Question regarding a hypothetical mail order problem for sellers and PayPal...
 

I have been dealing with a unique ebay order that ended up being a scam. Luckily, I never shipped the card, so there is no loss on my end besides a few hours of lost time.

Anyways, while I was investigating my deal, several "what if" scenarios came up. For example, what if someone orders an expensive (say $10,000) item on ebay from me and pays for it via PayPal. Say that PayPal confirms the address and notes that the sale is eligible for Seller Protection. I called a PayPal customer service representative and asked her what I had to do protect myself as the seller. She said that I just needed to send it properly insured to the confirmed address. I then asked her what if the recipient claimed that either the wrong card or nothing was in the box. Her response was basically that the buyer had the right to return whatever he received from me for a full refund and that I would be responsible for that refund. I asked her how I could possibly protect myself from that situation and she said that I had the right to do business with whomever I wanted to and that I needed to decide if I trusted that person. She said that I needed to go with my "gut." Really? Go with my "gut" on a five figure transaction? The representative was very nice on the phone, but she gave me no confidence in doing a large transaction via PayPal with an unknown customer.

This seems like a pretty big loophole for a dishonest person to scam someone. What are your thoughts?

I can tell you that I watched a very close friend lose a $3500 item when the buyer claimed he sent him some junk wax and not the item. He returned the "junk wax" and I assume kept the actual $3500 item. There was sig confirmation but it didn't get signed for, though it was marked as delivered. I can't say for certain how he responded to paypal, but he is usually a rule following guy. They took the $3500 back and he got to keep the "junk wax" that was returned to him. Since then I don't think he has used USPS for anything. The verbiage of the seller protection policy is very vague on covering you for a snad dispute, which I suppose is what they could claim if they say something else was sent to them. He wasn't able to file an insurance claim because it was delivered.

On the other hand, I had a chargeback for a very large amount that paypal backed me on, that was for "unauthorized transaction" though, not the old switcheroo move.

I once shipped an expensive ring via UPS where the employee at UPS officially confirmed and documented the ring was the item being shipped. She took it out of the package, then repackaged it herself. I think this method was at the buyer's request and there was an extra charge.

Hopefully on a switch like that, it was a domestic transaction, and the Police and Post Office authorities were notified and reports were filed in the town that it happened in.

I'd be incensed if somebody stole that much from me, with the blessings of Paypal/CC Companies.

I know a case was opened with the local police department that the buyer lived in. He spent at least an hours worth or time on the phone with them total, just following up not including the police report he filed. Nothing ever came of it, hard to say what kind of follow up was done. According to the seller, he got the impression that the police had a case opened against this guy before by someone else but never found any evidence. I do believe they said they would pay him a visit but not sure if it ever happened. The item was very unique, and I have kept an eye out for it since, as I am sure at some post it was sold and will resurface on the market.

auction houses
 

Kevin,

I'm glad you were able to avoid the problem on ebay.

After bidding on some high dollar items recently in some high profile auctions, I was a bit taken aback when I tried to pay with a credit card and was asked to send a money order or personal check for the items. This shows me that not only are the auction houses saving a few percent on the transaction, but that they are covering themselves totally by not accepting paypal or credit cards (and having possible fraudulent chargebacks).

One of the auction houses did accept credit cards if your winnings were below $2000 I believe.

It actually got me thinking that it was a very smart move by them. Ebay/Paypal of course do not care about Sellers and make it very difficult for Sellers to try this approach.

mike

I am surprised we don't hear of more of these he said he said episodes. Except in the extreme case, is Paypal really in position to make credibility determinations? I'm not confident a buyer is 100 percent protected either if the seller ships a rock instead of what you won, and claims he shipped what you won. How can either party prove what they shipped or received? If the weight of the package conforms to what was supposed to be in it, there is no objective evidence of what really happened or did not.

My technique is to include with the baseball card worth over $2,000 a tape of Fatal Attraction and a boiled rabbit so the buyer knows what type of person he's dealing with. No PayPal chargebacks yet, though I get few repeat customers.

Any card under $2000, it's just a mouse.

I guess that would be one of the advantages of consigning, the shipping is out of your hand and the headache is someone else's.

If I sold a high enough dollar item to a stranger I'd probably insist on delivering it by hand. But I guess even then Paypal would say I didn't provide a shipping number/couldn't confirm delivery.

Hi Kevin,
You need to protect yourself first. Given your scenario where a buyer can simply say the box was empty and request a refund, you should not go through with it. You can always find somebody to buy a valuable baseball card, even for a little less. Would you rather have 9K for it and a successful transaction, or get scammed at 10K? It's a no-brainer. Ebay/Paypal's answer is simply unacceptable.

"Sage advice, David . . . I mean the first post."

But, seriously, an obvious technique is have the buyer pay with check or money order on expensive orders, use the UPS-type shipping method I described or come up with your own personal method of documenting what you shipped (witness, filming, other).

"In between your fits of idiocy, David, you sometimes say intelligent things."
"Thank you. I have my lucid moments . . . Actually, I have an BFA and it's called collage."
"You're not supposed to say 'actually.'"
"Whatever."

When a high dollar item has been returned because of it being not as described, I have heard of sellers actually opening the returned item at the postal counter in front of a post office employee, while getting the event on video. I suppose the same could be done when mailing an item. Even that isn't airtight, but it could certainly help you argue your case. I suppose you have to be paranoid if it is a high dollar item.

Doesn't insurance cover you on this sort of thing? e.g-if the buyer claims he received 'junk wax' instead of the item, can't you file an insurance claim based on the fact that the item was stolen? Certainly that fits the definition of 'stolen'.

Let the insurance's fraud area go after the thief.

Don't think that would work though. Insurance would say the same thing: how do we know you mailed the item you claim to have mailed?

If that's the case, then insurance is totally worthless and no one should ever purchase it. I believe that if you know their has been theft, and you report it to the police, you are covered.

Your not looking at it from the perpective of the USPS. If it were that easy, every scammer would be mailing an empty package to a 'friend', insuring it for $1000, the friend saying they recevied an empty package and then the scammer filing a claim with the USPS. Packs makes a good point - how does the USPS know you really mailed the item you claim to have mailed?

So insurance is worthless when there is a theft, even if there is a police report?

Seems strange to me, but okay.

I once asked this question on the PSA forum: Link. The answer was:

"First rule in doing this is to Not, and mean Ever, accept payment through Paypal. I Only accept High Dollar payments outside of Paypal. There are several ways to do this with your Buyer. Usually on Hi Dollar items there has been contact with me before they ever drop the Hammer and I make it clear what my rules are ahead of time. I have never had a 2K plus Sale without some form of Pre Contact, usually to negotiate on price. When we do come to a deal I usually get a Cashiers check or some type of Certified funds and then still wait a few days and have my Banker contact the Financial clearing house for the transaction and do this even with Repeat Customers. I Never ship anything until I am assured of the item clearing. I have no issue with my Buyers being amiable to this, if it is a Legit Buyer of a Hi Dollar item they should have no problem with this and in fact other than a little anticipation on some of their parts, have never had no problem.
... Also, any and all High Dollar items are Shipped USPS Registered with an Additional Second Signature Delivery Confirmation. Have never had a problem this way. "

I believe the insurqnce he had was through ebay labels and shipcover. I also am fairly certain it was only insured up to their limit and perhaps not the full amount. He did not get paid out on the claim, and it may have been because of the signature confirmation not happening and just being blank when they tried to verify it, through no fault of his own.

The USPS has to prove mail fraud, not assume without evidence it happened and not pay. If the latter was the case, the fraud would be that they charge for insurance.

I think the insurance mostly covers damaged or lost packages but not the actual item within the package. Again I could be wrong but I think purchasing insurance covers you in the event that the package is lost or destroyed prior to delivery.

I.E. if you insure a package for $1,000 and it drops off the tracking system and can't be found, you have a viable claim. Same if the package is run over or something and the contents are damaged. In cases of theft I think the signature will determine if the item was delivered correctly, and if it wasn't then the post office has an obligation.

I don't think insurance covers you in the event that someone says they got something other than what you shipped inside of your package.

insurance
 

I have heard so many horror stories about insurance with the post office and 99% of the time I will just send it without and take the chance. I have rarely had an issue with something missing and if I did it was under $25. To each his own but if it is high value then I usually will go with UPS or Fedex.

mike

Could be, since their job is purely to deliver what you shipped; however, the thief is claiming that they did not receive what you shipped - that means that something happened to it along the way and it never arrived. As long as they stick to that story, and you stick to yours, you should be good. I get David's (J's) logic, and I'm sure that if it happened more than once, and for a large $ amount, you would get investigated and end up in prison for fraud.

Theoretically someone could have opened the package, removed the contents or inserted something different, and packaged it right back up. I would think that would be covered.

My dealer insurance covers me for packages I ship, packages shipped to me, or theft. The same company offers collector insurance, but I'm not sure if it covers the same exact situations. If you buy/sell a lot of stuff that requires insurance, you might look into it.

This is worth reading over & over +1
Makes sense now to protect myself and here i thought Paypal was the way to go.
Learn something new every time on here.