Seller Exposure After NAD Claims

Here's my guess at the #1 seller resolution frustration scenario out there right now:

A seller sends an item they are very confident is as-described. However, once it arrives, the buyer files a not-as-described (NAD) complaint. Maybe the buyer legitimately disagrees with the seller about the item condition, maybe there's something more nefarious going on -- who knows. After several back and forth messages with PayPal customer support to get the facts of the case, PayPal decides for the buyer, telling them they have to ship the item back to the seller in order to get their refund. Eventually, the buyer does ship back the item, but much to the seller's chagrin, it's now either damaged or incomplete.  The buyer then gives the tracking number to PayPal and they get their money back, but the seller is out the shipping and insurance -- plus, they have an item that has lost most of its value.

This is not a new issue -- I have seen examples of this kind of situation for several years. In contentious, not-as-described cases, PayPal will usually tell the buyer to send the item back to the seller, and once delivery is confirmed PayPal will release the funds to the buyer. In most cases, we’d call it even at that point, as the buyer and seller are out the same amount. For example, say the buyer paid $15 plus $5 for shipping ($20). Then the buyer shipped it back to the seller (presumably at a cost of $5). Then they got their original payment amount back, which was $20. So the buyer is out $5 (the return shipping) and the seller is out the $5 for the original shipping, but they have the item back. The transaction was unsatisfactory, so PayPal pushed the “undo” button as best we could and shared the cost between the members.

Returned item is damaged

However, what if the buyer damaged the item before they shipped it back, so the seller is out more than just the shipping? As if the seller wasn't frustrated enough with the time spent on the claim process and the decision by PayPal, now the damage to the item adds insult to injury.

Let me be clear that PayPal does not relish the role of playing decision maker in cases like this. We're not able to look at the item directly, which makes determining the appropriate outcome in a not-as-described case quite difficult. We’re asked to make the call because the buyer and seller can’t work the issue out directly, and we work hard to make the best call we can in each situation. But someone is going to be disappointed by the decision, and we don't like disappointing our customers.

It's understandable for members to suspect foul play, even when there might be none at work.  For  instance, an unscrupulous buyer could send an empty box or a box of junk just to get the tracking number (just as a fraudulent seller sometimes does). Once the buyer has the tracking number they can present it to PayPal to get PayPal to release the funds back to them. I've looked into this particular scam and found very few actual examples of it happening, but customer service is aware of it and prepared to handle it should it arise. 

Let me be clear, though (as I was in my prior post when I was addressing sellers): if a buyer does try something like this, it is clear buyer fraud -- just like if they were to send a fake money order or file a false protection claim. I don't think we need any buyer who would act like that in our marketplace.

The good news is that the odds are very high we'll catch any buyers that try this little scam. We track the number of PayPal claims a buyer files. Only a tiny percentage of buyers file more than one claim a year (the majority files none). If a buyer files multiple claims, particularly multiple SNAD claims, they will stick out like a sore thumb. Also, sellers have the ability to report suspected buyer fraud if they lose a SNAD claim – just click the “report buyer fraud” link on the right hand side of the closed claim in your Resolution Center and you'll see the link to do so.

Send me your experiences

I've been chatting with some folks at PayPal about ways we might be able to offer help to sellers victimized in this way in a more systematic fashion. I think PayPal needs to get on top of this issue, because it's a particularly bad experience for sellers. Until then, let me know in the Chatter discussion forum if you've gone through a situation like this one. It's helpful for me to learn more about individual cases that may fit this pattern so we can determine how best to address it.