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A Quick Guide to eBay Seller Protection

Published at Oct 22, 2015.

It’s commonly believed that eBay seller protection is nonexistent. That’s not true. While buyers get the better end of the bargain, eBay has several policies in place to protect sellers.

Understanding these policies is as important to being a seller as knowing your rights is to being a citizen. Of course, reading through all that legalese can leave your mind completely numb. We assembled this quick guide so you could learn how seller protection works without falling asleep on your keyboard.

Last updated 6/14/2018.

What eBay Seller Protection Will Defend You From

1. Returns Abuse

The problem: Some buyers game the system to get a full refund when they shouldn’t.

Abusive Buyer on eBay

We know what you're up to, Randy.

The protection: If the buyer doesn’t return the item exactly as they received it, then you can deduct the losses from the refund amount. You can even make a deduction if the item is damaged during return shipping due to poor packing on the buyer's part. However, if they lie to eBay to try to get a full refund, you may need to prove you’re in the right by showing eBay your listing was accurate and honest.

2. The eBay Money Back Guarantee

The problem: If customers don’t feel like you are resolving a problem, they can ask eBay to make you give their money back.

The protection: You will not need to provide a refund if you can prove you held up your end of the bargain. This includes:

  • When a buyer says they did not receive the item, but you completed all tracking requirements and your courier shows the item as delivered.
  • When a buyer tries to return an item even though they received it exactly as described and shown in your listing.

eBay automatically closes Money Back Guarantee cases if the customer resorts to a chargeback or PayPal Purchase Protection. Thanks to that, you won’t end up refunding someone twice. If a customer still tries one of those after you’ve already provided a refund, you can place an appeal with eBay.

3. Transaction Defects

The problem: One of the worst things that can happen to a seller is having a transaction marked as defective. This happens when you cancel an order or when an eBay Money Back Guarantee case or PayPal Purchase Protection case is decided against you.

Once you get an eBay defect rate above 0.5%, you can’t be a Top Rated Seller. You’ll also fall below the minimum seller standards if it rises over 2%.

The protection: eBay will remove defects that are clearly unfair. For example, if you have to cancel a transaction due to serious bad weather or a problem with the carrier, eBay will remove the cancellation defect. They may also delete any defects caused by a buyer who's trigger-happy with claims and returns.

Because eBay knows that some buyers are just crazy, defect rates won’t affect your Top Rated Seller status unless four or more buyers mark a transaction as defective. At least five buyers will need to do so to put you at risk of falling below the minimum standards.

This layer of protection saves you from getting clobbered if you get a couple defects in your first handful of sales. It also means you won’t fall below any standards just because of one or two unfair buyers.

4. Buyers Who Don’t Pay

eBay Seller Protection: Security for Your Business

eBay isn't afraid to kick the lowlifes out of the club when they cause too many problems.

The problem: Some buyers will order something or win it in an auction, then neglect to complete the payment. One rare breed of jerk will do this and then post negative feedback on your profile.

The protection: eBay removes any feedback posted by buyers who haven’t paid. Additionally, they remove defects for cancelling the transaction. You can also report an unpaid item. If the buyer doesn’t pay you afterwards, you can get back any final value fees you paid to eBay for making the sale.

Additional Reading

Please note that eBay’s policies may change over time, and this post is just designed to give you a quick overview of how they work. You can review the full eBay seller protection policy here.

Summary

While eBay may offer more protection to its buyers than its sellers, you’re far from defenseless. Know when you’re protected and don’t be afraid to ask eBay for help with an abusive buyer. Other sellers—and your bottom line—will thank you for it.

Looking to get a better idea of how eBay seller protection works and why it’s important? See "A Quick Guide to eBay Returns for Sellers" or "How to Get a Great eBay Feedback Score."

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