On September 7, 2010, eBay put into place a new Buyer Protection Program. In very simple terms, this Program basically allows buyers to receive a refund for practically any item that is purchased on eBay.
Pursuant to the Program, eBay buyers are eligible to receive a full refund (including original shipping costs) if the item purchased is not received or if the item is not as described. This Program is basically a 100% guaranteed return policy that eBay offers to its buyers but that is in reality paid for by eBay sellers.
eBay sellers need to know that the eBay Buyer Protection Program overrides any return policy that an individual seller may have. In order to be able to sell on eBay, sellers must agree to the Buyer Protection Program. By so agreeing, sellers basically agree to accept returns and refund the purchase/sales price in full, including their shipping and handling costs.
The problem with the Buyer Protection Program for eBay sellers is as follows:
1. A buyer can claim that an item was not received and get a full refund (including the shipping costs paid by the buyer to the seller). Hence, the buyer is not required to return the item to the seller. In this case, the seller is out of the merchandise, out of the sales price for the item and out of the shipping costs incurred by the seller to ship the item to the buyer.
Unfortunately for eBay sellers, a USPS delivery confirmation showing that the item was delivered is evidently not sufficient proof that the item was actually delivered to the buyer. In a recent transaction, I personally experienced this to be true:
* I shipped the item to the address that the buyer provided in his PayPal payment. I used the PayPal shipping label feature to generate the label. This feature automatically generates a tracking number and fills in the shipping address provided by the buyer so there is no margin of error on my part in addressing the shipment, i.e., that I may have hand written or retyped the wrong address.
** The USPS tracking system showed that the item was delivered to the buyer. Yet, the buyer was able to successfully claim that he never received the item. This is in spite of clear proof that I furnished to eBay that the item was shipped to the address provided by the buyer and that it was, in fact, delivered, as confirmed by the USPS.
*** In this case, the buyer was able to keep the item and I had to refund the buyer’s full purchase price, including my out-of-pocket shipping costs.
**** Not only did the buyer get the item for free, he got it delivered for free AND he was able to leave me a negative feedback. Negative feedback hurts eBay sellers in many ways. Not only does it reflect badly on a seller to prospective new customers, it affects an eBay seller’s ratings, search rankings and eligibility for discounts.
***** Finally, as to insuring the shipment. In this case, I was not able to file a claim for insurance because the USPS confirmed that it delivered the item to the address on the label.
2. A buyer can claim that the item is not as described. In this case, the buyer is technically required to return the item to the seller and the seller is required to refund the purchase/sales price of the item plus the original shipping costs. Although the full refund is made to the buyer immediately upon the buyer’s notification to eBay that the item has been shipped back to the seller, the seller must wait for the item to be returned, hope that the item returned is the actual item sold and/or that it arrives in its original, resalable condition. In this case, the seller is out of his/her out-of-pocket shipping costs and may be subject to negative feedback with all of its attendant negative implications.
In order to utilize the Buyer Protection Program, a buyer only needs to file a dispute with eBay’s resolution center to get the process started. As soon as the buyer files the dispute, the total amount paid by the buyer to the seller is deducted from the seller’s PayPal account and placed on hold pending resolution of the dispute.
Again, unfortunately and speaking from personal experience, the disputes appear to be handled by software and not people. In my case, I had provided a third-party (USPS) verification that the item was delivered to the address provided by the buyer. Yet, within only 2 hours of providing this evidence to eBay, I received what appeared to be an automated email message from eBay informing me that the dispute was closed in favor of the buyer.
This is a true story and I have several other horror stories involving eBay’s Buyer Protection Program which I will describe in detail in other articles. I feel a need to get the word out to other eBay sellers or potential eBay sellers because although I have been a top-rated power seller on eBay for 8 years, I am a small seller and every instance of loss of merchandise or a negative reflection on my seller’s reputation really hurts me financially. I hope this may help other sellers to recognize the risks and dangers of selling on eBay with the Buyer Protection Program in place.