Unnecessary Microsoft Comparison and History of PayPal Accounts

(I wrote this section, but it doesn’t necessarily have much to do with the topic at hand.  Skip down to the section titled “The Scam” if you’re in a time crunch.  I have also written a condensed version of this entire post at the end if you only want to read one paragraph about it.  It’s all “interesting” though).

PayPal has recently taken a page out of Microsoft’s marketing handbook by offering a smorgasbord of account types and varieties designed to fit the unique “needs” of various types of people.  The current trend is that one size no longer “fits all” and customers want a product designed specifically for their individual needs.  Remember when upgrading to the new Windows meant driving out to CompUSA and picking up a copy of ‘98?  Microsoft now offers an endless array of versions – Home, Premium, Business, Ultimate, Professional, Downloadable, Upgrade, Starter, N, Enterprise, 32bit, 64bit, and those are only a few.  PayPal has “progressed” in a similar vein over the years by offering a wider variety of products and options to expand their user base.

As recently as a couple of years ago, all PayPal users either had a “Personal” or “Premier” PayPal account.  The major difference between the two was that Personal account holders could not accept credit card payments.  Personal PayPal account holders did not have to pay fees on payments funded by an instant transfer between PayPal accounts or a payment funded directly from a bank account.   At one point, PayPal even allowed Personal account holders to accept a few credit card payments per year without having to “upgrade” their account.  Regular fees still had to be paid on those credit card payments, but it was still cheaper than a Premier account.   On the other hand, Premier account holders had to pay fees on every payment received, whether it was a credit card transaction or an instant transfer of funds between PayPal accounts.  This is precisely why PayPal is so wildly profitable.  The cost to transfer funds between two PayPal accounts is virtually zero, yet PayPal charges the same 2.9% + 30 cents per transaction as if every transaction is a credit card transaction.  This is also why PayPal has historically made it as difficult as possible for users to actually pay with their credit card.  Every time a user chooses to pay with a credit card it is a loss of revenue for the company.

Companies offer a range of products not because they like variety, but because it is a means to their ultimate goal – maximized profitability.  Microsoft and PayPal don’t really care if you’re happy per se.  They merely desire to extract the most money out of your wallet without offending you so much that you won’t return to spend more in the future.  By offering a medley of Windows editions with a huge pricing gap, Microsoft can charge $300 to a business that needs an expanded set of features while at the same time selling a dumbed-down version to your mom for $100.  People are more likely to spend money upgrading Windows if there is a version that they identify as both affordable and necessary.  Of course “more” is not “always better” and Microsoft ended up going a little overboard with their launch of Vista.  Instead of feeling taken care of, customers were confused by the endless array of options and editions.  PayPal hasn’t quite taken it that far, but the addition of Business and Student accounts is a sign of where the company is going in the future.

Personal Accounts Change

As first reported back in May, PayPal made significant changes to Personal PayPal accounts back in June of 2009.  A Personal account holder can no longer accept payments for “commercial transactions.”  Not even one.  Once a Personal account holder makes a sale for a good or service they must “upgrade” their account.  Personal account holders no longer enjoy the benefits of receiving unlimited payments funded by a bank account or instant funds transfer at no cost.

The Difference Between Personal and Commercial Payments

PayPal spells it out clearly in their user agreement:

“4.2 Receiving Payments for Commercial Transactions and Personal Transactions. a. Fees depend on whether you are making a commercial transaction or a personal transaction. A commercial transaction involves buying and selling goods or services, and payments received when you send a “request money” using PayPal. A personal transaction involves sending money to and receiving money from friends and family without making a purchase. b. If you are selling goods or services, you may not ask the buyer to send you a personal payment for the purchase. If you do so, PayPal may remove your ability to accept personal payments.”

Difference in Fees

There is no fee for personal transactions as long as the source of funds is either the PayPal account or a bank account.  This is why personal payments have become increasingly popular as a payment method on forums and other selling platforms.  People do not like to pay money when they perceive there is no advantage.  If the funding source of a personal payment is a credit or debit card then the fee is the same as if the transaction was commercial, or 2.9% + 30 cents by default.  All commercial transactions are charged the same rate regardless of funding source.  There are additional fees for “cross-border” transactions for both personal and commercial payments as well.

The Scam

The scam is fairly simple.  The scammer convinces the victim to pay for an item via a PayPal gift or personal payment.  This can be set up in a variety of ways, many of which do not appear to be fraudulent at first glance.  For example, there are many online forums and communities where members can buy and sell items of mutual interest as well as Craigslist and others.  A scammer might list their item for sale and state that they require a gift payment so they do not have to pay the 2.9%+30 cent fee or to avoid the PayPal 21-Day Payment Hold Policy.  They might state that the price is $100 via a PayPal gift payment or $100 + 5% for a PayPal credit card payment and the buyer, wanting to save $5, may opt for the gift payment option.  The seller might say that they cannot accept credit card payments or any number of other excuses for why a gift payment is necessary.

When a buyer sends a gift payment for an item they think they are purchasing, there is no mention of any item or service being sold nor is there a shipping address attached to the transaction.  There is a space for a “personal message” of 300 characters, but even if the buyer inputs details of the transaction there is little that can be done.  This means that the “seller” is not obligated by PayPal to actually ship an item or provide the service that may or may not have been agreed upon outside of PayPal through email, text message, or whatever else.  There is nowhere for the seller to input tracking and nowhere for the buyer to dispute the transaction if a problem occurs.  As far as PayPal is concerned the transaction is exactly what it says it is – a gift.  This is stated in section 13.5 of PayPal’s User Agreement; PayPal clearly states, “You may not file a dispute for a Personal Payment.”

Another problem with using a gift payment to pay for an item is that the seller may not intend to scam at all, even though that may be what ends up happening.  All shipping services lose and damage parcels.  Many transactions also run into problems due to some kind of miscommunication or dispute over the quality of an item.  “Excellent” condition to me may be “below average” condition to you, for example.  Sellers often over exaggerate the condition of their item in order to sell it for more money, while at the same time minimizing the appearance of flaws.  PayPal does not cover “Item Not As Described” disputes for most transactions outside of eBay, even for commercial payments.  For commercial transactions, it is at least possible to dispute an item that is not received.

PayPal and eBay go out of their way to make PayPal feel safe for buyers, but the truth is that there is startlingly little protection for transactions outside of eBay.  Even though dispute resolution on both PayPal and eBay is skewed in buyers’ favor, it is still possible for sellers to manipulate the system and “win” disputes on items that were either not delivered or not as described.  PayPal offers no protection for buyers when there is a problem with the quality or condition of an item when the transaction occurs outside of eBay.  This is due to the fact that it would be impossible for PayPal to try to figure out the terms and details of any particular sale.  On eBay, there is just one page to take into consideration – the eBay listing.  Outside of eBay there could be any number of emails or details to try to sift through in order to make a “fair decision.”  If a buyer disputes the quality or condition of an item on a transaction outside of eBay it is almost guaranteed that they will soon receive an email from PayPal that their dispute has been decided in the seller’s favor, because PayPal dispute resolution does not consider the quality of an item, only whether or not something was received.  A gift payment multiplies this risk, because it will not be possible to dispute the delivery of the item with PayPal or file a credit card chargeback.

How to Protect Yourself

Never pay for an item or service online with a PayPal personal payment.  There is no way to dispute the payment directly with PayPal and it against the PayPal User Agreement.  PayPal states:

4.1 Receiving Personal Payments.

If you are selling goods or services, you may not ask the buyer to send you a Personal Payment for the purchase. If you do so, PayPal may remove your ability to accept Personal Payments.

If you are on a website or forum where items are being bought and sold with PayPal personal payments, you may want to advise the moderators and/or the community about the risks of using personal payments for purchases.  Respectable websites should not allow its users to ignore and break the User Agreement of a payment service such as PayPal and at the very least should include a disclaimer about the risks involved.

When using PayPal it is always best to pay with a credit card.  A credit card payment allows buyers to file a credit card chargeback directly with their credit card company or bank.  A buyer may file a credit card chargeback on a PayPal payment even when PayPal denies a buyer’s claim or on a commercial payment where it is not possible to dispute the payment directly with PayPal.  Almost all credit card chargebacks are decided in the buyer’s favor and the credit card company may even let you have access to the disputed funds before the chargeback is resolved.  Some debit cards also allow buyers to file chargebacks, but it is rarer.  Also, I am not aware of any credit card “gift card” that allows buyers to file chargebacks, so it is unlikely that you will be able to file a chargeback with a Simon Gift Card or an American Express gift card purchased from a grocery store or similar outlet.  When choosing a credit card, you may want to research which one has the best chargeback and fraud protection and use that card online.

What To Do If You Already Think You Have Been Scammed

If you think you have been scammed by a seller, it is usually beneficial to call PayPal at 1-888-221-1161.  PayPal’s dispute resolution services are generally automated online, but there are employees at PayPal customer service who can override the computer’s decisions and possibly do something for you.  You may also have luck contacting PayPal’s Executive Escalations Department.  Emailing won’t get you anywhere.  More and more, it seems like whoever calls PayPal and whines and complains with more vigor will win the dispute and it’s possible you will reach someone with a sympathetic ear.  Keep trying if you aren’t successful.  Make sure you make it clear that you have been a loyal PayPal customer, but your current situation makes you question whether you will use the service in the future.  This is the key point to make in most merchant disputes.  Keeping you as a customer is likely to be cheaper in the long run than obtaining a new one.   At the very least, you can let PayPal know that the seller is accepting personal payments for merchandise and they are more likely to shut the seller down.  If the item was purchased on a forum, make sure you let the community and/or forum administrators what happened.  It’s usually better to state facts rather than go into hysterics.  If you paid with a credit card then you should contact your bank and inquire about the chargeback process.  Most credit card chargebacks are successful.

Condensed

Never pay for an item with a PayPal personal/gift payment.  Sellers may use various tactics to convince you that paying with a gift payment is necessary or encouraged, including adding fees for credit card payments or claiming that they can only accept personal gift payments.  Not only is it against PayPal’s user agreement, but you will also not be able to dispute the payment with PayPal should you not receive the item.  For off-eBay transactions, PayPal will not allow you to escalate a claim for an item that is not as described.  For this reason, it is imperative that you pay with a credit card whenever possible.  Even if PayPal dispute resolution does not refund your payment, you may still file a credit card chargeback with your bank and you should be able to recover your payment using that method.  If you think you have already been scammed, make sure you call PayPal to explain your situation and ask to speak to as many people/supervisors as possible until you receive a satisfactory resolution.  The bottom line is that using PayPal online is always risky, but using a PayPal personal payment to purchase an item is by far the riskiest method.  Although the transaction may go as planned, it is not worth the risk of paying for an item that you will never receive to save a few dollars.

The Promise

For something like two years now, eBay has been promising to add functionality that would allow sellers to pay for and print shipping labels directly from the eBay website.  It is now finally possible, although it is not the default method and there is little information available about how to set it up or make it work.  Luckily for eBay, there are thousands of Mom and Pop auction blogs written by disgruntled auctioneers that really have nothing better to do than explain things for them.   PayPal has been promising to add Small and Large Flat Rate Box options to its own website for years as well.   While they still haven’t done that (lol), it is now possible to pay for Small and Large Flat Rate Box shipping labels from eBay.  Beggars can’t be choosers I guess.  There are several advantages and disadvantages to using eBay to print shipping labels when compared with PayPal or USPS’s own Click’N’Ship service.  Here we go.

Advantages:

• It’s possible to pay for and print labels for Small and Large Priority Mail Flat Rate Boxes as well as USPS Express Mail International Flat Rate Envelopes.  It is still impossible to select these services when using PayPal.  All other shipping options that are available on PayPal are also available on eBay, including Media Mail and First Class which are not available at USPS.com.
• There are fewer boxes to fill out and fewer screens to click through, especially for international shipments when customs forms are required.  This makes it the fastest way to print a single label.
• It’s a much cleaner interface.  PayPal has boxes, words, pop-up screens, and options splattered all over the screen.  Not so with eBay.  It’s easy to turn off and on receipts and choose whether or not to display postage costs for each individual label.

Disadvantages

• Printing multiple labels is not as fast or efficient as with PayPal Multi-Order Shipping.
• The options and differences may take getting used to.  Some users do not find it easier or faster than PayPal, especially when printing more than one or two labels.
• It may be difficult to keep track of where tracking information is stored and which website is used to void or reprint labels, especially when eBay, PayPal, and USPS.com are used.

Bottom Line

Using eBay to print labels for Small and Large Flat Rate Boxes may be a life saver for many.  I have heard countless stories of people trudging to the Post Office in order to ship a Small Flat Rate Box because they can’t use PayPal and are unaware it’s possible to print and pay for a label at USPS.com.  Unfortunately, since eBay label printing is turned off by default, many of these same people will still be trudging to the Post Office to stand in line unless they scroll through to page 42 of Google results to find this tutorial.  It’s not our fault they’re not AuctionCopers though, right?

Requirements

1. EBay account
2. PayPal account with valid credit/debit card attached
3. A Sale
4. Either disable pop-up blocker or add shiptrack.ebay.com to your allow list if necessary

How To Turn On EBay Label Printing

By default, clicking “Print Shipping Label” next to a transaction in “My eBay” will take you to PayPal to print the shipping label.  Printing labels within eBay must be manually enabled.  Luckily, it’s a cinch once you know what to do.  Go to My eBay and mouse over, but don’t click, the account tab and then click on “Site Preferences.”

The fourth option down on the next screen is “Shipping Preferences.”  Click “show” on the far right to see the following options.

You will see a variety of goodies here, many of which I have covered previously.  You will want to check the box “Yes” after “Pay for shipping and print U.S. Postal Service labels on eBay” and click “Apply.”  That’s it!  Enabled!

Shipping Label Walkthrough

Now go back to an item sold and click the “Print Shipping Label” Button next to an item that needs to be shipped.

You should now be redirected to a page similar to the following, rather than PayPal.

Here, it’s possible to select the service and package type, including the coveted Small and Large Flat Rate Boxes.  If you select “package” it will ask the weight, but not the dimensions of the package.  If you select “large package” then you will need to fill in the dimensions.  Once a package size and service is selected you will need to click the “calculate” button before you can proceed to the next screen.  The button is hidden underneath the drop down menu pictured above, but will be plainly visible once your selections are made.  You can then select whether or not you want a receipt to print or the postage price hidden by clicking the “Change” button next to “Additional Options.”  I can’t think of a purpose for the receipts since all of the information is stored online in various places.  Since I offer free shipping, I usually choose to display the cost, although it’s unlikely anyone notices.  If you charge $20 to ship a one ounce package then I would recommend hiding the cost.

The cost of shipping will then be visible at the bottom of the page and look something like the following picture.  It is also possible to check a box here that will automatically bill PayPal for all of your labels in the future.  Selecting this box means you will not have to log in to PayPal every time you print a label on eBay.  I would suggest checking it.  When you’re ready, take a deep breath and click “Pay and Print.”

Since this is (probably) your first time printing a label on eBay you will have to log in to PayPal.  If you checked the box on the previous screen, you will also have to agree to PayPal’s billing agreement to debit your account each time you print and pay for a shipping label.  The agreement looks like this, which you will see after logging in to PayPal on the usual screen.

Click “Agree and Continue” and you should be redirected back to eBay and your label should be available for printing in a window similar to PayPal’s.  If no window appeared then it’s likely that your pop-up blocker blocked it.  After printing, a screen that is also similar to PayPal’s will present itself.

From here you can do pretty much anything you could do after printing a label in PayPal.  You can click the “Print Packing Slip” button to see the item you’re supposed to ship.  You can just close the packing slip box once you make a note of the item.  I do this a lot because I’m always forgetting what people bought due to my limited brain power.  I’m not sure why PayPal and eBay stopped displaying the item purchased on the label confirmation page.  They used to display it and then decided to stop one day.  You can also reprint or void the label if necessary.

That’s it.  You should have a brand new shipping label to show off to all of your friends, or if you’re like me, Mom and Dad.

After The Fact

If you need to void the label you will need to do it in eBay rather than PayPal.  Go back to the transaction in My eBay, where you clicked “Print Shipping Label” and click the drop down arrow to select “View Order Details.”

From this page you can view the shipping information as well as reprint the label within 24 hours of creating it or void it within 48 hours.

Unfortunately, PayPal does not provide much information about shipping labels purchased on eBay, meaning you may have to keep track of shipping in two different places.  This is what the PayPal details shows for the label from the example above.

As you can see, PayPal doesn’t provide the address of the recipient, or really any information other than the amount paid for postage and the time the label was printed.  There is also no place to void or reprint the label.  On top of that, PayPal does not display the relevant Delivery or Signature Confirmation number on the transaction.  Only “In Progress” is listed as shown in the following screen capture, even though the item has already shipped.

There is no easy to click link to check the status of the package like there is on a label printed from PayPal.  If you want to check the status then you’ll have to click into the details of the transaction and then copy and paste the number into USPS.com.  It’s a medium sized hassle that should, but probably won’t, be fixed in a future update.

Snarky Conclusion

I have no idea why it isn’t possible to print and pay for Small and Large Flat Rate Boxes on PayPal.  PayPal and eBay representatives have been saying for years that their programmer(s) are working on it, but it appears that eBay fired whoever actually knows how to program websites some time ago.  I know improving eBay and PayPal isn’t on the top of anyone’s to-do list in 2010, but honestly folks, if I can make a banner as awesome as the one found on this website then I think I could figure out how to create a Large Flat Rate Box button for PayPal.  Just saying.

I’ll still be doing most of my label printing with PayPal, because Multi-Order shipping is just so simple and efficient.  I’m also easily confused, so trying to keep track of various labels printed in different places would be too much for my small brain to handle.  I will be using eBay for Small and Large Flat Rate Boxes instead of USPS, but just barely.

If you would just like to read my pros, cons, thoughts, and alternatives to the MoneyPak please skip down to “Conclusion” at the end of this guide.

Gibberish Introduction / Buying the Card

There’s usually only one kind of email from PayPal I like to get – “Instant Payment Received.”  Actually, I miss the days when they included “Notification” in the subject, but I digress.  Yesterday, I received an email with an intriguing subject, “New! Add money to your PayPal account with MoneyPak” that looked something like this:

It’s now possible to fund a PayPal account using nothing but cold hard cash.  As your trusted Chief Correspondent (Think CNN’s Christiane Amanpour with bombs falling over Baghdad in the background), I took it upon myself to head down to the local Wal-Mart and check this MoneyPak out myself.   Luckily, my bullet proof vest just came back from the cleaners (blood, should have seen the other guy) so I wouldn’t necessarily be risking my life.  Plus, I needed an inflatable to add to my collection and Wal-Mart also happens to be wedged between Check into Cash and the Liquor Store so either way we’re set.  If only the Liquor Store took PayPal (I know, I know, PayPal Debit, but work with me here).

Anyway, the idea behind this whole MoneyPak thing is basically that you go to the store, find the aisle where they keep all the good gift cards like Red Lobster and Jack Daniels and look for the “Green Dot” MoneyPak card.  Simply take the card to the register along with your cash or credit, tell the cashier how much you’d like to add to the card (Minimum $20 Maximum $500), pay the $4.95 service fee, and away you go.  Next, bring the card home, enter the MoneyPak number into PayPal, and the money will magically be transferred from your MoneyPak to your PayPal account.

The card looks like this:

Your receipt will show the amount you put on the card along with the service fee.  The email says “$4.95 or less,” but I don’t think you’re going to find it for anything less than $4.95 since it’s printed right on the card.

Transfering the Money From MoneyPak to PayPal via Magic

Transferring the money from the MoneyPak to your PayPal account is a fairly easy process.  To find out just how easy it would be I went ahead and opened a new Personal “Buying Only” PayPal account.  After the account is created PayPal wants you to add a credit card or bank account, but it is possible to skip this step and head right to the good stuff.

Next, or if you already have a PayPal account, click “Add Funds” at the top.

This will take you to a screen with a pretty little green “MoneyPak” icon.  Click it.

If you have questions about MoneyPak or want more information, I suggest clicking the “Learn More” button.

Next, you enter the 14 digit number that you scratched off of the bottom of the green MoneyPak card.

The following screen is where you decide how much of your MoneyPak you want to transfer to PayPal.  Remember, after 90 days your MoneyPak is charged a monthly fee of $4.95 per month so you’ll want to keep track of the money on it and disburse it within the 90 days.  It took about two minutes after clicking “Fund Account” for the next page to load so be patient and don’t click “Fund Account” again if you get impatient as it might screw up the funding.

The confirmation page is straightforward and should reflect your previous funding choices.

Notice though, that your yearly funding limit is $250 per year.  Mouse over the question mark and you’ll see that you have to give MoneyPak your name, address, date of birth, and Social Security number in order to raise the funding limit.  I’ll cover this more in the conclusion of this guide.

Clicking “Return to PayPal Account” should bring you back to your main account page with your new balance.  It took more than four minutes for MoneyPak to redirect me to the PayPal website though, which seems excessive.  I was about to give up when it finally loaded, so be patient as you might have to give it a few minutes.  Hopefully, as the relationship between PayPal and MoneyPak matures things will speed up.

Your account should show your new balance as well as a payment from “Green Dot MoneyPak” for the amount sent.  You should also receive an email with the funding information.

That’s about it.  It may take several minutes for MoneyPak to communicate with PayPal throughout the process, but overall the integration is seamless and it should be easy for most users to figure it out without much heartache. Plus, you have me holding your hand and I demand nothing less than success.

Conclusion

Pros: If you have absolutely no access to a credit card or bank account or anyone with a credit card or a bank account then MoneyPak may be your only option to use PayPal online.  It’s a somewhat convenient way to fund a PayPal account, especially if you plan ahead or are going to the store anyway.  If you’re in a hurry and can’t wait for an e-check to clear or funds to transfer from your bank account to PayPal then the MoneyPak is a faster option.  It can be used to pay for items on eBay.  Integration with PayPal is simple.  The $4.95 service fee isn’t ludicrous.

Cons: If you don’t have a bank account or credit card added to your PayPal account then you have no way to confirm your address.  Most retailers that accept PayPal will require a confirmed address, which means you won’t be able to use your cash-only account to pay with PayPal on most websites.  Most sellers outside of eBay also require a confirmed address.  To prevent money laundering, if you want to fund your PayPal account with more than $250 per year you will have to provide MoneyPak/PayPal with your name, address, birth date and Social Security number.  After 90 days, your MoneyPak balance will decrease $4.95 per month, or $60 per year, which means you will want to disperse your MoneyPak funds as soon as you add them.  PayPal advertises that it’s the “safest way to pay,” but that is only true when you use a credit card to pay and even then there are still inherent problems with PayPal’s dispute resolution.  When you use cash to fund your PayPal account, you are relying on PayPal to retrieve your funds if a problem arises.  It may be a hassle to find and go get a card to purchase.  The service fee of $4.95 is higher than most other account funding options.

Alternatives: Funding your PayPal account with a bank account is free and adding and paying with a credit card is the safest way to use PayPal online because of the added protection most credit cards may provide.  Debit cards also work on PayPal.  If you do not have access to any of these, but know someone who is willing to let you use their credit/debit card, you can purchase a Simon Gift Card or Simon Gift Account. To learn how to do it step by step see my guide, Verify and Lift Limit on PayPal Account Without Credit Card or Social Security Number With Simon.  Simon Gift Accounts only cost $2 and you can verify your PayPal account and confirm your address by using it.  You can then use it to pay for whatever you want just as you would use a regular credit card.  Remember though, that Simon cards offer no chargeback protection so you will want to be extra careful when deciding what to purchase and from whom.

In Conclusion:  The Green Dot MoneyPak is an interesting new option for funding PayPal accounts.  I wouldn’t recommend it since there are so many other options, but if cash is really your only option and you find yourself in a situation where you have to use PayPal then this may be it.  Just be aware of the restrictions on a cash-only Personal PayPal account, the cost of the card, and the lack of protection if something goes wrong.

EBay has introduced the (not so) much heralded “Search Visibility Report” as part of the new Seller Dashboard update.  To access it, simply go to “My eBay,” mouse over “Account,” Click “Seller Dashboard” and look on the far left for “Search Visibility Analysis” under “Reports. 

The report is supposed to give you insight into how eBay calculates your listing placement in Best Match search.  You can also type in various keywords to find out what page your listing will show up on. When it was first announced it sounded like it would be a helpful tool.  Unfortunately, like all new things eBay, at best it doesn’t work and at worst the information it provides is completely worthless.

One of my favorite guides of all time is How to Raise Your Listing and Gain More Visibility in eBay Best Match Search.  Follow these steps and you would find your listing at the top of search results every time (pending you follow the other 3,000 pages of advice on this website).  As part of the October update, eBay is mysteriously tweaking the “Best Match” algorithm.  For one reason or another, eBay won’t tell anyone how it decides what listings go where or what exactly you can do to raise your listing in search results.  Time will tell what changes they’ve made as sellers try to adapt, and in the process lose money on listings that are never seen by anyone other than their mother.

Let’s have a look at a Fixed Price listing that has been relisted after the first 5 items sold out. To run your own report, simply find the item number of a current listing and input it into the report creation box or select a category to run a report on all of the listings in that category:

Ok..we know the price and we know whether or not we’ve set free shipping so that isn’t much help.  If we click the little question mark icon next to each topic we get a little explanation of what eBay may or may not be thinking.  Next to “Free Shipping Boost” it says:

“If you offer free shipping you may be raised in search results. However, this boost does not apply to all listings or all categories.”

Cryptic as usual.  Luckily our listing in Clothing gets a boost.  Fair enough – we knew offering free shipping previously gave a huge boost in search results.

Next up is “Sales/ Impressions” with the explanation:

“The ratio of sales to the number of times the listing has been displayed to members in search results (using the midpoint of the impression range). This is a measure of how relevant members perceive the listing is to their search.”

This is where things get a little bizarre.  First of all, if all of the buyer’s search terms aren’t in your item’s title then the listing won’t show up at all. For example, if your title is “Abercrombie Jacket” and a potential bidder searches for “Women’s Abercrombie Jacket” then your listing won’t show up in their search results even if what you’re selling is precisely a women’s Abercrombie jacket.  Conversely, if a bidder searches for “Women’s Abercrombie Coat” and your title is “Women’s Abercrombie $250 Wool Parka Jacket,” then your item won’t show in the buyer’s search results even if you’re selling precisely what the buyer is actually searching for.  Occasionally all of the keywords don’t necessarily need to be present though, which is also a bit contradictory (sorry, but things like this aren’t my fault).  For example, if you run a search for “Nintendo Wii,” eBay will return listings that do not have “Nintendo” in the title.  Don’t ask me how or why eBay makes this distinction especially because it makes it easier for sellers to stick “Wii” in items that have nothing to do with the Wii.

Ideally, sellers want their listings to show up as often as possible in order to reach as many bidders as possible.  There has always been a fine line between writing a “good” title and “keyword spamming.”  Keyword spamming occurs when a seller lists a bunch of keywords in their title that have nothing to do with what they’re actually selling.  For example, if I was selling a broken first generation IPOD I might write my title as “IPOD 30 60 80 120GB CLASSIC NANO TOUCH IPHONE ZUNE CASE HD.”  Clearly, I am using a bunch of keywords that have nothing to do with the actual item in order to get as many views as possible.  This has always been against eBay policy and if I did something like this I could look forward to getting the listing removed along with a matching policy violation.  What eBay appears to be doing here is make it so keyword spamming is counterproductive, at least as far as placement in Best Match search. In addition, eBay appears to be penalizing sellers for using titles that yield the highest number of relevant search impressions unless those impressions translate into sales.

Thanks to 21st century data collection, eBay knows how often your listing shows up in buyer’s search results.  What we don’t know is whether or not the bidder actually ever makes it to the listing.  If my item is one of 32,981 listings and it appears on page 175 of search results does eBay count it as an impression?  If the buyer purchases the very first item in search results and doesn’t even notice mine is cheaper, better quality, and ships faster, does eBay still count it as an impression?  Is it my fault that bidders search for irrelevant terms?  Is it my fault no one even trusts anyone on eBay anymore and no one is buying?  Is it my fault Best Match search is based on a stupid algorithm in the first place?  What is a “good” Sales/Impression ratio? Is it a set percentage in each category or some overall number? How important is this information?  Who knows!

The larger problem here is that the information listed in the report is inaccurate and as you run reports on your own listings you will notice the same thing. The listing used in this example has five original sales and three sales from the current listing, for a total of eight. The report doesn’t reflect these sales; nor does it reflect the past page impressions or clicks. On several of my other relisted Fixed Price listings the past sales aren’t noted at all. One of those listings also has five previous sales and three current sales and the sales are listed at two which isn’t true about the past listing or even the current listing! It’s unclear whether eBay uses this same information to actually place listings in Best Match search, but we have to assume eBay isn’t purposefully feeding us bogus information (????) If eBay isn’t even using valid sales data then how can Best Match Search work successfully?

Next up is “Seller Performance.”  You may have noticed on your Seller Dashboard that there is no longer a “Raised, Standard, and Lowered” search standing.  That’s because your Seller Performance no longer raises your items in search standing unless you’re a Top Seller.  At this time I’m not sure if you’ll be lowered if you aren’t “Above Standard” because I don’t have any accounts like that currently, but maybe I’ll try to lower one for research purposes.  I don’t recommend buying any tapered shirts from User ID AClockWorkOrange for the next 7-10 days.  How much does Top-Seller status raise your listings you ask?  We don’t know because eBay doesn’t say.

The problem with only raising listings from Top-Sellers is that there are plenty of great sellers who for one reason or another are excluded from “Top-Seller” status.  Many of these sellers simply had one bad buyer who bought six items and left six “one” ratings and ruined the seller’s star rating percentage.  Others have received bogus listing violations or don’t have the required 100 transactions.  Either way, no fee discounts or preferential search standing for the great majority of sellers on eBay is not the motivation many sellers need to offer this so-called “excellent customer service” that all sellers are supposed to strive for. Many deserving sellers have been skipped over while other sellers are awarded Top-Seller status with hundreds of negative feedback and a history of shifty selling practices. When eBay ran their free shipping promotion and gave a discount to sellers who offered free shipping thousands of sellers fell in line and offered free shipping. Now that eBay has discontinued that promotion there is less motivation to offer free or even reasonable shipping.

“Unique Click-Throughs” is up next, defined as “The number of clicks on a listing from search results. Duplicate clicks are not counted.”  This is pretty straight forward but it doesn’t really tell us anything we don’t already know.  I assume that the hits on your item don’t matter much in Best Match because it’s supposedly based on sales.  Nonetheless, in case you didn’t want to click on an individual item to check the hits counter you can see those hits here too.

Next up is another percentage – “Unique Click-Through Rate.”  Is it starting to seem like some intern is trying to show off what they learned in remedial mathematics to anyone else?

“The ratio of click-throughs to the number of times the listing has been displayed to members in search results (using the midpoint of the impression range). This may indicate your listing’s appeal in search results.”  Ok…….I guess.  It may tell us something or it may not tell us something.  EBay may use this number to decide where to put your livelihood or it may not.  Thanks report!

We know the number of watchers and the number of sales.  The final “Other Factor” is “The percentage of unique click-throughs resulting in sales. This is an indicator of your item page’s effectiveness.”  We could figure this out ourselves if we wanted to by simply dividing sales and page views.  Nonetheless, the brains behind eBay have calculated it for us. All you have to is pay 15% of your revenue.

Not exactly the most helpful report I’ve ever seen.  From the looks of it, the bullets listed under “Best Match Factors” would obviously be the most important.  I’m not sure what price has to do with it since eBay couldn’t possibly figure out if what you’re selling is a “good” price or not.  Free shipping seems to still give a solid boost, but it’s unclear how much.  The sales/impressions as a major factor is interesting because it’s unclear exactly what a seller could do to improve that percentage other than sell for a loss or write nothing in the item title other than a specific model number or something. Even a specific item title will have general terms like “camera” or a common brand name like “Canon.”

So called “Top-Sellers” seem to get a serious boost in search standing.  For example, a search for “Canon EOS” results in 15 of the top 25 items from Top-Sellers.  Of those 15, nine offer free shipping.  A search for “Nintendo Wii” returns only four of the top 25 items from Top-Sellers.  Fifteen of the first 25 results offer free shipping.  Interestingly, the first item listed was item 330364763012, or “Dirt 2 (Nintendo Wii) – Codemasters – BRAND NEW.”  The item ships for $3 and there is no actual picture of the item or any original content or any mention of selling terms or conditions.  Odd search returns like this make me wonder how the eBay algorithm actually works.  Sure, the item is probably fine, but why does eBay assume that some random video game is what I’m really searching for and what is so special about this item in particular that it’s listed first?  Even stranger, Item 400075816190, or “Major Minor’s Majestic March (Wii)” was also returned on the first page.  First of all, the title does not include the “Nintendo” that I searched for.  Second, the game is used, horribly reviewed, the seller doesn’t accept returns, the listing only has 14 views, and shipping is a ridiculous $9+.  The bidder could have purchased the game brand new from Amazon for 92 cents more.  Why on earth is that item listed on the first page of search results?  It appears that eBay is currently favoring auctions based on ending time, rather than any kind of algorithm.  If you look at a page of search results you’ll notice that they’re mostly in order of ending time with a few Buy It Now listings from Top-Sellers thrown in.  It’s unclear if this will continue or if we’re simply between when the new Best Match algorithm will be implemented and the old algorithm will be phased out. Taking away a set “Raised, Standard, or Lowered” search standing may actually level the playing field for most as the great majority of sellers do not qualify to be Top-Sellers.

The goal of Best Match search is to bring the cheapest, most relevant products from the best sellers to the top of search results so buyers can have the best eBay experience possible.  Unfortunately, eBay cannot possibly figure out who the real “top” sellers are or what items buyers are actually searching for with some automated algorithm.  As evident by our bizarre “Nintendo Wii” search, eBay returns items that are not in demand from sellers with less than stellar feedback, ridiculously high shipping charges and no returns.  At this point, it doesn’t seem like eBay has made any meaningful changes to Best Match search that actually translates into a better shopping experience for the buyer. For sellers, the added confusion will simply make it more difficult to write successful listings and convert sales.  The new Visibility Report is inaccurate and unhelpful.  Overall, I am not impressed.

How It Used To Be (Sonny)

It’s rare that eBay adds a feature to its website that is purely beneficial for the seller without any monetary advantage to eBay itself.  One of those recently added features is the ability to block bidders in specific countries.  Previously, it was only possible to block bidders by entire continent.  This forced many sellers to select “Europe” as a location they ship to and then within the listing write that shipping is not available to say Russia or Italy.  Of course, many buyers, especially those that don’t understand English well, would disregard that warning and bid or purchase an item even when it explicitly states in the listing that shipping is not available.  This puts the seller in a difficult situation because technically they have to ship the item to the buyer no matter what it says in the listing or they risk negative feedback and the dreaded “Seller Non-Performance Violation.”  Ship the item and the seller risks a PayPal dispute which could result in the seller losing the item and the payment or some other form of extortion or unauthorized payment reversal.  For a while I stated in my listing that I didn’t ship to “Eastern Europe.”  Unfortunately, as I came to understand, there is no set definition for what countries comprise Eastern Europe. Because of the stigma attached to Eastern Europeans many people who live in what you and I consider “Eastern Europe” actually believe they live some place called “Middle Europe” or “South Europe.”  I was to the point where I had to list every undesirable country by name in every one of my listings. Even then, Italians still loved to buy from me. Hopefully, much of this miscommunication and misunderstanding will cease with this new ability to block certain bidders by country.

Why Block Bidders in Specific Countries?

There are a number of reasons that a seller might want to block bidders by specific country.  First of all, international shipping is much more complicated and expensive than domestic shipping. There is also much less recourse if you get ripped off by someone in Bosnia compared with someone Chicago. At the very least it’s more believable to pretend you’re in the Russian mob and threaten that you’re going to show up at their house when you’re emailing someone in Tuscaloosa instead of talking to someone who is actually in the Russian mob in Moldova.  I explain many of these international shipping problems in my article, The Perils of International Shipping With eBay and Paypal – A Guide to Successful Shipping Practices as well as how to correctly fill out customs forms at USPS, How to Print USPS International Shipping Label With Required Customs Forms .  In short, if a seller does not have online verifiable proof that an item has been delivered to the buyer then they will always lose a PayPal dispute for “Item Not Received.”  If a seller chooses to ship an item via USPS First Class, USPS Priority Mail Flat Rate, or any other method that does not show delivery then they have to trust that the buyer will be honest about receiving the item and know that the buyer could file a false dispute at any time within the 45 day filing deadline.

In the year 2009 I can’t really come out and say that all Italians or all Russians can’t be trusted and risk getting 1,000 gay porn stars sent to my house by 4chan so I won’t do that.  What I will say is that the majority of people living in Italy are absolutely nuts.  On top of that, the Italian postal system is terrible and Italian customs is one of the worst (or best depending on which side you’re on I suppose)in the world, making Italy by far the most commonly blocked country by name. The Italian postal system is so bad that at one point it was the only country in Europe that USPS Priority Mail International was not available. USPS would brave civil war, the downfall of communism, and roads made out of spikes, but wanted nothing to do with Italy.

What Countries Should I Block?

The countries you ultimately choose to ship to and the methods of shipment you offer are personal decisions based on the level of risk you’re willing to assume.  Many eBayers have never had a bad experience shipping internationally and swear by USPS First Class anywhere in the world.  All I can tell them is the fact that they’re taking on an incredible level of risk depending on what they’re shipping and to whom they’re transacting with.  If you’re on Etsy selling $5 earrings then it may not be a wise business decision to charge $25 for Express Shipping because no one would ever buy anything.  In order to conduct business, a seller like this assumes more risk, but the ultimate loss from an “Item Not Received” PayPal dispute would be much smaller than a seller on eBay who is shipping collector’s items worth hundreds of dollars in a similar fashion.  My point here is that you have to assess the risk of “fraud” in your business.  If you’re selling Christmas cards or used baby clothes then your level of risk is much lower than a seller shipping expensive high fashion items or electronics.  More sales and higher prices from offering international shipping are quickly erased by forced PayPal refunds and “lost packages.”  Never ship without tracking what you aren’t willing to lose.

The countries you choose to block should also depend on what method you use to ship. If the only service you offer is Express Mail then you have little to worry about pretty much no matter what country you ship to. Bidders intent on committing “PayPal fraud” will ignore your listings because it isn’t worth the risk of losing a dispute when there are so many other sellers offering completely untrackable methods such as USPS First Class. On the other hand, offering USPS First Class to Russia simply isn’t worth it because of the risk that the bidder will file an Item Not Received dispute with PayPal and you will not be able to fight it.

There are shysters in every country around the world and possibly more in the United States itself than any other country.  What I don’t recommend doing is letting one “rotten apple” cause you to block bidders in a particular country forever.  If you’re shipping USPS Express Mail then it should be safe to ship just about anywhere in the world other than maybe Africa or the bowels of Asia.   The other thing to keep in mind is that you don’t want bidders purchasing your items and instead of paying try to send you phishing emails with the intent of stealing your password and financial information or try to sell you counterfeit products.  These kinds of things are common in the electronics categories more than any other.  If you have ever tried to sell a Laptop on eBay then you know what I’m talking about. Blocking bidders in Africa and South America will decrease the number of bidders who buy your items and instead of paying try to hassle you.

Most of my items sell for between $30-$100 and I offer USPS Priority Mail International and USPS Express Mail International.  If you’re going to ship USPS Priority Mail Flat Rate then I suggest listing only “USPS Priority Mail International” in your listing rather than “USPS Priority Mail International Flat Rate” because this won’t tip off bidders looking to scam you that you’re going to leave yourself vulnerable to a PayPal dispute because Flat Rate International isn’t at all trackable.  If you get any bidders asking if you ship Priority Flat Rate or wanting “The cheapest shipping to Czechoslovakia” then I would either ignore it or block the bidder specifically if you really want to be careful.

I don’t ship to the following locations:

All of Africa

All of Asia except Japan

All of Middle East

All of Southeast Asia

All of Central America and Caribbean except Puerto Rico

Under North America: Bermuda, Mexico, St Pierre and Miquelon

All of South America

It’s easier to state which countries I DO ship to in Europe because there’s so many listed.  These are the countries I DO ship to in Europe:  Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Netherlands, Norway, Spain, Sweden, Switzerland, and United Kingdom

In Oceania, I only ship to: Australia, New Zealand

Blocked Bidder Exemption List

Within your listing you can also state you do make exceptions for certain bidders.   Even if you block bidders in Lithuania for example, if you want a particular bidder in Lithuania to be able bid on your items then you can add an exemption at EBay Block Bidder Exemption List.  Simply click “Add an eBay user to my Blocked Bidder/Buyer List” and copy/paste the eBay UserID.  Adding exemptions is a good way to screen bidders so you aren’t stuck sending a $500 item to a bidder in Slovenia that just registered yesterday and has purchased 37 items in one day.  When screening, remember that buyers cannot receive negative feedback so feedback alone may not be a good indicator of a buyer’s temperament.   You can read eBay’s take on buyer requirements at EBay Buyer Requirements. You can also exempt bidders who are registered in countries to which you don’t ship, but want the item shipped to a United States address. Just make sure they choose this address as the shipping address in PayPal. Only ship to the address listed in the PayPal payment. Another common scam is buyers who live abroad and choose their address abroad, but try to get the seller to ship to an alternate address. If you do not have online verifiable delivery confirmation to the address listed in the PayPal dispute then you will always lose a PayPal “Item Not Received” dispute. Be careful.

OK, OK HOW TO DO IT ALREADY

Sorry, I’m long winded, but since I don’t have any friends to talk to this is all I have. Also, eBay is incredibly complicated and covering all of our bases takes a great deal of care. If you do read the entire guide then you should pick up on things you were previously unaware of.  The process to set this up is relatively easy with the following instructions.

First, go to My eBay.  Mouse over (but don’t click) the account tab as shown and click on “Site Preferences.”

This brings us to this next screen.  Look for “Shipping Preferences” and click “Show” to expand the options.  Click “Edit” next to “Exclude Shipping Locations From Your Listings.” Sorry, I had to chop this image to fit properly on the site. You should see the “Edit” and “Show” buttons on the far right.

Now we can choose which countries we don’t want to ship to.  Clicking the box next to the continent will select all of the countries on that continent.  It may be easier to click on the continent to select all of the countries and then uncheck all the countries you do want to ship to.  If that’s confusing then go ahead and click each country you don’t want to ship to individually.  You can check the box to “Apply to all current listings” which should apply your preferences to all of your listings that do not have a bid or a prior purchase.  Note that if your auction does have a bid or a purchase then you can’t change those listings.  Also notice the disclaimer at the bottom of the page referring to setting your “global requirements.”  Simply filling out this form doesn’t do anything unless we go to buyer requirements and choose not to allow bidders in countries that we don’t ship to bid or purchase items.  We’ll do that next.  After you have selected all the countries you don’t ship to, click “Apply.”

Now we go back to step 1 by mousing over “Account” in My eBay and selecting “Site Preferences.”  This time scroll down to “Buyer Requirements” and click edit next to “Block bidders who:”

Hopefully you have been to this screen before.  If you haven’t, take a look at all of the different ways you can block undesirable bidders.  Unfortunately there is currently no way to block “crazy” bidders or bidders with 0 feedback.  For our purposes here we want to check the box next to “Block buyers who are registered in countries to which I don’t ship.”  Check the “Apply” box at the bottom and then check “Submit.”

Congratulations, you should never have to deal with another Italian again.

Over the last week, reports have been pouring in from users complaining that eBay isn’t displaying their gallery pictures properly in search results.  When this happens, eBay dispatches an email with the subject “There’s an issue with your gallery picture” and the body of the email reads,

“Hi, josh@auctioncope.com,

There was an issue generating the Gallery picture for your listing: Listing Title (#AuctionNumber)

Why it didn’t work:
We were unable to identify the exact problem with:
http://i.ebayimg.com/13/!*

Here’s how to fix it:
Please contact customer support at support@ebay.com for more information about your Gallery picture.
You can resubmit or change your Gallery picture by clicking the following eBay page link or by copying or typing the link text into the Address box in a browser window:
http://cgi5.ebay.com/ws1/eBayISAPI.dll?DisplayGalleryImagePageV3&Item=ItemNumber

This is an automatically generated email,so we won’t receive any replies sent to this address.”

As usual, I assumed this was a cleverly created phishing email hoping I would click one of the links and enter my login information.  I logged into eBay and the gallery image was correctly displayed in “My eBay,” but when I clicked on my feedback and “View Items for Sale,” the gallery pictures were missing as indicated by the email.  The odd thing is that I listed three items consecutively with the exact same gallery picture using the “sell similar” button and changed nothing but the size in the title and item specifics. The first and the third listings had missing gallery photos, but the second listing’s gallery picture displayed properly.  When I was listing the item there was no upload error or any indication there was a problem with the listing.

To fix the problem, I clicked into the listing and then to “revise item” and reuploaded the gallery picture.  I then went back to check to see if it was displaying properly and it was still missing in search results.  At this point, I didn’t want to waste any more listing revision credits because of the brand name in the title so I gave up and waited to see if it was some kind of glitch that would resolve itself.  I checked back several hours later and the gallery image was displayed correctly and the issue was resolved. The gallery picture on the item that I did not revise was still missing which meant that eBay had not fixed the problem automatically.

Alternately, you can safely click the link eBay sends you which will take you to this screen with the item number filled in:

Clicking next will bring you to this screen:

The image you uploaded should be visible on the top with a blank image under “Review new gallery picture.”  Click “Create” and it should then show the newly created gallery picture in the box that was previously blank.  Click “Done” and your image should now be properly displayed in search results.  The good news is that doing it this way immediately makes the gallery picture visible in search so there is no delay like there was doing it manually.  Also, this process can be completed even after there are bids on the item. It also appears that this does not count towards your brand name listing quota, but that isn’t guaranteed at this point.

There is currently no notice on eBay’s System Announcement Board about this problem. It is unclear exactly what the problem is, how prevalent it is, or how long it will last. In my five years on eBay I have never encountered an issue like this where there was a problem with a listing that eBay didn’t automatically catch before submission and then sent an email to correct afterwards. It is interesting that eBay has the image ready when the link in the email is clicked, but they do not automatically “create” the gallery picture for you and correct the problem themselves. It seems like the issue could be resolved automatically on their end since they are aware of the problem and an easy one button fix is available.

If eBay acknowledges the problem I will update this post with their explanation.

Is It A Mistake Or On Purpose?

First, take a look at the item you received.  If you purchased a $500 pair of Dior jawnz and received two old magazines, then there is a strong possibility that the seller is intentionally trying to rip you off.  Look up the seller on eBay and check their feedback for any recent negatives indicating problems similar to yours.  Check to see if the seller has any items currently listed for sale and whether or not their selling behavior is normal (if the seller has thousands of feedback then the seller should have some items for sale.  If the seller has 72 feedback and rarely sells then it shouldn’t be a surprise that there aren’t any items available).  If the seller does not have any items for sale or has recently received a number of negatives for problems like non-delivery and item not as described then you will want to skip straight to part three of this series – filing a PayPal dispute.  If a seller decides to give up on eBay or eBay has decided to give up on the seller, many times they will attempt to rip as many people off as possible and disappear.  This is one of the reasons why purchasing on eBay is so unsafe.  It’s impossible to know who you’re transacting with and past behavior isn’t necessarily an indication of what kind of service you will receive on any particular transaction.  If you’re returning an item because it doesn’t fit, it isn’t what you expected,or if it seems like it was an honest mistake by the seller then read on (if you want, I can’t force your hand).

Benefits of Working the Problem Out With the Seller Directly

On several occasions I have plugged the PayPal dispute as the consummate means to a refund.  Ideally, buyers should try to contact the seller for an amicable resolution first and use PayPal as a last resort.  First, smart communication with most sellers will result in a quicker resolution than a PayPal dispute.  Most PayPal disputes will take at least 15 days to resolve and can easily take more than 40.  Dealing with the seller directly can resolve all problems as quickly as you can get the returned item to the seller.  Your PayPal dispute may also take at least one phone call to PayPal which can mean an hour plus on hold.   A PayPal dispute can be a serious hassle that is ultimately unnecessary in most instances.  Second, opening PayPal disputes rub many sellers the wrong way.  If you open a dispute without contacting the seller about resolving the problem first, they may intentionally try to make it as difficult as possible to receive a refund.  I will go over the various tactics sellers can employ in part three.  Third, it is always possible that PayPal will deny your refund request when the seller would have gladly accepted a return had you simply asked.  This is also unlikely, but anything is possible when dealing with PayPal.

Making First Contact

Try to keep communication through eBay’s message forwarding system.  Although the messages between you and the seller ultimately are of little value, any emails you receive directly from the seller’s email account will have zero value as eBay and PayPal will tell you that they are unable to verify the authenticity of the emails or that emails are “personal correspondence” eBayisn’t interested in  (i.e. there is no proof the seller actually sent the email).  I say this correspondence is of little value because no one at eBay/PayPal is going to sit and wade through a bunch of emails full of threats and insults and try to figure out what was decided.  The only correspondence that will matter to PayPal/eBay is inside of the PayPal dispute, if it comes to that, but even PayPal disputes are generally decided by a computer system unless multiple phone calls are made.

Write your messages to the seller in a positive tone, especially the first few.  There is no reason to threaten the seller by saying you will be “contacting eBay and PayPal.”  When a buyer threatens to “contact eBay” right off the bat I know that they have no idea what they’re talking about or how the dispute/refund process works.  There is really no one at eBay to “contact” about a problem.  EBay Live chat is completely worthless in a situation like this because they have no authority to do anything other than link you to a form that will email Trust and Safety.   No one a buyer could get on the telephone at eBay’s 1-800 number would be able to offer any assistance other than eBay’s official line either.  A buyer dispute in eBay’s own dispute resolution console has historically been of little value as well.  As eBay becomes increasingly concerned with buyer dissatisfaction rates, that is beginning to change.  Beginning in August, PayPal will institute a policy update stating that if eBay decides the buyer is owed a refund then eBay will take the money out of the seller’s PayPal account in order to reimburse the buyer.  Sellers can still opt out of this requirement by dialing 1-866-643-3727, making eBay dispute resolution a poor choice unless the payment was made using a service other than PayPal.

The point here is to try to be nice and not say anything that makes it sound like you don’t know what you’re doing.  Sellers are much more likely to be lenient and forthcoming with someone who is pleasant and appears to know what they’re talking about.  It’s difficult to give general advice about how to approach a return because every seller operates differently and every problem is different.  In general, for your first email, I suggest writing something like this:

The Message

“Hello, thank you for shipping the item in a timely manner.  Unfortunately ___________ (enter problem with item clearly.  Depending on the problem you can say something like “I’m sure you were unaware when you shipped the item, but…” or something similar).  I would like to return the item for a refund.  Please forward me the address I should ship the item to.   I will ship the item back to you with Delivery Confirmation as soon as I hear back.  Thanks so much, _____ (enter your name/eBay UserID).

Don’t assess blame or get overly dramatic.  Give the seller a chance to do the right thing and agree to an easy return.  If you receive a nice email from the seller, skip down to the “Return Shipping” section below.  If you do not receive a response after 48 hours or the seller refuses to accept the return you should take a more stern tone.  Keep it professional, don’t use foul language, and don’t say anything that you can’t follow through with.  I recommend an email similar to the following:

“Hello, this is my second email regarding the refund for ______ (insert item).  I would like to return it because _______ (insert reason).  If I do not hear back that I can return the item, I will be opening an Item Not Described dispute with PayPal and leave 1 star negative feedback stating my dissatisfaction with this transaction.  Please reply to this message with the address that the item should be shipped to.  If I receive a response that the refund will be easily processed I will not open the dispute and I will not leave feedback.  I will return the item with Delivery Confirmation as soon as I hear back.”

Most sellers that know what they’re doing will bend to the buyer’s will at this point.  As sellers, we are scared to death of negative feedback and most sellers are aware that a PayPal dispute will result in a refund for the buyer eventually anyway.  An email similar to this lets the seller know that you mean business and it will be much easier for them to accept the return outside of a PayPal dispute.  If you receive an email to your satisfaction indicating that a refund will occur, skip to the “Return shipping” section below.  If you still do not receive a response after 48 hours or the seller is still uncooperative, send an email similar to the following:

“Hello, this is my third and final message about the return of ________ (insert item).  If I do not hear back from you today that the return will be processed, I will be opening a PayPal dispute.  PayPal will decide the dispute in my favor and instruct me to return the item to you for a refund anyway.  It will be much easier for both of us if you accept the return and forward your address to me now.  I look forward to resolving this problem amicably without the need for a dispute and negative feedback.”

If you did not hear back after the second email it is unlikely you will receive a response to this email unless the seller hasn’t checked their email/messages.  Wait a few hours for a response anyway and skip to part three of this series, “How to Open and Win a PayPal Dispute.”

How To Ship the Item to the Seller

This is probably the most important part of the return process and the most often overlooked by buyers.  Luckily, it’s also one of the easiest to do properly.  If the total transaction price of the item/shipping was under $250 you need Delivery Confirmation or equivalent tracking showing delivery to the seller’s city/state or Zip Code.  If the price was $250 or more then you need Signature Confirmation or equivalent signature/tracking showing delivery to the seller’s exact address including house and street number.  The easiest/most cost efficient way to ship most items is usually USPS Priority Mail because the packaging is free from the Post Office, Delivery Confirmation is free when the label is printed online, and your regular Postal worker will pick the item up from your doorstep for free as well.  If the item is heavier or you want to be able to track the item more closely than USPS then FedEx or UPS may be a cheaper option.  I have plenty of shipping advice available at Guide Roundup – How to Ship on eBay and Paypal .

I can’t overemphasize the necessity of a Delivery Confirmation/equivalent tracking number.  If you don’t have this information it is as if you didn’t ship the item.  The seller can deny they received the item and if it goes to a PayPal dispute you will not have the tracking number that is required for PayPal to decide a claim in your favor.  Basically, if you don’t have a tracking number and the seller says they didn’t receive the item then you will not receive a refund from the seller and PayPal will side with the seller and not issue a refund either.  If you paid with a credit card you might win a chargeback case, but there really isn’t any reason to risk it.  Get tracking.

Getting A Little Shady

Although it may not seem obvious to the untrained eye, I struggle internally with exactly what I’m willing to make public as most of the information I write about isn’t necessarily in my best interest to publish.  Not that a lot of this stuff is earth shattering or anything, but I am not aware of another “blog” where someone with my experience is writing in-depth guides about how to list/ship on eBay for free.  Luckily we’re friends, so my knowledge is your knowledge.

Anyway, if you returned the original item to the seller without tracking and the seller denies they received it you can send an additional envelope to the seller with Delivery Confirmation that will confirm delivery.  PayPal has no way of verifying that the tracking number you provide to PayPal for the package actually had the item in it.  I don’t necessarily advocate doing this, but if you’re certain the seller received the return and is purposefully trying to keep the returned item and the payment then it is a viable option.  The seller may report you to PayPal for returning an empty envelope, but it’s unlikely there will be any negative repercussions for one complaint.

This is one of the fundamental flaws of eBay and PayPal in general and one that there really is no answer.  As a seller, if a buyer returns an empty box or an item of much less value in place of the item that was originally shipped, it takes at least six calls to PayPal for any chance of a positive resolution.  It’s the same scenario if the buyer receives an empty box in place of the item purchased.  PayPal usually requires the buyer/seller to ship whatever item they claim they received to PayPal for one reason or another.  I assume PayPal wants something to show for the refund they may be forced issue and it makes their Christmas gift exchange more exciting with all the counterfeits and beat up items they’ve revived during the year.

Requesting a Refund for Return Shipping

At the moment, PayPal requires the buyer to pay for return shipping unless the buyer can work something out with the seller.  At some point, the eBay Resolution Center is going to take over the dispute process for all eBay transactions, even when PayPal is the payment processor.  EBay’s new “Purchase Protection Policy” for buyers promises to refund the buyer’s return shipping costs in certain instances.  Since this hasn’t happened yet, it’s impossible to know how these new policies will actually be implemented and which transactions buyers will be refunded out of eBay’s own pocket. 

The best way to receive a refund for return shipping costs is to ask.  You might expect a refund if the wrong item was shipped, the item was broken on arrival, or another problem that is entirely the seller’s fault.  If you are returning an item because it doesn’t fit or for some other reason that isn’t the seller’s fault then the buyer should expect to pay return shipping.  I would recommend asking if you will be reimbursed for return shipping after the seller agrees to accept the return, in the second or third email to the seller.  If you start out making demands in the first email then the seller will be less likely to want to work with you.  As sellers, one of our least favorite things to do is pay for return shipping because it’s a substantial loss for us, so getting a seller to happily agree to refund can be tricky.

If the seller refuses to refund return shipping initially, and you believe you are due a refund because the problem is completely the seller’s fault, I recommend waiting until you receive a refund for the initial payment before playing hardball on the return shipping refund.  If the item cost $100, then it is a lot more important to get that initial $100 back quickly and easily than argue and fight over an additional $7 refund.  After you receive the refund for the initial payment, tell the seller again that you believe you are owed a refund for return shipping because the problem was the seller’s fault.  If the seller still ignores or refuses, say something like:

“Hello, I had to pay ___ (insert amount) for shipping to return an item to you because _____ (state defect that is seller’s fault).  This has left me dissatisfied with this transaction and I will be leaving negative feedback explaining the problem to future buyers.  Please refund my return shipping cost to my PayPal account (insert payment address) and I will not leave feedback for this transaction.  Thank you, (insert UserID)

You have to word this message carefully so it’s not considered “feedback extortion” which is against eBay policy.  It might be best to send this kind of email directly to the seller’s email account so eBay won’t take action.   If you don’t hear back or receive a refund in 48 hours go ahead and leave negative feedback.  Some sellers will refund your shipping cost if you agree to a feedback revisionat this point.  If you still are refused a refund then there is little you can do.  The seller may wise up in the future or send an angry email at which point you can link them to feedback revision and tell them you will revise your feedback to a 5 star positive if the seller agrees to refund return shipping costs.

Conclusion

Returning items on eBay can be super simple or excruciatingly difficult depending on how the return is approached and the nature of the seller.  Most transactions on eBay are completed without incident, but when there is a problem it usually has to do with the buyer returning the item improperly or the seller not refunding promptly, if at all.  This is a long “guide,” but if I can save you $100 now and $1000 in the future then reading it is time well spent. Plus, if you made it this far it’s pretty clear you don’t have anything better to do anyway, (Bigret).

If you have a specific question regarding returns or anything else you’re welcome to email me using my email in the “About Me” above or leave a comment. When I’m not depressed about the lack of visitors to this site I check it.

A guide on returning an eBay item might seem a bit mundane.  Unfortunately, returning an item and actually receiving a refund can be a complicated process that often leaves the buyer without the item they purchased and without their money back.  My third favorite eBay “joke” is, “I accept returns, but don’t offer refunds.”  If you were to ask around about people’s experiences on eBay, you’ll find that many (probably all) people will report being “ripped off” at some point.  The most common rip off tactic on eBay is sellers who receive returns but never process a refund.  This is a relatively easy scam for sellers to pull off because Paypal requires proof that the buyer returned the item and the seller received it.  If the buyer does not have this proof, in the form of a verifiable online Delivery Confirmation or equivalent tracking number, the seller is not obligated to refund the buyer.  This is because the buyer has no proof that they returned the item.  This guide will explain how to return an eBay item and actually receive a full refund.  Many times buyers can also receive a refund for their return shipping as well.

Return and Refund Eligibility as Stated in eBay Listing

It is now required that all sellers include a “return policy” in their listing.  This can be found by clicking the “Shipping and payments” button on the item page and scrolling down to the bottom.   

Make sure to read this policy prior to purchase as it obviously varies from seller to seller and even item to item from the same seller.  The good news is that even if the seller says they don’t accept returns it is still possible to force a return by opening a “Item Not as Described” Paypal dispute.  I will cover that process in part three of this series.

Is Returning the Item Worth It?

Consider the amount paid for the item and whether or not it will be worth the potential hassle of returning it.  It is official eBay/Paypal policy that the buyer is always responsible for return shipping unless an agreement can be reached for the seller to reimburse the buyer for the cost of shipping.  Shipping two pounds Priority Mail across country with Delivery Confirmation is around $9.  I’ll explain techniques that will help convince sellers to reimburse shipping costs in part two of this series.  Depending on the issue with the item, the seller may also deduct the original shipping cost from the refund.  If the item included “free shipping,” the seller may deduct the actual cost of shipping from the refund.  Returning an item can quickly add up to $20 or more ($10 original shipping and $10 return shipping for example) and the buyer will have nothing to show for it.

In addition to shipping costs, some sellers charge a “restocking fee.”  Many stores, like Best Buy and Target, charge restocking fees for open merchandise or electronics in an attempt to minimize returns.  Restocking fees aren’t prevalent on eBay, but some sellers do advertise and charge them.  It is actually against eBay policy to charge a restocking fee as a percentage of the price of the item.  For example, sellers are not allowed to charge a 15% or 20% restocking fee.  This doesn’t stop sellers from continuing to charge restocking fees in this manner.  In fact, several of the top sellers in the United States continue to try to charge restocking fees as a percentage of the sale.  Sellers are allowed to charge a set restocking fee, like $5 per item for example.  Take this into consideration when deciding if a return is worthwhile.

I Shouldn’t Tell You This

I get into a lot of trouble for recommending buyers open Paypal disputes.  It isn’t in my best interest to tell anyone this, but since we’re friends and no one really reads this “auction blog” anyway, I might as well.  No matter what a seller’s terms are, a buyer can always receive a full refund including the original shipping charge by opening and winning a Paypal dispute.  Even if the seller’s return policy states “no returns,” lists a restocking fee, or the seller otherwise tries to deny the return, a correctly filed Paypal dispute will always result in a full refund of the entire payment.   Once a Paypal dispute is initiated, Paypal will most likely hold the entire payment until the dispute is closed.  Paypal does this so the seller is unable to withdraw the funds and disappear.  In addition, in order to file a credit card chargeback, Paypal requires the buyer to go through Paypal Dispute Resolution first.  I’ll be going over the various kinds of Paypal disputes in depth in part three of this series.

In part two of this (riveting) series, I will explain how to contact the seller to organize a return and go over the  shipping requirements necessary to guarantee a refund will take place.

What Are Rolling Reserves?

Back in June on Paypal’s own blog, The Paypal Blog Paypal introduced a new policy called “seller reserves.”  In short, Paypal is requiring account holders to keep a percentage of their revenue in their account for 60 days before they will be allowed to withdraw it.  This money will be used to cover what many fear will be an onslaught of fraudulent disputes and chargebacks by buyers who use loopholes in the system to scam sellers.  This new policy overlaps with other Paypal policies that hold sellers’ money, including the 21-Day Payment Hold and $500 Monthly Withdrawal Limit.

Why Has Paypal Instituted This Policy?

Paypal is in a vulnerable position.  Just as there are buyers who set out to rip off sellers, there are sellers who set out to rip off buyers and ultimately eBay and Paypal are stuck with the bill.  Without going in to too much detail about how this might be done, it is fairly easy to set up an eBay and Paypal account, sell a number of items, withdraw the money, and disappear.  Even sellers who have been “legitimate” for years are liable to rip off buyers and disappear.  The most famous case is a seller in Australia who ripped off buyers to the tune of several hundred thousand dollars which Paypal was finally forced to refund out of their own pocket, One of Many Paypal Australia Debacles.  Paypal is taking on considerable risk as a payment processor and is continuing to figure out ways to mitigate that risk. Unfortunately, risk mitigation for Paypal means lost revenue for sellers.

Paypal doesn’t collect enough information during signup to properly identify who is actually using the service.  This is because they don’t want to scare off any potential users by requiring a Social Security number, utility bill scan, credit card scan, supplier invoices, etc. on signup.  This is why they hit sellers with the Paypal Limitation after a certain amount of transactions or revenue.  Paypal gets nervous and wants to know who is actually using the account.  When the account holder is unable or unwilling to complete the steps to remove the limitation, Paypal holds the funds in the seller’s account for 180 days happily collecting interest on all money held.

The second reason Paypal is instituting this policy is because they will have the opportunity to earn interest on the money that is held.  Imagine if at any time you could take hold of a hundred million dollars and earn interest on it.  You would be foolish not to take advantage of that wouldn’t you?  With eBay’s declining stock price and worsening platform outlook, eBay needs all the money they can get.

Who is Affected By This Policy?

This is a difficult question to answer because Paypal will never admit how many people are affected or how they decide who will be slapped with a reserve.  There is a reason there’s no “Paypal” in “transparency.”  On June 9^th, Paypal announced that the number of accounts that were affected by seller reserves was “currently less than 1%.”  Since this was a new policy, it’s perfectly possible that the current number was less than 1%.  At the same time, Paypal advertises on their own website that there are more than 70 million account holders worldwide.  One percent of 70 million is still 700,000 accounts affected at the time of the policy announcement and that number is only increasing.  Since this is a relatively new policy it is difficult to ascertain who is being targeted.  There are many reports around the internet and on eBay’s own message board from sellers who say they have been hit with a reserve but have never received a credit card chargeback.  In addition, small and large sellers alike are reporting that they have received the following email.

What’s Happening July 23, 2009?

The major reserve rollout is coming on July 23.  Paypal sent out an email on June 23, 2009 informing account holders who would face a rolling reserve 30 days later stating:

“An important change to your PayPal account

If you are a PayPal Money Market Fund customer, you will still earn interest on your total balance while your money is in reserve. Click here for more information or to enroll in the PayPal Money Market Fund.

PayPal”

When I first received this email from paypal@paypal.com I thought it was one of the cleverest phishing emails I’ve received.  The most glaring issue with the email is that their math is wrong.  Ten percent of $2,000 is $200, not $400.  Second, “accessorie” is spelled wrong.  I also didn’t recognize the phone number on the bottom and it isn’t in Paypal’s M.O. to offer phone assistance in the first place.    When I searched for the number, I came up with Paypal’s own website stating the same thing that’s in the email including the phone number.

Why Is This Policy Alienating The Few Honest Sellers Remaining on eBay?

First, people don’t trust Paypal to actually release their money.  Second, the average profit on an eBay item after fees, shipping, etc. is generally less than ten percent in the first place.  The fact that Paypal is holding ten percent for 60 days means sellers will not have access to their profits for two months.  Imagine if you get hit with a rolling reserve on October 15 and don’t have access to your money for the entire holiday season.  Third, the only way to earn interest on the money held in the rolling reserve is to give Paypal your Social Security number and allow them to invest your money without FDIC insurance, regulation, or oversight.  The current Money Market Rate is a paltry 0.08%, less than most checking accounts.   Paypal reaps the rewards while sellers continue to assume all the risk.  If a seller chooses not to enroll in the money market fund, they receive no return on their money and Paypal will still earn interest on the money by investing in certificates of deposit, bonds, treasury bills, or whatever else they want to do.

What Can I Do To Lessen the Chance My Account Will Have Rolling Reserves?

At this point it’s difficult to say.  Many of the techniques I write about I have been practicing myself for several years.  New policies are a different bag altogether, but I have some general advice from what I’ve picked up on thus far.  First, always add tracking/delivery confirmation numbers as quickly after receiving payment as possible.  If you print labels with Paypal, print them at least once per day.  Even if you aren’t going to ship the item until the funds clear to your checking account, make sure you print the labels because it tells Paypal that you are on top of your sales and actively ship items.  Second, I suggest leaving a reasonable amount of money in your Paypal account.  There are many detractors to this advice who will tell you that leaving any balance in your Paypal account is crazy because of the chances that Paypal will freeze or reverse the payment. The bottom line is that if a payment does get reversed and you don’t have the funds in your account Paypal will go after those funds with all they’ve got. This is the real reason they collect your Social Security number – not to run a credit check but to impact your credit negatively should you ever “owe” them money.  In essence, you are creating a rolling reserve by choice.  The benefit is that you will have the ability to withdraw the money if absolutely necessary and Paypal is less likely to hit your account with a $5,000 minimum reserve plus ten percent of sales like some people are receiving.  Paypal’s fraud management system is as complex as any computer system on the planet.  If you make Paypal nervous they are more likely to limit your account and institute a rolling reserve.  Many sellers are reporting that they are being hit with rolling reserves even though they have never received a chargeback and have few disputes.  The truth is that their actions make Paypal wary and when Paypal is wary they take your money and hold it for as long as they can.

As I’ve said before, limiting disputes is also imperative.  Paypal calculates a “reversal percentage” which is the number of disputes/claims/chargebacks compared to the total transactions you have completed.  For example, if you’ve had 100 transactions and 3 of them end up in the Resolution Center as disputes then your reversal percentage is three percent.  Once you hit a specific percentage, the computer will tell Paypal to review the account and they will then issue a limitation on the account telling you that you have to resolve all complaints before you can withdraw any money.  This means you will have to refund every single person that has a dispute before you can access your funds.

Paypal is telling buyers to return items to the seller for a refund in almost all dispute scenarios.  With this in mind, if a buyer has a problem and it seems like they’re serious about it, deal with it outside of Paypal by telling the buyer to return the item for a refund.  The benefit of dealing with it outside of Paypal is that you may also be able to keep the original shipping charge and charge restocking fee.  If the buyer takes it to Paypal via a dispute you will be forced to refund the entire payment including shipping paid by the buyer, no matter what previous arrangement you made with the buyer to pay the original shipping.

Conclusion

Rolling reserves is just another policy in Paypal’s ever expanding arsenal to part people from their money for as long as possible.  I think we can all understand where Paypal is coming from, but it is unfortunate that honest people have to pay for the misdeeds of others.  The bottom line is that this will be another successful policy for Paypal. Those of us who have been swearing off eBay for a while now will continue to use it and try to cope with the plethora of changes so many of us find detrimental. Time will tell how this roll out affects the marketplace and I will be doing follow up articles outlining the effects and any new coping mechanisms that come to light.

I have written a bit on pricing strategies, fee structures, and “Best Match” search placement, but thought I would take this opportunity to make sure we all understand how multiple quantity Fixed Price listings work on eBay.

Fixed Price Multiple Quantity listings are some of the easiest to create and most profitable on eBay.  They’re easy because you only have to create one listing for many items and they’re potentially more profitable because you can choose what price to sell the item.  If you have more than one of the same item, it may be beneficial to create a fixed price listing with more than one item available to buyers.  In about a week, it will be possible for sellers to create listings where the buyer can choose the color and size of the item within the listing in Men’s and Women’s shoes.  In July, it will be possible to add this feature to other applicable categories in clothing and accessories.  This means sellers will be able to consolidate listings where they offer many different colors and sizes into just one listing. It should also cut down on the time it takes sellers to manually figure out what a particular customer wants.

A lot of sellers may continue to list numerous Fixed Price listings with different sizes and colors.  For example, many sellers still choose to list the same pair of Nike shoes in every single possible size and color as a separate listing.  This isn’t necessarily the best approach.  It may make the listings more obvious to buyers due to the sheer volume, but there is no guarantee that the buyer will even search through listings long enough to find them.  With eBay’s default “Best Match Search,” Fixed Price listings with sales are heavily favored in search results.  If a listing has two or three sales, it will show up in a buyer’s search results long before any Fixed Price listing without any sales.  If a buyer searches for “Nike Shoes” and you have a listing with several previous sales, free shipping, and good Detailed Seller Ratings, then chances are your item will show up in the top 10 search results, virtually guaranteeing that your item will be seen by every single buyer who searches for Nikes.  For now, you will have to make a note in your listing that it is impossible to choose the size within eBay and that the buyer should email you what size they want or include it in their Paypal note when they submit payment.  If your listing ends or you sell out of the quantity you had listed, it is still possible to take advantage of the increased search result placement you’ve earned if you relist the item without changing anything in the description or raising the price.  This is a strict policy.  If you change anything at all in the description you will lose your search placement.  EBay has this policy because it would be easy for a seller to sell a bunch of a $1 items, get high search placement, and then change the listing entirely to sell Nintendo Wii’s or a fraudulent item.  To take advantage of your raised search placement, I recommend simply clicking “relist” without making any changes to make sure your search placement is intact.

If you’re unsure of how to price your item, consider checking out my pricing strategies guide linked above.  I will mention here that it may be beneficial to accept the first few offers on your item that net a small profit, even if the prices aren’t as good as you’d like for future sales.  This will raise your search standing and make your item seem more appealing to buyers.  The first sale is always the hardest.  Once you sell one, future buyers will see that they aren’t the only one interested in the item at that price.  The downside is that buyers can check your feedback to see what prices previous buyers have paid and make offers accordingly.  The good news is that few buyers are that smart and you should be able to counteroffer a better price that the buyer will accept. You can also continually relist a Fixed Price listing with only one quantity, but you won’t take advantage of buyers who see that multiple units have already been purchased.

My recommendation is to create one account for Fixed Price listings and another account for auctions.  Separating the accounts will make it less likely that your Fixed Price listings will put a ceiling on the auction prices.  If you run auctions alongside Fixed Price listings, your auctions will rarely sell for more than the Fixed Price item price because most buyers will realize that they could just buy the item from the Fixed Price listing.  Since most buyers on eBay are looking for a “deal” it will be harder to get higher prices at auction because bidding a higher amount on the auction seems like less of a deal compared when compared to the Fixed Price listing, even if it still a great deal compared to retail or what they could buy the item for from another vendor.

Visibility is one of the most important aspects of being successful on eBay or any other platform.  Utilizing Fixed Price Multiple Quantity listings can increase your search visibility and lead to more sales at higher prices if used correctly.