If a buyer and seller on eBay have a dispute over an eBay transaction, what to do? Luckily, eBay has procedures to help resolve many of these disputes. You can also turn to a non-eBay mediation service or use PayPal's Buyer Protection Program. These are usually your best bet, because small claims court is rarely a good option for resolving eBay transaction disputes.
eBay Mechanisms to Resolve Disputes
eBay has mechanisms for resolving some of the more widespread eBay disputes. Listed below are some common eBay transaction disputes and the procedures eBay offers to help resolve the problem.
The winning bidder does not pay up. Occasionally, a winning bidder fails to pay for an item. In that event, eBay offers a credit to the seller because the buyer backed out of the transaction. To receive this credit, called a "final value fee credit," the seller must, within 45 days after the end of the auction, file an "unpaid item dispute." The seller cannot file the unpaid item dispute until seven days after the end of the auction. This waiting period is not required, however, if the buyer is no longer registered with eBay or if the seller and buyer mutually withdraw from the transaction.
The buyer does not receive the item. If the buyer never gets the item, or if the buyer gets the item but it is "significantly not as described" (SNAD), buyers can utilize eBay and PayPal (if the payment was made via PayPal) procedures to obtain relief. First, the buyer should attempt to resolve the matter with a written demand on the seller. eBay provides a sample auction demand letter that you can tailor to fit your situation.
If the buyer's attempts to resolve the situation with the seller fail, then the buyer can file an "Item Not Received or Significantly Not as Described" dispute with eBay. At that point, eBay will step in, contact the seller, and seek to resolve the matter. In some cases, you will be asked if you wish to escalate the dispute to an official eBay claim. If that happens, eBay's Trust and Safety Team is alerted and your claim may result in the seller's account being closed.
The buyer or seller disagrees with the content of feedback. If a buyer or seller has a dispute over the content of feedback one or both writes, they can mutually agree to withdraw it under eBay's mutual feedback withdrawal process. (This differs from the process whereby eBay removes feedback that violates the feedback abuse rules.) You may also be able to get feedback removed if you invite the other party to participate in a SquareTrade mediation, described below, and the other party refuses. In addition, there are special procedures for feedback disputes involving eBay Motors vehicle transactions.
Using Non-eBay Mediation Services
SquareTrade is an independent online dispute resolution service that offers impartial mediation services for eBay users. The SquareTrade process requires that the disputing parties consent to the mediation. An impartial mediator guides the parties to a final resolution. The party requesting the mediation must pay a fee of approximately $20; there are no additional charges for participating in the mediation. You can find more information on this process at www.squaretrade.com.
Using PayPal's Buyer Protection Program
If you used PayPal to make your purchase and you (1) did not receive the item, or (2) received an item that you believe is significantly not as described by the seller, your loss is insured by PayPal for at least $200. Moreover, it may be insured by PayPal for up to $2,000 if it meets certain requirements -- for example, the seller's eBay feedback rating is at least 50, at least 98% of the seller's eBay feedback is positive, and the seller has a Verified Premier or Verified Business Account in good standing. You must first attempt to resolve the dispute using PayPal's dispute resolution process.
Small Claims Court
Can a defrauded eBay buyer take the matter to a local small claims court? Usually, the answer is no. (To learn more about small claims court, see Nolo's Small Claims Court area.)
Does the court have personal jurisdiction? The key question in eBay cases is whether the court has "personal jurisdiction" over the seller. If the seller is in the same state as the buyer or has sufficient "commercial contacts" with that state, the small claims court may have personal jurisdiction and the buyer can file the matter in that state's small claims court. (To learn more about personal jurisdiction, see Nolo's article Personal Jurisdiction: In Which Court Can I Sue the Defendant?)
However, in most eBay transactions, the seller and buyer are in different states and the seller has not done sufficient business in the buyer's state in order for the court to have personal jurisdiction over the seller.
Suing in the seller's home state. A buyer could solve the personal jurisdiction problem by filing a lawsuit in a small claims court in the seller's home state. The process of traveling to another state to file a claim, however, is often too expensive to merit the lawsuit. And even if the buyer wins a small claims court case, he or she may still have to force the seller to pay the judgment, a time-consuming process known as enforcing the judgment. (To learn more about enforcing judgments, see Nolo's article I Won My Case, Now Where's My Money?) Except in the case of high-value items, pursuing a small claims action over an eBay transaction is probably too cumbersome for most buyers and sellers.
To learn more about eBay rules and strategies, get The eBay Business Start-Up Kit, by Richard Stim (Nolo).