Why eBay should be more strict on Returns ...

[mr_lincoln]

Below is an article that appeared on the internet this morning about one person who amassed over 1 Million $$$ in fraudulent returns at over 1000 store locations.  eBay, along with every other sales venue, should not be afraid to be more strict on returns. There have been other articles and/or announcements by store chains who are becoming stricter with return policies … and well they should. Fraudulent returns hurt everybody and Buyers should actually applaud strict return policies as they will help keep costs down in the long run. Not to use an old cliché but it only takes one bad apple to spoil the whole bunch. As it relates to eBay and other online sales venues, lenient return policies encourage fraudulent returns because the Buyers are far removed from face to face contact with Sellers.  There are people that will always try to game any system, be it online or face to face, but IMHO being stricter on returns would cut down on a good portion of them.

[dhbookds]

Pretty clear WM isn't, hasn't been, keeping track of those that return things.......   We know from a few buyer complaints that ebay is doing at least some of that......

[retrose1]

WalMart went after this guy because it was WalMart that was losing the money.

As long as ebay has it set up so that it is the seller that will take the loss and not ebay - it is doubtful that anything will be done about scamming returns and the buyers who abuse on ebay.  Sellers should face that fact and plan accordingly.

[brianc3784]

eBay credits you a FVF when you get a return, so eBay does take a hit when a seller gets a return. 

[mr_lincoln]

@retrose1  Actually, eBay loses their FVFs on an official return so they do have a vested interest.  Granted, the Seller takes the bigger hit but eBay ponies up the FVFs as part of the deal.  I seem to recall someone posting that Amazon is becoming more strict on returns ... with all the copying going on it would follow that eBay (eventually) will to the same ... and for good reason.

[goodluckselling]

I doubt anything like this could happen on eBay?  When a buyer on eBay regardless if they are a registered account or a guest checkout has identifying info attached to the transaction details.

 A walmart buyer could purchase with cash so there is not a lot of identifying info other than cameras taping the returns.  Also with eBay being one location versus thousands of walmart locations seems would make it much easier to focus in on frequent offenders.

About what you are calling - lenient return policies eBay can be (and I understand they are) more aggressive in this area.  What needs to be understood is that this kind of policy brings in more transactions which means yes we will have more returns both legitimate and fraud ones but the more transaction far, far out weight the loses from the fraud.  It really is a numbers game.

Now you can say but the fraud are against the seller who is the one losing revenue but the truth is eBay takes a hit in reputation that is often repeated in quotes like "I will never buy/sell there again"  "I will tell every one I can about how crooked eBay is"  Things like this does have value against the venue and you and I as sellers as well.

Good Luck Selling!

[brianc3784]

Amazon doesn't even offer free returns for buyers remorse, so that was not a good move on eBay to push that. 

[luckythewinner]

Why eBay should be more strict on Returns ...

When someone cheats WalMart, WalMart loses the cost of the merchandise.

When someone cheats an eBay seller, eBay does not lose the cost of the merchandise.

WalMart has a huge incentive to stop fraud.

eBay does not have nearly the same incentive.

[retrose1]

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@mr_lincoln wrote:

@retrose1  Actually, eBay loses their FVFs on an official return so they do have a vested interest.  Granted, the Seller takes the bigger hit but eBay ponies up the FVFs as part of the deal.  I seem to recall someone posting that Amazon is becoming more strict on returns ... with all the copying going on it would follow that eBay (eventually) will to the same ... and for good reason.

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Ok, seller loses a thousand and ebay might lose a hundred - if the seller remembers how to do it right and get the fees returned and doesn't let ebay force the return because the seller is so angry because they are being so obviously scammed.  In the mean time, the buyer is refunded and happy and free to scam some more - thereby generating lots more fees for ebay and only risking ebay a small amount of loss compare to the sellers 10x that amount.

The seller will be out the item - the money the item costs - the payment - while ebay broke even.  Wait a minute, doesn't ebay keep the ship fee gouge , so ebay is still ahead?

[goodluckselling]

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@luckythewinner wrote:

Why eBay should be more strict on Returns ...

When someone cheats WalMart, WalMart loses the cost of the merchandise.

When someone cheats an eBay seller, eBay does not lose the cost of the merchandise.

WalMart has a huge incentive to stop fraud.

eBay does not have nearly the same incentive.

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I can tell you from experience walmart does not lose the merchandise as often as you might suggest.  A company I worked for had three full time employees to handle the walmart returns and or credit claims.  They would pull out claims for merchandise they bought upwards of two years before hand, and for reason like shelve damage, buyer satisfaction returns, missing product from boxes, etc.

They took forever to pay there bill and there was always discrepencies from them and lots of bullying tactics.  We dropped them all together and catered to other upstart big box and replaced the lost revenue in short time.

I also think there is an under valuation of the power word of mouth carries online through social media outlets.  Regardless if the facts are true or not it has tremendous power to effect outcomes.

Good Luck Selling!

[m60driver]

Walmart has both high gross margins and high volume.  Return costs are built into the pricing with many of the return costs being shifted to Walmart's suppliers.  This story just goes to show just how bad one individual needs to go before Walmart notices.  Ebay's gross margins are also quite high as they don't have inventory costs.  Return of FVF due to returns are built in to their pricing.  They need to be built in to Ebay seller's pricing as well.  You need to have either very high margins, high volume, or some combination of the two to make this work.  Lower volume sellers purchasing through traditional wholesale sourcing will have a hard time competing.

[hillbillymedia]

No doubt the USPS and other carriers are loving all the extra revenue of shipping items back and fourth as well.

[mr_lincoln]

@retrose1

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@retrose1 wrote:

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@mr_lincoln wrote:

@retrose1  Actually, eBay loses their FVFs on an official return so they do have a vested interest.  Granted, the Seller takes the bigger hit but eBay ponies up the FVFs as part of the deal.  I seem to recall someone posting that Amazon is becoming more strict on returns ... with all the copying going on it would follow that eBay (eventually) will to the same ... and for good reason.

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Ok, seller loses a thousand and ebay might lose a hundred - if the seller remembers how to do it right and get the fees returned and doesn't let ebay force the return because the seller is so angry because they are being so obviously scammed.  In the mean time, the buyer is refunded and happy and free to scam some more - thereby generating lots more fees for ebay and only risking ebay a small amount of loss compare to the sellers 10x that amount.

The seller will be out the item - the money the item costs - the payment - while ebay broke even.  Wait a minute, doesn't ebay keep the ship fee gouge , so ebay is still ahead?

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Too many returns, regardless of the type (SNAD, Remorse, Free Returns, Fraudulent, etc.) cause loss on the selling end venue (online or B&M) and thus drives Selling prices UP whether online Sellers build that loss into pricing or the B&M stores do.  Those are the facts, some venues are becoming more strict on returns, again more fact ... WHY?  Because of the huge losses they suffer, fact.  And "huge" can mean a small seller's losses on eBay because it is "huge" to them and the article on the OP was one Buyer scamming the system for over 1 Million ... THAT is huge to me, that's for sure. 

[mr_lincoln]

@hillbillymedia

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@hillbillymedia wrote:
No doubt the USPS and other carriers are loving all the extra revenue of shipping items back and fourth as well.

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Excellent point ... so it might follow that if returns become fewer shipping costs might go up, right?!?

[hillbillymedia]

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@brianc3784 wrote:

eBay credits you a FVF when you get a return, so eBay does take a hit when a seller gets a return. 

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What does the seller do when they get an item back? They re-list it at a higher price on ebay to cover the cost....ebay, paypal, and the shipping companies still win.