Five tips for safely selling on eBay

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A car is sold every two minutes, a piece of gold equipment every minute and a handbag every thirty seconds.

While most of these transactions go through smoothly, with both the seller and the buyer happy, a small proportion do end in dispute.

Ebay refuses to publish dispute details, but it is believed the most common reasons for a dispute are non-payment for goods, incorrectly described items and items being damaged en route to the buyer.

A dispute can be a frustrating experience for a seller as it usually ends up with them losing their cash and their good, but you can take simple steps to protect yourself. Read our guide for top tips.

1. If you accept card payments through PayPal, then you're a shop

Accepting credit card payments through eBay's payment website PayPal means that you have to essentially abide by the same rules as a normal shop. Under section 75 of the 1974 Consumer Credit Act, the credit card lender is jointly liable with the retailer for faulty purchases.

If a customer complains that a good is damaged or unsatisfactory, they can claim on their credit card and the card company will then go back to the merchant to cover their losses.

This has hit many unwitting eBay sellers that have used PayPal. The company attempts to investigate all chargebacks but admits that its time-scale is short and not all sellers reply to its emails.

If a card company issues a chargeback to a PayPal seller, the company will take it out of the customer's account. If this results in a negative balance, the company may threaten the customer with debt collectors if they don't clear the debt.

Like with any retailer, PayPal advises customers to factor in losses into their overall 'business plan'. Customers with a chargeback problem should call PayPal on 08707 307 191.

2. Watch out for the taxman

If you're just doing the odd trade here or there, you shouldn't have to worry about the taxman. However, those people who are making a serious living out of eBay will have to consider the tax implications. There are two ways that you could face paying tax – income tax if you are regular trader or capital gains tax if you have made a large profit from a one-off sale.

A spokesman for HM Revenue & Customs said: 'If you are internet trading then you should know whether you are a business or not and will have to declare your earnings to us in a self-assessment form. Also, if you make a profit of over £8,800 from a one-off sale, then you will be liable for CGT on the profit over that level.'

HMRC has been clamping down on e-traders by using a 'web robot' that tracks regular eBay traders. The taxman claims that, so far, an extra £1m has been added to its coffers following the introduction of the machine.

3. Be careful about what you sell

Ebay has a list of items that you cannot sell on the site. Most are obvious, such as human parts and credit cards, but others could easily be put up for sale without the seller realising they are breaking the law. For example, it is illegal to sell football or train tickets on the site, and you cannot sell alcohol, so you wouldn't be able to put your valuable wine collection up for auction.

The website could just end the listing early if a seller attempts to flog a prohibited item, but in other cases it could contact the police. This is particularly the case where it is believed that stolen goods are being sold. The site has recently linked up with the police to ban listings of blocked or barred mobile phone handsets. 

4. Be clear and comprehensive in your listing

To avoid buyer disputes, it's important to be honest and open in your listing. For example, if you are selling an item of clothing and it has a defect, make that clear or the buyer could be unhappy with the end product.

If you have withheld an important piece of information about the product, then the buyer is well within their rights to question it. Also, include detailed postage and package information.

To avoid buyers not paying for products, you should make immediate contact once an auction has ended which details when and how they will be expected to pay. You can insist that you will only sell the product to a person that has a buyer history and a PayPal account.

5. Sending out items

Post items through Special Delivery that has a tracking number and its own insurance attached. This can help resolve disputes in case a buyer claims to have never received an item or that it is damaged. Again, keep copies of all correspondence with the seller in case of a dispute.

In addition, verify payment before sending out an item if the buyer paid by cheque and keep an eye out for scams. A common one is for buyers to send a cheque for more than the value of the item and ask the buyer to forward the balance to a Western Union account. However, although it may look like a legitimate cheque, it will ultimately bounce.

 

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