Chargeback Scam- What are my options?

[gemcitygems]

We have been successfully selling restored Fine Jewelry on Ebay for over 15 years without issue. In the past 6 months however, we have been faced with the exact same chargeback scam twice: The buyer buys an item from our shop, waits until after the return period, and then opens a return request. Ebay denies the return request as it is past the return period. The buyer then opens a chargeback through paypal claiming that the item is damaged. Paypal then refunds them their money and they get to keep both the item and the money. 

The first time this happened, I reached out to the buyer and calmly explained that since she reversed her payment, she is no longer the valid owner of that item and must return the property or else we would file litigation against her. Im not sure if we could actually file litigation against her, but I felt that would cause her to return the item. After going back and forth with her, she did return the ring which valued at around $500. 

The most recent time, this morning, is not going as smoothly. This buyer is claiming to have had the non-existent "damage" repaired by a local jeweler and will only return my item (sold for $972) if i send him money to pay his jeweler. This seems like a clear scam-- he wants me to send him money to buy back my own merchandise..... and how do I know that hes even going to send it? 

I spoke to another Jeweler about it and it seems like this is a new trend and the number one issue that is plaguing our industry right now. Everyone is afraid to sell online because there is essentially no protection. Paypal is always going to side with the buyer and of course their banking institution is also going to side with them. What are my options for ensuring that this scam does not continue to happen? Do I have any legal rights in reclaiming my stolen item? 

[bonjourami]

Has that second buyer actually opened a case? If not tell him to open one, because he has had the item 'repaired', he has lost all buyer protection, the item would have to be returned in the same condition it was sent.Just respond to the case with that information ...In the first case, what reason did the buyer use to do a chargeback? If it was as an unauthorized purchase, all you had to do was provide the tracking number, proving it was sent, you dont even have to prove delivery.

[ittybitnot]

 The buyer then opens a chargeback through paypal claiming that the item is damaged. Paypal then refunds them their money and they get to keep both the item and the money. 

First you have to determine what sort of "claim" the buyer is making.  Though both credit card chargebacks, and PayPal claims for not as described are processed and visible in PayPal, they are two different things. 

For a PayPal claim, the buyer is directed to return the item (on their dime) or no refund is given.  Keep in mind, that in these instances, just like ebay, ANYTHING can be returned with the appropriate delivery comfirmation and the buyer will prevail at the seller's expense. 

For credit card chargebacks, PayPal will submit to the ruling of the credit card company.  Return of the item is not required for the buyer to obtain a refund at your expense. 

Which kind is your "new" case outlined above?  

[68barbie]

Actually, depending on the credit card provider they may require the buyer to return the item at the seller's expense before granting a refund. I went through a credit card chargeback for an INAD almost a year ago and "won" because the buyer refused to return the item. The credit card provider denied their chargeback and PayPal returned my funds. It was a very lengthy process but I eventually prevailed. It's not a process for the faint of heart!

-C

[gemcitygems]

In both instances, the buyer has basically circumvented the Paypal case system and went straight to opening a chargeback with the bank/financial institution. In both instances, we have submitted very detailed information to Paypal so that they could defend our shop to the buyers financial institution and in both instances we have lost the case and the buyer has been refunded their money and got to keep the item.

What I do not understand is how this is legal. Basically all you need to do is purchase a high-value item, wait until the return period has passed, and then open a chargeback with their bank. They then get to keep both the item, as well as receive a refund for their full purchase price. This is clear theft to me. It is essentially the same as buying a diamond ring from a jewelry store but paying with fake money.

At first I just chalked it up to a bad egg but now it seems like it is a legitimate reoccurring issue. Buyers know that when they shop online they do not have to pay for their item because there is an "out". If they get 6 months out and need money unexpectedly, they can literally file a chargeback at any time and get their money back and not have to return the item. This is TERRIFYING as a seller. 

[gemcitygems]

No, he opened the Ebay case first claiming that he did not like the item-- buyers remorse. Ebay ruled in my favor as the seller and closed the return case because it was past 30 days.

He THEN opened a chargeback with his bank claiming that the ring was damaged (because obviously he damaged it in order to win the case that he had just lost on Ebay by claiming that nothing was wrong). Apparently all the bank asked for was proof that the item was damaged, so he sent them a photo of the ring (which was severely broken as though he took a hammer to it to bust the gemstone out) to show that it was broken, they agreed that it was broken and refunded him his money while still letting him keep the item.

He THEN took the ring to a local Jeweler to put the stone back into the ring so that he has both his money from the purchase refunded and the item, now back to its original condition.

[emerald_door]

I'm really sorry this has happened to you.  I hope there's a way to fight this.

[ittybitnot]

 This is TERRIFYING as a seller. 

Indeed.  What did PayPal have to say about not getting a return?   I suppose it may have been the old "it was the credit card company and nothing we could do"??? (Except for charging you an extra 20$ for wear and tear on their carpet from rolling over on your behalf).  

Wondering how the poster from above got their money back when the item was not returned???

[myangelandmyprincess]

Depends on the CC company but many at least require the buyer make the item available to the seller.   I would tell the buyer you never agreed to any repairs being done on the jewelry that filing the charge back means that the return of your property had been made available to you it was not theirs to repair you could have done that upon it's return. By repairing it they accepted the property as theirs they either need to repay or return if they don't intend to pay  a date to return or pay by to avoid litigation provide a shipping label and leave the ball back in their court