eBay, a website where consumers can buy everything from shoes to islands. The retail auction website launched 24 years ago in September of 1995 and many have fond memories of bidding on items over the years.
The landscape has changed significantly but Amazon and Walmart aren’t the only ones bringing about the revolution. The website has gained attention over the years for outlandish auctions including one claiming to allow the buyer to become invisible. Not everything is fun and games.
eBay has a shady side as well. From people being arrested for trying to sell their children to a rampant forgery problem, one of the web’s most popular websites is covered by a web of deceit full of shady characters finding ways to get the upper hand.
Nearly every aspect of the eBay auction system can be manipulated to benefit one party or the other and it is a problem with widespread consequences. Not only will these issues impact the San Jose-based company but it may have a lasting impact on other retail giants including Amazon and Walmart.
“We want to maintain a fair marketplace for all users, and as such, shill bidding is prohibited on eBay.” In 2009, Australian Philip Cohen received an 8,000-word case study on shill-bidding on eBay at AuctionBytes online forums.
Cohen tracked an Australian eBay user who made 190 bids on 41 items over 30 days. The items had been listed by the same eBay seller leading Cohen to believe that the seller and bidder were one and the same or they were cooperating to inflate the price of said auctions.
The bidder ultimately increased the price of the item by as much as $156. Shill bidding involves using another account to artificially inflate the auction price. It could be a friend, family members, colleague, or the seller pulling the strings behind the scenes.
Today, it is significantly harder to identify shill bidders since sellers can make their listings private allowing them to hide the identities of all bidders. It also doesn’t help that eBay has made it significantly more difficult to find information about user’s past bidding and buying activities.
In the rare chance that someone is caught shill bidding or selling prohibited items on eBay, their account may be banned. Is that the end of the road forcing that individual to find an alternative scam? Not at all. Stealth accounts enable banned users to regain access to eBay using an alias.
While creating a stealth account may be off-limits for those not tech-savvy, buying one couldn’t be easier. There are countless websites offering stealth accounts for sale with the average price being a couple of hundred bucks.
And, these are not ordinary accounts with no feedback. Some have been registered with eBay for 12 years while others have 800 or more feedback ratings. Many stealth account vendors provide the buyer with an eBay account, PayPal account, virtual credit card, virtual bank account, VPN, and so much more.
They’re even protected by a 180-day money-back guarantee in the event the scammer quickly gets the new account banned. Accounts specifically for the United Kingdom are slightly more expensive.
Much like modern society, eBay can identify and ban troublemakers but they cannot keep them out for long.
In recent months, some eBay users have discovered a new and much easier way to make money. By using the world’s biggest online retail marketplace, they can run an eBay store, make thousands of dollars, and never handle the products.
“Listing an item on eBay and then purchasing the item from another retailer or marketplace that ships directly to your customer not allowed on eBay.” While the policy is clear, eBay is doing a poor job enforcing its rules.
Some are selling items on eBay, buying them on Amazon, and having them shipped using their Prime membership. It is against Amazon and eBay’s policies but the bait and switch continue.
MSMD writers have been tracking several eBayers using this technique and the results are surprising. One user who we’ll call Jameson has been a member since November 16, 2019. During that time, Jameson has received 32 feedback scores.
We ordered from this individual and the item was delivered in Amazon packaging within 2 days. The packaging label directed to Amazon’s warehouse making it difficult to return the item if necessary.
For those 32 transactions, Jameson earned a total of $425.68 while offering free shipping and taking advantage of Amazon’s Prime delivery service. Jameson had listed BIC Flex 5 Men’s Razors for sale at a Buy It Now Price of $18.49. Those razors sell for $13.98 on Amazon earning Jameson $4.51 for creating a listing and placing the order.
If Jameson is earning similar revenue on all of his transactions, he would have earned roughly $144 a month with minimal effort. Jameson is a small fish in a much bigger pond.
The next eBay we tracked was more ambitious than Jameson. The user who we’ll call Sunny had been a member of eBay since May of 2017 and had completed 388 transactions during the past months. Sunny was selling many items including 3.75 pounds of Tootsie Pops for $24.29 with standard shipping for $1.99
On Amazon, the same item sells for $19.60 earning Sunny a whopping $6.68 per sale. The seller incurs no shipping cost since “he” is taking advantage of Amazon’s generous shipping incentives.
If Sunny is making similar revenue on all transactions, he would be bringing home $2,591.84 in a single month. That is more than Americans making the lowest median weekly income of $2,336 a month.
When looking at Sunny’s Feedback, many unsatisfied users have called out the fact that he is reselling items from Amazon. One writes, “Amazon RESELLER. if I wanted to shop on Amazon I’d SHOP THEIR FIRST SHAME ON YOU (sic)”.
Another writes, “Seller is a SCAMMER! He has no inventory he orders cheaper on Amazon and takes $”.
Despite Amazon and eBay policies prohibiting such behavior, it continues. The problem is further complicated due to the fact it has gotten increasingly harder to contact eBay’s customer service over the years.
A Failure To Communicate
Perhaps the biggest problem of all is eBay’s failure to communicate. When it comes to reporting a seller for violating one of eBay’s policies, there is no clear path forward.
The website offers no form to submit a report but only a list of reasons why one should report a seller. The Customer Service Page claims, “We take all reports seriously, and if we find that a member has been violating our policies, we will take appropriate action.”
Without a form to report problematic users breaking these rules, there are no repercussions. We contacted Amazon’s customer service and two representatives seemed oblivious to the issues.
They couldn’t understand how our staff managed to get a tracking number from another individual. The team leader wasn’t very helpful either. After 30 minutes, we were left scratching our heads and they likely were too. On top of that, one of the customer service representatives made us feel like we were the scammer by emphasizing we were not the account holder, which we very well were aware of.
Serious Problems Ahead
While these problems may not seem serious, they may lead to additional issues. Some consumers don’t want to shop with Amazon and they don’t want the retail giant to have their physical address. It is a betrayal of trust when the eBay reseller gives that information to Amazon without permission or knowledge.
Then, there is the complexity of dealing with returns. Who shall be responsible for the returns and refunds? Who will handle the disputes between the customer and the client? Will Amazon have to step in or will eBay decide who to side with?
Where are the refunds sent? Should they be redirected to someone overseas or returned to Amazon’s warehouse so the reseller can receive a refund? Amazon often takes a net loss on shipping due to its Prime service and actions like this from people looking for a way to make a buck aren’t going to help.
eBay has turned into the wild west of online retailers and that won’t change until it manages to build a rapport with honest consumers. To do that, it needs to develop a customer service system designed for the 21st century instead of resorting to dial-up solutions.
Is turning a blind eye the way for eBay to recover from many plaguing issues? The company acknowledged a loss of approximately $200 million after being penalized by Google in 2014 for bad SEO search practices. The monetary loss was alleged to be related to an approximate 50 percent loss in organic search visibility.
The company is amid transitioning from former CEO Devin Wenig to new CEO Scott Schenkel after Wenig was reportedly forced out by activist investors in September 2019 because of the company’s strategic direction.
Please feel free to contact us if you have experienced the same issues with eBay.