Seeking Help from eBay and PayPal: Online Dispute Resolution

Q: "Will eBay or PayPal take my side if I get into a dispute with a buyer?"

A: Absolutely, positively not. Both eBay and PayPal take the position that they are "platforms"—playing fields, if you like—on which sellers and buyers interact directly. If you get into a difficult situation with a buyer, both eBay and PayPal expect that you and your buyer will resolve it directly, without their involvement. If you can't, well, that's why the legal system exists, isn't it?

Having said that, eBay and PayPal offer a number of resources to sellers and buyers who get into difficult situations, as follows:

• eBay dispute resolution. If a transaction did not involve PayPal (i.e., the buyer paid by check or money order), either party can submit their dispute to eBay for mediation (for full details, see pages.ebay.com/ help/tp/problems-dispute-resolution.html); eBay will ask questions of both parties in an attempt to broker a negotiated settlement of the dispute, but it will not decide who is right and who is wrong.

• PayPal's Resolution Center. If the buyer paid via PayPal, either party can submit the dispute to mediation (for full details, go to the PayPal home page, click on Security Center, then click on Resolution Center). PayPal will ask questions of both parties in an attempt to broker a negotiated settlement of the dispute. However, it will not decide who is right and who is wrong unless either party accelerates their claim, in which case PayPal employees will review both parties' claims and render a decision, the vast majority of which will be in the buyer's favor.

• SquareTrade.com. If the seller or buyer in a dispute posts negative feedback on eBay and the other party feels it's uncalled for, he or she can file a claim with SquareTrade for a $29.95 fee ($100 for disputes on eBay Motors). If the party that posted the negative feedback fails to respond to the claim within fourteen days, SquareTrade will recommend that eBay remove the negative feedback (and eBay usually—but not always—goes along with SquareTrade's recommendation). However, if the other party does respond to the claim, SquareTrade will ask questions of both parties in an attempt to broker a negotiated settlement of the dispute, but it will not decide who is right and who is wrong.

So where is the "Judge Judy" who will hear both sides of the dispute and enter a binding ruling in favor of one party or the other? Answer: The small claims court in the state and county where the buyer resides is the only place that will render judgment in online seller-buyer disputes. Neither eBay, PayPal (unless prompted to do so), nor SquareTrade will render judgment. For details on how to bring an action in the small claims court where your difficult buyer resides and does business, see Chapter 6 of my book The eBay Seller's Tax and Legal Answer Book.

Q: "I'm in a dispute with a buyer right now; both of us want to do the right thing, but neither of us knows how to get this resolved and behind us. Do you have any suggestions?"

A: Always remember that any dispute with a buyer on eBay is a negotiation—each side gives a little in order to get something in return—and that sooner or later a result must be reached. Instead of writing pages and pages of e-mails justifying your position and explaining why the other side should back down, make them a counteroffer and solicit a reply, along the following lines: "Since it's obvious you don't want this item, please return the item to me by UPS Ground and give me a tracking number. If the item is in the same condition it was in when I shipped it, I will refund 50 percent of your bid amount plus your return shipping. If that doesn't work for you, please tell me what will, as I'm happy to discuss any reasonable solution to this problem."

The buyer will almost certainly counter with a proposal of his or her own, but usually what happens is that the ground separating you gets smaller and smaller, such that at some point your difference is so small you can simply split it equally between you and move on.

For an example of how to negotiate a dispute with an eBay buyer, see pages 146-147 of my book The eBay Seller's Tax and Legal Answer Book.

Q: "I've been in a dispute with a buyer for several months now. I have used both eBay's and PayPal's online mediation services, and we still can't get to a resolution. Where can I go from here to get justice?"

A: If you've tried negotiating with the buyer directly via e-mail or telephone (always the way to start when resolving disputes), and you can't get satisfaction from the online mediation services offered by eBay and PayPal, you have only three options:

1 . Consider bringing a small claims court action against the buyer in the state where the buyer lives. (For advice on how to do this, see Chapter 6 of my book The eBay Seller's Tax and Legal Answer Book.) Showing the buyer you're willing to spend the time and money to pursue him where he lives may just get his attention enough that he'll start working with you in good faith to resolve the dispute.

2. Relist the item on eBay, or offer the underbidders in the original listing a second chance offer, so you can recoup at least some of your losses.

3. Give up and take one for the team. Disputes with buyers take up a lot of time and emotional energy that are better spent putting new items up for sale on eBay. Sometimes it's best to write off a bad deal, chalk it up to experience, and (like Scarlett O'Hara in Gone With the Wind) realize that tomorrow's another day.

 
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