not want to have this person as a customer,
and probably this is a new scam he dreamed up, not an ongoing one.

~~~
dangrossman
Why would the credit card issuer not want that customer? Each time he issues a
chargeback, they're getting paid a chargeback fee by the merchant (PayPal). It
could even be profitable for the bank.

------
trustfundbaby
I'm surprised that people still use ebay, I gradually moved to Amazon
marketplace/trade-ins 5-8 years ago and reading this, I'm glad I did.

------
sdfjkl
So what's a good alternative to the evil empire of eBay/PayPal? In the UK
(where PayPal is the only valid way to pay for anything on eBay) there is just
Gumtree, which is not an auction site and many categories get barely looked at
(and those that do are swarming with scammers too), plus a few small auction
sites that have so few users it's not worth bothering.

~~~
Nursie
I used gumtree in Australia to great effect a little while ago.

You may not get quite the same price you could through ebay, but you don't
have any fees so I'm pretty sure I cam out ahead. That and transactions were
completed in person for cash. When one of my items (WiMAX router) didn't work
correctly for the new buyer I offered to go round and help and give a full
refund if I couldn't get it working (it started working thankfully).

The weird thing about gumtree was the rapidity of response - I put a microwave
oven on there a midnight on a Saturday night, and got three email responses
within 15 minutes. They didn't follow up the next day, leading me to think
perhaps they were drunk or stoned prospective microwave owners, but it still
sold within 12 hours.

Perhaps I was too cheap, but it was an 'everything-must-go' emigration
situation.

~~~
alextingle
Read the comment text. Checked the userid. Was not disappointed.

~~~
Nursie
All is discovered! Flee at once!

------
tjbiddle
PayPal screwing over their users? That's new!

In all seriousness though, PayPal does need to get their act together. I've
lost easily lost a few hundred through various transactions over the past
couple years because of things like this - But there are so few options that
are available to the mass public that it's hard to move away from them as a
seller.

------
davidf18
The problem with Paypal/Ebay should be referred to your State Attorney
General. If enough people complain your state Attorney General could file a
lawsuit against Paypal/Ebay. The way I read this is that Paypal/Ebay does not
have the appropriate mechanisms in place to protect sellers from fraudulent
chargebacks and the seller loses out even when the case is clear that the
chargeback is fraudulent. The message appears to be that, "sorry, we agree
with you the seller but since the buyers bank agreed to the chargeback you are
out of luck." In my view the State AGs should force Paypal/Ebay to take the
loss in the case of fraudulent chargeback thus providing an incentive for
Paypay/Ebay to fix the system. The seller protection policy should be that as
long as the buyer received the proper product, you should get paid for it
regardless of fraudulent chargebacks honored by the buyers bank.

------
jeffyee
I've read all of the comments and believe the consensus is basically:

\- It's a lot cheaper for ebay/paypal to let the scammers rip off people than
it is to go after them, even when the facts clearly identify the scammer

\- Casual sellers are both less able to detect fraud and are more greatly
impacted by it

\- The feedback mechanism is insufficient "insurance" against fraud

\- "Seller protection" and "Buyer protection" are not suitable insurances
against the kind of fraud that actually occurs

\- The vast majority of transactions are legitimate

\- The selling prices on ebay can be substantially higher than Gazelle/Amazon,
or other reputable channel

\- Fraud will undoubtedly occur in some cases

How about if a 3rd party sold real buyer or seller insurance? They would be in
the business of identifying scam-like behaviour from buyers/sellers, help you
to avoid fraud it can detect, and ultimately insure you from loss. Not sure
how much the premium would need to be in order to make this work, but seems
like an interesting idea.

------
psycho
Don't read TechCrunch, don't sell on Ebay, think twice about Apple... Today's
HN headlines make me a bit depressed... :(

------
qq66
Yep, this is why on the rare occasions that I sell anything on eBay I write in
the item description, and enforce, a rule that only accounts over 3 years old
with more than 100 feedback are welcome to bid. I'm sure that shrinks my
market and depresses my price but better that than being scammed.

------
gnosis
The OP says he "Only sells to people with significant positive feedback",
"Only ships to CONFIRMED Paypal addresses", and "Requires Signature
Confirmation for items over $250"

Does ebay policy allow this? I thought the seller had to sell to the winning
bidder, regardless of buyer's feedback, etc.

~~~
Karunamon
Those are flags you can set in your sale, regarding feedback at least. If
someone has negative feedback, or lives outside of a list of countries, or has
unpaid item strikes, the user won't even see your sale.

Confirmed address is a paypal policy you can also turn on, which forces the
seller to use their paypal confirmed address when checking out or none at all.
If someone wins and they ask you to ship elsewhere, you say no. Which sucks
because the buyer might ding your DSRs (detailed seller ratings), which
determine your ebay privileges, search ranking position, fees...

(Whoever decided that buyers should be exempt from negative feedback needs
their fucking head examined)

Signature confirmation is an option you set with your shipper.

~~~
lmm
>(Whoever decided that buyers should be exempt from negative feedback needs
their fucking head examined)

It's the best decision ebay ever made. The seller is in a much better position
to rip you off than the buyer is (as others pointed out, this scam is only
possible for goods that you can convert back to cash). It used to be
impossible to leave negative feedback for bad sellers, because the hit to your
own reputation cost more than just eating the loss.

------
saurabhnanda
Fundamentally, is this a problem with eBay/PayPal or how credit card companies
deal with chargebacks (and eBay/PayPal simply having to parrot the same
model)?

As part of a large OTA, I've dealt with credit card chargebacks in the travel
industry and it's really not pretty. As soon as a chargeback is received by
the bank, you, the merchant, are presumed guilty. It's up to you to prove your
"innocence". The buyer can simply claim one of the many frivolous reasons
without providing an iota of proof and you'll be stuck with providing reams of
paperwork - chargeslip, e-ticket, boarding pass, verification from airline
that the passenger boarded the plane, etc. etc.

------
SoftwareMaven
This sounds like time for a small-claims court case. Take Paypal to court.
Given the evidence of fraudulent transactions, I would say there is a chance
they could lose. And, if nothing else, it will cost them at least the $600 to
pay for it.

------
shakeel_mohamed
The same thing happened to me with a BlackBerry a few years back. Somehow my
Paypal account was limited immediately afterwards, and thus my eBay account
was limited by virtue of connection.

I have no respect for either of these companies.

------
ggordan
Interesting read. I had no idea about this scam and it appears I am right in
the middle of one. Mind you, the item I sold is nowhere near as expensive.
Lesson learned though, and I wont be using eBay any time soon.

------
Apreche
If this happened to me, small claims court.

~~~
DannyBee
Small claims court requires you to be physically present in almost all states.
You also have to sue in the state _they_ reside, not where _you_ reside (there
are a few exceptions, none of which are remotely applicable here)

He may be able to pull off filing remotely with a few friends, but at some
point he's going to have to fly/drive to ohio and show up, have a place to
stay, etc.

------
benguild
This happens all of the time. Paypal is caught in the middle, and the credit
card company almost always decides in favor of the buyer. It's because they're
trying to provide the same service for both EFTs and credit cards, and those
work very differently in the real world.

Unfortunately, PayPal sticks the user with the cost in this case. It would be
out of business I'd imagine if it ate the cost.

Whenever someone pays for something with a credit card using PayPal, you
automatically lose all of your protections if they dispute it through their
cardholder. They just act as a passthrough.

------
ROFISH
Sounds like a problem with the credit card system rather than Paypal, since it
appears the customer used a credit card. If you sold iPhones via Stripe,
you're still liable for the same chargebacks.

------
sk24iam
We are actually developing a marketplace to help with cell phone fraud. We
currently allow users to accept payments via paypal, google checkout, or
amazon payments and expect to introduce Stripe Connect payments in 2013. This
is only a start to preventing fraud but we have more features still being
tested including a feedback system that we hope will work better than eBay's
does. This thread is very helpful in determining what people want in a peer to
peer marketplace.

Our site is still very new but we are open to criticism. cellsolo dot com

------
agumonkey
No group action possible ? such a pattern can't be left unprotected ...

~~~
Vivtek
Have you seen the updated PayPal terms of service? Claims to group actions are
automatically relinquished.

~~~
agumonkey
Nope, as lame as it is, I didn't read them and I find this rule very
surprising.

------
headShrinker
Being the grinch that I am, I stopped giving any feedback at all for buying or
selling on eBay. The principal being if anything ever goes wrong, feedback is
your only weapon.

~~~
Kliment
After a seller started harrassing me by telephone after I gave them neutral
feedback for shipping crap (not negative because they did refund me after I
sent it back) I stopped giving feedback altogether. Never again. I avoid ebay
altogether now for anything of value, and avoid paypal for everything.

------
DanBC
Did Ebay / Paypal forward the fraud information onto the bank?

Did the police do anything?

It really sucks that the seller took the hit. Who should? The credit card
companies? The banks of the scammers?

~~~
codenerdz
Credit cards and Paypals both take a piece of a transaction fee and creating
an illusion of a safety net is cost of doing business to them. Paypal has a
much better chance of having direct contacts with fraud departments of other
institutions than individuals do, so they should take it upon themselves to
sort it out.

Of course Im not being objective here, but their Seller Protection wording
could be a lot more forthcoming in communicating the lack of protection for
this case.

------
amalag
It is a problem when you consider a buyer has usually 6 months to do a
chargeback and you have 60 days to leave feedback and cannot change it later.

------
colbyaley
The same thing happens to me the other day with a "item not as described"
claim. Fortunately, the item was of much less value. Still pissed me off.

~~~
Florin_Andrei
What was the item?

------
Tomdarkness
Can someone explain to me how you can have a general delivery as a confirmed
PayPal address? Seems a bit silly that PayPal would allow this.

------
eminkel
It would be interesting to contrast the same policies for other similar
services (ex. Amazon Marketplace).

Sorry you're out that much money because of scam.

------
amalag
It's a tough problem, but without a third party to monitor the transaction
there can always be scams when it's your word against his.

------
reddit_clone
When the buyer made the chargeback, why isn't he forced to return the item?

Isn't this the obvious step that is missing from the whole equation?

~~~
codenerdz
No he was not. He went straight to his credit card and they took his side.

I had no chance of appealing because Paypal would not disclose the Credit Card
issuer contact info to me so that I could contact them directly

~~~
pdonis
_He went straight to his credit card and they took his side._

Took his side as far as the chargeback, OK, I can see that. It's not very
encouraging, but I can see it.

But took his side as far as keeping the item _and_ getting his money back?
That I don't see at all. How is that possible? And how would PayPal, and eBay
for that matter, not expect a return?

~~~
chockablock
What's to stop buyer from claiming the box contained a pair of old headphones
('significantly not as described')? The problem is the buyer is being taken at
their word; forcing a return of bogus items won't help.

~~~
pdonis
Yes, I can see that being an issue, and as a seller, you would want to somehow
document what was actually shipped, otherwise the buyer could indeed ship back
a bogus item.

But to not even raise the question of a return at all? That doesn't make sense
to me.

~~~
davotoula
You would have the opposite problem.

Even if the buyer sent back the original item, the seller could always claim
that he received just a brick.

It's all just borked, pretty scary selling any one of items on ebay once you
realise this :-(

------
vampirechicken
I think the Consumerist would love to run a piece about PayPal facilitating
mail fraud. You should tell them your story.

------
lucian1900
And it's not only seller protection that is lacking. Twice I've bought broken
items that eBay & PayPal refused to let me return (one was a smartphone with
broken touch, the other a kindle reported as lost/stolen).

They really, really suck. Sadly, there is little alternative to eBay.

------
arbuge
As an ecommerce merchant, I've frankly come to view the whole chargeback thing
as excessive and unfair buyer protection. The customer really is not always
right - but the staff at merchant banks and PayPal seem to operate under the
assumption that he/she is.

------
surferbayarea
ebay will go into oblivion in a few years. The current generation barely uses
them. As the last generation users slowly fade away, they will see the
business dwindling. Add to it incompetent management who stifle innovation.

------
TwoBit
Why on earth anybody would be dumb enough to sell an iPhone 5 on eBay is
beyond me.

------
johnnymonster
These kind of stories is EXACTLY why I will never sell anything on eBay...

------
codenerdz
Thanks for all the support guys! I wrote up a post-mortem here:
<http://news.ycombinator.com/item?id=4883468>

it includes some fun site stats

------
mvc
> the buyer’s credit card company decided in favor of the buyer.

How is this PayPal's and not the credit card company's fault? Couldn't the
same thing happen to anyone accepting credit card payments?

------
markokocic
Is this behaviour of PayPal possible only in USA, or it also applies to EU
countries? Does EU regulations enforce some additional protection mechanisms
for both sellers and buyers?

~~~
suhailpatel
I'm also wondering this. Most of the stories I hear are of issues in the
USA/Canada rather than the EU. I bet we get our fair share of scams too but
it'd be nice to know if there are any other protections (especially in the
UK).

Just my 2 cents, i've sold two smartphones on eBay and not had any issues. I
once did have a scam buy-it-now where they'd asked to ship to a foreign
country but was able to relist quickly and sell to a legitimate buyer.

------
chib
I remember when eBay changed their policy so that sellers could no longer
leave feedback, absolutely ridiculous. And I wouldn't trust PayPal as far as I
could throw them.

------
axusgrad
I did recently buy some old equipment for ~$250 on ebay from an amateur
seller. I'm not sure what eBay can do, except charge higher fees and provide
some insurance.

------
eloisant
In US you don't have the "pay at delivery" system? E.g. the postman gives the
item to the buyer in exchange of the payment, then the post office pays you.

------
arbuge
It's called "friendly fraud":

<http://en.wikipedia.org/wiki/Friendly_fraud>

Cute name, serious problem.

------
PagingCraig
I learned a long time ago never to sell expensive goods through Ebay. It's a
bad time waiting to happen.

------
Jugmendra
Efforts and time required

------
kahawe
I think this problem goes a bit deeper and it is something I have been
wondering about.

When I send a letter or a package and want to be sure it was received, I can
rely on tracking or I can go the extra mile and request a signed return-
receipt. Now all I have is confirmation the letter or package was handed over
and someone confirmed they got it. They can still claim when they opened it,
it was nothing but empty pages or a couple of stones - and there is no proof I
actually put an iphone or important documents in there. There is nothing that
guarantees both the seller AND the buyer that the actual item was very well in
there and it was just as advertised in the auction and there is no easy way to
prove it either.

From a legal point of view, how could you solve this? Let a third, independent
and reliable party handle the transaction for you? Or do you pay a notary to
certify that you actually packaged the iphone and that it's condition is as
advertised?

~~~
dexen
Polish Post Office provides a service solving this very problem: the sender
can marked the parcel with ``recipient opens the parcel in presence of mailman
before payment and can return it right away without payment if she so wishes''
option. This optional service is quite cheap, at about 10% of general shipment
fee methinks. The other downside is that recipient have to pick the parcel,
either at doorstep or at the post office; it cannot be left in the mailbox.

On polish market, `allegro.pl' -- rather than eBay -- is the dominant
auction/garage sale platform, and it is somewhat common to request such option
when ordering from sellers without reputation. There is some abuse of this
system, but it seems low enough.

~~~
gregpilling
TIL that the Polish post office offers services that the US Postal Service
does not. I wish the USPS had the "Recipient opens" option.

------
paulhauggis
Add Amazon to your list. It's much worse.

-You can't block scammers -Buyers can return an item for any reason (even a year after they purchased it from you). 99% of the time, Amazon will let them keep the item and refund them. This happened to me many times. -If you get banned, they will keep your money for 90 days. Banning is based on automated robots that look for patterns. You have no recourse. All Amazon associates will tell you to use their email support system. The email support system is manned by either scripts or reps that will only respond with canned answers.

Ebay isn't nearly as bad. I've had claims filed against me a few times by
various people and as long as I had the tracking number, I won the claim.

As someone who made amazon thousands of dollars, I got tried of being treated
this way. The only reason they can still continue this behavior is because
they are the biggest marketplace.

It's hard for competitors because you need the traffic.

------
UnFundedHype
The whole tech culture is also to blame. I'm sure there have been a LOT of
great alternate ebay, paypal start ups who just didn't get traction. Bloggers
won't talk about you if you haven't raised a million and you won't get much
traction on google without bloggers or spending major bucks.

My Dreamybids.com site for example, is an awesome service that uses the
quibids model. It allows anyone to host their own auctions for products or
services. Meaning a graphic designer could auction $200 of services. 10 people
pay $20 to participate in the auction, one person wins and gets $200 of
graphic design for $20.

Good luck getting traction with that if you aren't in the tech crunch,
mashables, stanford, in club.

~~~
lumberjack
>10 people pay $20 to participate in the auction

That doesn't seem like an auction and to be honest I don't really like the
idea either.

~~~
UnFundedHype
Then you are part of the innovation problem. You could be the one auctioning a
service instead.

~~~
paupino_masano
It doesn't really sound like an auction - more like a raffle. i.e. If 10
people pay $20 but only one wins it...

I actually looked at making a site like this for selling my house a couple of
years ago. Fortunately I did some analysis before building it as in NZ it came
under the gambling commission rules. This meant that I could only build a site
like this if I donated all the proceeds to charity - unfortunately that was
against what I was trying to achieve so never went through with it.

