Charge Back Fraud

[themartinlady]

Buyers are allowed to initiate a charge back from their bank and not exactly through ebay.

This is a terrible loop hole.

We as sellers have no leverage or recourse. We are at the mercy of the bank who will protect their customer even though that customer is committing fraud.

The banks SUCK.

Ebay better figure out a way to protect the sellers.

I already took a break selling because I worried about the charge backs. Now it happened right off the bat.

I just spoke to ebay and they basically said there is nothing they can do and that this goes on everywhere. Anyone can dispute with any entity. Stores, cable companies, phone companies, etc. It is a terrible loop hole that the thieves exploit and the bank back up and the vendor (whoever it is) gets completely hosed.

Ebay really better figure out a way to protect the sellers or there will not be anyone willing to get sell and get screwed.

[retro_entertainment_collectibles]

Anyone who's had a merchant account knows about chargebacks and in general how processing and disputes occur albeit there are variances depending on where the institutions involved reside internationally.

Chargebacks are ALWAYS filed through the cardholders credit institution be that a bank or other financial institution offering cards.  Those institutions are compliant with the card franchise rules and/or international variances *EVEN* if said CB is filed through an aggregate point of sale.  Even if a chargeback is lost most card franchises allow for the cardholder to issue another dispute of that same charge.

Now some services such as PayPal which I believe was associate with the Deutshe Bank mediated disputes and presumably did so under a terms of service agreement between seller/buyer agreeing that they mediate.

Now eBay's back end aggregate processor Ayden is in the Netherlands with offices all over the world, they are a large card processor and then some.  It's highly unlikely any aggregate processor in the USA would support any such marketplace, Wells Fargo, Card Service or Chase etc due to qualification needs per merchant and then some.

Traditionally a chargeback notification if a seller has a merchant account comes by eMail and registered snail mail.  The moment one is filed funds in the vendors bank where Automated Clearing House deposits (ACH) are sent (a two to three business day process) has whatever the amount placed on hold and a $25 fee is assessed by the vendors bank.  Another $25 fee is also assessed by the merchant account provider.

Some card processors like say Card Service International who ARE NOT a bank but DO provide both merchant accounts and are a card processing aggregate have online dispute management.  Others require a vendor who wants dispute the chargeback to require written dispute the latter usually having a $25 fee for every written communication, the latter tends not to.  So a chargeback via Card Service International will cost $50 right off the bat but no fee's in defending against the chargeback.  Other's such as EMS systems back in the day, every required written defense mailing, $25 more.  The amount of the actual charge is immaterial, it could be $1 and still the vendor will be assessed at a minimum $50 in fee's.

Once upon a time ANYTHING sent via US PS Mail could loose a chargeback simply because there was no way to be 100% sure the mail carrier delivered the package.   A tracking lookup would show delivery to a zipcode and STILL does not show the formal address BUT the USPS now has geo-location services.  Internationally surely problems still exist with solid proofs of delivery depending on nations.

As you can see, traditional merchant account the stakeholders make money on disputes.  One might say the stakeholders (banks, processors, merchant account providers) make money coming and going.

Most third party online sellers will not qualify for a merchant account for a variety of reasons far beyond explaining in a forum post. This is why before eBay worked with PayPal or even Amazon with third party merchants one accepted checks, money orders, cash or had the ability to process cards independently from the point of sale.  Other online entities such as Onsale, iDeal Networks, Auction World or uBid basically consigned merchandise even if the seller performed fulfillment.  They'd do the charging through their merchant account provider(s) and issue bank checks to the vendors on a schedule, usually bi-weekly.

With the advent of Paypal new ways came to be but again, you'll notice it was off US shores.  Amazon created its own card processing arm as has Walmart in large part due to fees.  Card processing depending on the card franchise ranges 2.3-4% basically from word go which is called "The Discount Rate" or "TDR".  Every transaction is assessed that processing fee plus .25 - .50 cents nominally depending on the merchant account provider.  Chargebacks lost can result in a higher TDR being assessed to the vendor or loss of access to processing in whole.

Now eBay has nothing to do with the any of the above, they are simply provisioning a service aggregating folks buying and selling things hence being "A Venue" unlike Amazon whom is in fact BOTH a merchant and a Venue for third party sellers.

Now in processing with say Card Service or Wells Fargo mail/phone/online orders also has whats deemed "AVS", Address Validation System.  One can set one's software or if using an online gateway to accept or reject a charge based on AVS results and extra percentile fee's are assessed based on that per transaction.  So, say you process a card an AVS fails completely the charge can or cannot be captured based on you're settings preferences.  There's address, Zip, Zip+4, Zip+5 on and on.  This is why many a point of sale likes to say, "Please enter you're billing address EXACTLY as it appears on you're statements!"

Something simple as "1234 Wolf Hollow Road" entered by a buyer as "1234 WolfHollow" will fail the AVS address and the seller get's pay little more.  OR!  One can pay the Postal Service quarterly for DVD ROMS (eggspensive!) and try integrate via automation or do so manually to get proper addressing for AVS.

So...  I could enter a card submitted as "Mickey Mouse" at 1234 Wolfhollow in Liverpool NY, Zipcode 72337 and lets say thats ALL inaccurate, 100% as long as the card number is valid, the CVS Code is valid and I've setting on "Capture All" the charge will go through!  Now if the card happens to be stolen, welp, a dispute going to be coming and I'm gonna pay out a minimum of $50 atop the charge amount.

So here's the thing, I could go on...  BUT eBay sitting as the VENUE is ACTUALLY protecting sellers far far far far more than sellers care realize UNLESS those sellers have had their own merchant accounts selling online/phone/mail order.  I mean its so night and day its not even up for discussion.

THE PROBLEM is multifold.  Credit and Debit cards are not the same first off. Credit cards afford more consumer protection and some like say American Express PRIDE themselves on that.   They've also stricter qualifications for vendors who care accept Amex and a discount rate that starts 3.5% or more.

Banks and card franchises have risk assessment towards consumers in a plethora's of ways and credit verses debit tend be rather segregated since one's a loan and the other not.  A person has to be pretty much a chronic hoser to not be able to get a bank debit card more or less a prepay.  Credit Card, different and again its a BIG WORLD and cards are allllll overrrrr it.  Can have someone from Bolivia here in the US on a temporary Visa visiting friends and welp, crop shop whilst here.   All these computers and electronics as well as "disconnected" points of sale and even real people have no idea what's going albeit the seller is, "Somethings going on!"

There is no ONE SOLUTION FITS ALL for every possibility and it's been that way.  Now all that said my ex decided to remedy some of it.  She came up with a way that basically handshake transactions.  However when she presented it to Visa/MC they dismissed it just like that.  They dismissed it because they make money coming and going.  It was by no means every circumstance but basically buyer buys and then has to verify with their bank via a code sent that they THE CARDHOLDER confirm the order.  Do that online, in person w/ bank, any ATM etc.  Nope, no go!  LOL.

So... In summary, YES eBay protects sellers as best as they CAN within circumstance AND eBay monitors buyer practices and conduct.  Atop that they provide through they're arrangements with the card processor the ability for any of us to accept payment AND even a level of protection AND not getting swacked (and I do mean swacked!) with fee's when chargebacks occur be they valid or invalid.  Again, no idea how HUGE A POSITIVE that is compared to having one's own merchant account.

Now all that said, might be an interesting concept for eBay and Ayden to create such a mechanism strictly for eBay whereby that handshake exists as it could cut down on some issues but then of course sellers be yealling, "How come the buyer hasn't validated the order yet!  It's been two days!"

[gurlcat]

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@asset_liquidators wrote:

"When the buyer files for INAD with a credit card, chances of winning are slim".

That should read,  'When the buyer files for INAD with a credit card, chances of winning on EBAY are slim'.

Ebay doesn't actually fight these.

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Why should they, on top of alllll the things they do for you, things you take for granted, including allowing you to have "Seller does not accept returns" on your listings, to prevent people returning items because they accidentally got the wrong size or model, or simply regret spending the money on something they don't need ...... unlike most stores where all a buyer has to do is to take the item back with the receipt (if that).    If you think I'm making a moot point, no, ebay not fighting a CCC on your behalf is exactly the tradeoff you accept by not accepting (and paying the shipping for) returns for at least 30 days.  

You can't have your cake and eat it too.  And if you think there is a greater monetary benefit to dodging the occasional remorse buyer (who doesn't know they can dishonestly claim INAD, or won't do it because it's unethical)  rather than having the benefit of eBay Seller Protection, are you sure that really makes good sense?   I mean you get the ITEM BACK to sell again, so the only bullet you're really dodging is the cost of the return shipping label.  Meanwhile you're open to scammers getting your items for free by doing CCC's.  And yes there do seem to be more and more of them, an ever-increasing  burden of battles you expect ebay to fight on sellers' behalf.  But why should they, when you won't even try to prevent the chargebacks happening in the first place, by just letting people return things as they are used to doing elsewhere?    So no ebay doesn't "fight" much; they know it won't matter with most credit cards anyway.   But if you adhere to the terms for Seller Protections, instead of fighting for you, they will LOSE for you, pay the chargeback out of their own coffers rather than your funds.  If they do that for (say) a $200 item, an average of once per year, how much $ in remorse return shipping labels do you think you would have had to buy that year?  -Don't count INADs or 'Arrived Damaged' as you'll have to buy those labels regardless. 

  

[amwldcoin]

I just had a charge back. Customer received the item, Left nice feedback and Several weeks later filed a charge back for item not as described with absolutely no communication and will not respond to messages. Disputed the charge back, the weeks rolled by and bam, funds taken from me as the Credit Card ruled in the buyers favor. Buyer gets his money back and gets to keep a top 3rd party certified coin. This is theft BTW.

In my opinion eBay's seller protection is false advertising. No where does it say you are not covered if you follow the guidelines and the banks rule against eBay. Could some one point me to where it states this?

[Anonymous]

Sorry you are experiencing this right now before holidays. Hope things get better for you😎

[mam98031]

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@amwldcoin wrote:

I just had a charge back. Customer received the item, Left nice feedback and Several weeks later filed a charge back for item not as described with absolutely no communication and will not respond to messages. Disputed the charge back, the weeks rolled by and bam, funds taken from me as the Credit Card ruled in the buyers favor. Buyer gets his money back and gets to keep a top 3rd party certified coin. This is theft BTW.

In my opinion eBay's seller protection is false advertising. No where does it say you are not covered if you follow the guidelines and the banks rule against eBay. Could some one point me to where it states this?

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Ebay has NO LEGAL way of controlling the acts any Credit Card company, nor does any other site.  

Chargebacks can be extremely difficult to deal with.  During the weeks you were waiting for a decision, did you do anything?  Did you submit evidence to rebut what the buyer was claiming?

[monster-deals]

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@themartinlady wrote:

Buyers are allowed to initiate a charge back from their bank and not exactly through ebay.

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What now? Ebay is not a credit card provider.

[amwldcoin]

Show me in the seller protection terms and conditions charge backs are not covered and you can rest your case. I did everything eBay required me to do. I called 2 hours after I received the charge back notification. I was told it was cut and dry that seller protection would cover it because the buyer did not go through eBay. eBay's reason for denying coverage was because the CC ruled in the buyers favor.

[mam98031]

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@amwldcoin wrote:

Show me in the seller protection terms and conditions charge backs are not covered and you can rest your case. I did everything eBay required me to do. I called 2 hours after I received the charge back notification. I was told it was cut and dry that seller protection would cover it because the buyer did not go through eBay. eBay's reason for denying coverage was because the CC ruled in the buyers favor.

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I'm not your enemy.  I can't show you that as there is no seller protection on Chargebacks.  So if you know where there is some, please share it with the rest of us.

I'm sorry you got bad information from the CSR you spoke with.  There is no where in the Ebay rules that require buyer to only file claims on the Ebay site.  There hasn't every been any such rule.

About the only type of Chargeback that is easily won with Seller Protection coverage is on INRs when there is clear evidence that the item was delivered via having delivery scans on the tracking.

[amwldcoin]

I can tell you what a few sellers in my specialty(25+ years here professionally and know most who matter) told me I know who are huge sellers and have regular meetings with eBay. eBay is not supposed to take your money unless your item is returned. 

If you will read the seller protection page it insinuates sellers are covered. It probably is a little vague intentionally. I am going to contact my state attorney general and hope I can get him on board. Everyone I know is under the impression these situations are covered.

[mam98031]

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@amwldcoin wrote:

I can tell you what a few sellers in my specialty(25+ years here professionally and know most who matter) told me I know who are huge sellers and have regular meetings with eBay. eBay is not supposed to take your money unless your item is returned. 

If you will read the seller protection page it insinuates sellers are covered. It probably is a little vague intentionally. I am going to contact my state attorney general and hope I can get him on board. Everyone I know is under the impression these situations are covered.

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You are trying to compare two completely different processes as if they were one process.

Chargebacks are not anything that ANY site can control much less Ebay.  There are claims filed on the site and then those known as Chargebacks filed directly with the buyer's payment source.  The two are no where near the same.  I get it that you feel they should be treated the same, but that is not the reality of the process.

[amwldcoin]

I am absolutely not treating them as 1 process. In fact with my situation it is 3 because the transaction was through Paypal. I spent quite a bit of time arguing with Paypal trying to get the Bank and Transaction information. Bottom line, I can only get it with a subpoena.

I'm saying it should be covered by seller protection. The $300 ebay is allowing to be stolen from me is going to cost them 5 figures a year in commissions as I refuse to sell on eBay again until I am confident this can't happen again. Yes, I'm fortunate I don't need the income from eBay. Just going to step into retirement mode a little earlier than I planned. I am almost 65 BTW and have been a model eBayer for 25 years.

[amwldcoin]

PS One of my biggest concerns when eBay started handling the payments and forcing sellers to use their managed payments was what would happen in this situation. I was led to believe seller protection would cover charge backs. This is the 1st one I have had since managed payments took over.

I had a few when payments were handled by Paypal and their seller protection covered every one!

[mam98031]

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@amwldcoin wrote:

PS One of my biggest concerns when eBay started handling the payments and forcing sellers to use their managed payments was what would happen in this situation. I was led to believe seller protection would cover charge backs. This is the 1st one I have had since managed payments took over.

I had a few when payments were handled by Paypal and their seller protection covered every one!

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It would be no different with Ebay handling the payment through MP or if we were still with PayPal.  When we used PP, if Ebay had the need to have money held, they just notified PP and PP would put a hold on it.

[mam98031]

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@amwldcoin wrote:

I am absolutely not treating them as 1 process. In fact with my situation it is 3 because the transaction was through Paypal. I spent quite a bit of time arguing with Paypal trying to get the Bank and Transaction information. Bottom line, I can only get it with a subpoena.

I'm saying it should be covered by seller protection. The $300 ebay is allowing to be stolen from me is going to cost them 5 figures a year in commissions as I refuse to sell on eBay again until I am confident this can't happen again. Yes, I'm fortunate I don't need the income from eBay. Just going to step into retirement mode a little earlier than I planned. I am almost 65 BTW and have been a model eBayer for 25 years.

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I'm not sure how you determined the transaction was through PayPal, but that really doesn't matter.

IDK why you spent that time arguing with PP as they would NEVER give you the financial info on another member unless under court order.  That is simply logical and reasonable.

I understand you feel you should be protected by Seller Protection, but because you feel that way will not make it so.  

According to you they opened the Chargeback because the item was not as described.  That makes it tough to fight.  You have to prove it was as described and that is often extremely difficult.  I get it that this is a frustrating process but you want to blame Ebay for something that is not within their control which is the financial institution of your buyer.

[amwldcoin]

eBay actually gave me the information but the wrong transaction number according to PayPal. The onus is on the bank that allowed the charge back and the buyer.

I feel I should be covered by Seller Protection because I was told I would be. How hard is that to understand???? I queried eBay rigorously when they introduced managed payments!

I'm sure you are familiar with 3rd party evaluations like GIA for diamonds. My item was certified and encapsulated by the top 3rd party grading service in the country. They did leave glowing positive feedback after they received the item.

I can see why it doesn't concern you too much. My average item sales price is more than 10 times your highest priced item and some of the items I sell are 5 figures. 

This problem is only going to get worse as more and more people find out they can get away with it. It's time for all sellers, including the big box stores to start prosecuting these criminals,